Chinese electric car maker Lixiang Motors has applied for an INITIAL public offering in the US, planning to raise at least $500m,media said today, citing two people familiar with the matter. lixiang Car was created by lixiang, the founder of autohome, formerly known as “chehejia”, which was renamed “lixiang Auto” last June. Lixiang Auto secretly submitted an IPO application in December and could go public as early as the first half of this year, according to people familiar with the matter.
Beijing-based lixiang AUTO Has been preparing for an IPO since last summer and has hired Goldman Sachs as the lead bank for the deal, according to people familiar with the matter.
Bankers and industry insiders say the ipo comes at a time when China’s still-lost electric car start-ups are facing increasingly tough financing conditions. These electric car start-ups are now competing for sales and fresh capital in a crowded market. In addition, these companies face cuts in government subsidies for electric vehicles, so they need to make a compelling case for future profitability.
If the IPO goes smoothly, Lixiang Auto Will become the second Chinese electric car start-up to list in New York after NIO’s $1 billion IPO in 2018. NIO’s shares have plunged more than 40 per cent since the listing, despite better-than-expected third-quarter results.
LiXiang Auto and Goldman Sachs declined to comment on the report.
China’s new energy vehicle market, including plug-in hybrids and pure-battery electric vehicles, is the world’s largest. Sales of electric cars in China jumped nearly 62% in 2018, despite a contraction in the overall auto market.
Still, industry insiders say it is unclear whether such sales will be sustainable as subsidy cuts dampen consumer demand. Sales of electric cars fell for the fifth month in a row in November.
Under Goldman’s arrangement, Lixiang Motor made a $530m investment in C-round financing last August, with major investors including Wang Xing, the founder of Meituan, valued at about $2.93bn.