Xpeng Motors’ newest electric vehicle is called the P7.
Chinese electric car startup Xpeng Motors has applied for an initial public offering (IPO) on the New York Stock Exchange, according to an official filing.
Although the company did not disclose how many Class A common shares it would sell, Xpeng Motors said it would sell 429,846,136 Class B ordinary shares, according to a Securities and Exchange Commission (SEC) filing. announced on Friday. It also said it plans to increase the amount of the placeholder to $ 100 million, a figure that is likely to change.
Each Class A ordinary share will receive one vote while each Class B ordinary share will have 10 votes.
The filing comes after CNBC reported that it raised an additional $ 400 million from Alibaba, one of its largest shareholders, Qatar Investment Authority (QIA) and Mubadala’s sovereign wealth fund. Abu Dhabi. QIA and Mubadala both invested 100 million dollars each as part of that round.
Xpeng’s promotion of IPO in New York comes amid mounting tensions between the US and China that have threatened Chinese companies to list on Wall Street.
The IPO will give Xpeng another cash as it faces stiff competition in China from a number of companies including Li Auto, which recently listed in the US, WM Motor and Nio. But the company also competes with Tesla, which is looking to strengthen its presence in China with a factory in Shanghai.
Earlier this year, Tesla began rolling out Model 3 sedans produced at the factory in Shanghai to consumers in China.
Xpeng currently has two models on the market – G3 SUV and P7 sedan. The second one competes with Tesla’s Model 3.
G3 production began in November 2018 and as of July 31, 2020, Xpeng said it had delivered 18,741 units to customers. The P7 started to be released to customers in May this year, and as of July 31, Xpeng has delivered 1,966 units to customers.
The company is planning to launch a third electric sedan sedan by 2021, the company said in its SEC filing.
Xpeng, founded in 2015, has tried to differentiate itself from competitors by increasing investment in software. The company has a feature called XPILOT that gives cars a number of semi-autonomous driving features such as automatic parking. XPILOT was developed in-house and Xpeng is positioning it as a rival to Tesla’s Autopilot.
Finance and risk
In the six months ending June 30, Xpeng brought in 1 billion yuan ($ 141.9 million) in revenue, down from 1.23 billion yuan in the same period last year. Several Xpeng stores were forced to close during the height of the coronavirus epidemic in China in February and March.
However, the net loss during this period fell to 795.8 million yuan from 1.92 billion in the first six months of 2019.
China’s electric car market has been supported by favorable policies over the past few years, including subsidies. Some of the new energy vehicle subsidies and tax breaks set to expire this year have been renewed until 2022.
Xpeng flags any removal or reduction of these policies as likely to “adversely affect” its business.
The company warns the trade war between the US and China and subsequent imposition of tariffs could also affect Xpeng.
“While we are not currently exporting any of our Smart EV (electric vehicles) to the United States, it is unclear what impact these tariff negotiations will have or what further action the government can take. Existing and tariff rates may affect our raw material prices, “said the SEC filing.
Xpeng also resolved a law passed by the US Senate in May that would increase scrutiny of Chinese companies listed on US exchanges with the potential to trigger deals for some country firms. out.
“If any such considerations come to fruition, the resulting act could have a serious and adverse impact on the securities operations of China-based issuers listed in China. US It is not clear whether this proposed law will be enacted or not, “the company said.
Credit Suisse, JPMorgan and Bank of America, are underwriters for the IPO.