According to sources, electric carmaker Xpeng Motors has received the go-ahead to carry out an Initial Public Listing (IPO) in Hong Kong. The US-listed company, through this IPO, could raise between $1 billion to $2 billion, according to CNBC’s report. This development comes at a time where the electric vehicle market has become more competitive, with various manufacturers looking to leverage on the increasing demand for electric vehicles.
According to CNBC, a source that didn’t want to be named said that Xpeng Motors received the signal to go ahead with an IPO from the Hong Kong Exchanges and Clearing’s listing committee.
Elon Musk-owned Tesla seems to be at the forefront of the electric vehicle market and is a big competitor for Xpeng Motors. Xpeng Motors is already listed in New York, so its Hong Kong IPO will be an unusual one.
Xpeng Motors, also known as Xiapeng Motors and simply as XMotors, is headquartered in Guangzhou, China. The New York-listed company also has offices in Mountain View, California, and was founded in 2014 by Henry Xia and He Tao. The company produces electric vehicles and self-driving cars.
Unlike other companies already listed in the US that come to Hong Kong for “secondary” listings, Xpeng motors will be having a dual primary listing.
What this automatically translates to is that the IPO will be subject to the oversight and regulations of regulators from both Hong Kong and the U.S.; this is different from how secondary listings are done. It also means that Xpeng will be a part of the “Stock Connect” scheme. Chinese investors will be able to buy the company’s shares through the scheme, and this will in turn increase its investor count.
CNBC also mentioned in their report that the source revealed that JP Morgan and BOFA will the main banks to facilitate the listing. Xpeng Motors have refused to give comments about the development to the media.
Earlier this year, the U.S. Securities and Exchange Commission imposed rigid auditing requirements on foreign firms listed in the U.S – these companies could be delisted if they refuse to comply with these rules. This is one of the hurdles that Xpeng Motors will have to get past apart from the huge competition from local electric car makers like Nio and Li Auto, already listed in the U.S. The company is also coming against huge competition from Tesla, which is currently leading the electric vehicle market.