Lixiang, an EV Maker, Reportedly Files for $500 Million IPO in New York
Lixiang's IPO, reportedly secured by Goldman Sachs, could take place in the first half of 2020.
Chinese electric vehicle (EV) maker Lixiang Automotive has reportedly confidentially filed for an initial public offering in New York, seeking to raise up to $500 million.
Based in Beijing, Lixiang has lured Goldman Sachs as its lead underwriter in the IPO planned since the summer of 2019, as Reuters reported today. The flotation may take place in the first half of 2020, according to the report.
In August, Lixiang raised $530 million in Series C funding, which valued the company at $2.9 billion, according to 36Kr, a business news media. That exceeded the market capitalization of its domestic rival, Nio Inc. (NYSE: NIO). Nio raised $1 billion in its offering on Wall Street in September 2018.
Lixiang said it will use the new capital to build its first hybrid SUV and was planning to start production of the vehicle in October 2019, as 36Kr reported at the time.
The year 2019 has been a turbulent one for China's auto market. The world's largest market for cars declined for the 17th consecutive month in November, down 5% from the same period last year. In the second half-year, the EV sector suffered after Beijing scaled back subsidies to the industry. Sales in the electric and gasoline-electric hybrids sector tumbled 44% in November.
Thomas Moga, a senior counsel at Dykema Gossett, told CapitalWatch last month that he expects EV sales to rebound, though Chinese consumers will remain cautious.
By 2025, EV sales are expected to reach 5 million units and account for 20% of China's auto transactions, according to the global market research company ReportsnReport.
By midday on Friday, Nio's stock was trading up 3%, at $3.83 per American depositary share. Another Chinese EV manufacturer, Kandi Technologies Group Inc. (Nasdaq: KNDI) saw its shares trade nearly 2% lower, at $4.75 apiece.