Xpeng P7

Electric Vehicle Maker Xpeng Motors Files for IPO on the New York Stock Exchange

XPeng Motors, one of Tesla’s most significant competitors worldwide, finally goes public.

Xpeng Motors is an electric car startup headquartered in Guangzhou, China, and located in Mountain View, California. The company is now joining the public market and has just filed for an IPO on the New York Stock Exchange. Moreover, it had raised $400 million from Alibaba, the Qatar Investment Authority, and Abu Dhabi sovereign wealth fund Mubadala, before filing for the IPO.

Xpeng Motors chose to jump on the bandwagon and go public amidst the global pandemic, considering the market stands good for EV automakers. Tesla shares are also taking off, and Chinese competitors Li Auto, WM Motor, and NIO are also peaking.

Xpeng G3 SUV
Xpeng G3 SUV

The company will issue 429,846,136 Class B ordinary shares, as announced on the Securities and Exchange Commission (SEC) filing. The automaker expects to raise $100 million from going public, and, if it has a successful IPO, the amount could go much higher.

Xpeng is now the third Chinese electric vehicle maker who is going public in the US market. Li Auto filed for its IPO on NASDAQ by the end of July. Meanwhile, NIO went public through the New York Stock Exchange in September 2018 and raised about $1.3 billion.

In numbers, Xpeng is the most significant global competitor of Tesla. The American manufacturer sold 50,313 electric vehicles in China in the first two quarters of 2020. That’s a 130 percent rise from the previous year. However, Tesla is right behind, and gaining popularity in the Chinese market as its Model 3 quickly becomes the center of attraction.

Presently, the Chinese automaker has two EVs on the market, the G3 SUV, and the P7 Sedan. The latter gives a fair competition to the Tesla Model 3.

Xpeng started selling the G3 in November of 2018, and as of July 2020, delivered 18,741 G3 models to customers. Meanwhile, the P7 Sedan delivery began in May 2020, and already 1,966 P7 Sedans were delivered.

According to a recent press release, Xpeng’s third model should arrive on the market sometime in 2021.

Xpeng P7
Xpeng P7

As far as the finances of the automaker go, it had 1 billion yuan ($141. 9 million) in revenue on June 30, 2020, which was a slight decrease from 1.23 billion yuan in the previous year at the same time. The automaker had to shut down some stores in China amidst the coronavirus this year, in February and March. Xpeng also saw a drop in its net loss, which is 795.8 million yuan during this period. The previous year, the net loss was $1.92 billion.

To support its own EV market, especially during such hard times, the Chinese government has recently been introducing policies and subsidies to favor Chinese electric vehicle makers. Moreover, some subsidies and tax break policies that should’ve expired this year were extended until 2022. Such policies will obviously give a little push to the growing Chinese EV industry, which may explain why many EV manufacturers originating from China seems to be even more present on the international scene lately.

However, Xpeng has shown concerns that elimination or reduction could severely impact their business. Furthermore, the US and China trade war and related tariffs may also affect its business adversely.

“Although we do not currently export any of our Smart EVs to the United States, it is not yet clear what impact these tariff negotiations may have or what further actions the governments may take, and tariffs could potentially impact our raw material prices,” the SEC filing said.

Source

About Mayank Goel

Mayank Goel
Mayank Goel is a CA aspirant who loves to research and analyze stock markets, finance, and cars. He started working as a content writer to keep learning and spread the knowledge with others. He also loves dogs and travel.

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