Prepare Yourself for Another Huge Electric Vehicle IPO

Matt Posky
by Matt Posky
prepare yourself for another huge electric vehicle ipo

Chinese electric vehicle manufacturer Xpeng announced Thursday a decision to increase the size of its U.S initial public offering (IPO) by more than a third after realizing Wall Street can swallow anything so long as it promises a greener tomorrow.

Co-founded in 2014 by two former executives from China’s GAC Group, the EV startup has already managed to produce around 20,000 vehicles for the Asian market. It also became engaged in an intellectual property dispute with Tesla (which claimed Xpeng stole its Autopilot source code) in 2019 and ran afoul with California’s Department of Motor Vehicles after failing to submit disengagement reports on its self-driving test vehicles in 2018.

Such hurdles don’t seem to have slowed the company’s rise to prominence, however. Xpeng is adept at fundraising, amassing well over a billion dollars through strategic partnerships in just the last two years. Meanwhile, the adjusted IPO filed on the New York Stock Exchange this August now targets a cool $1.5 billion USD.

It makes sense in the broader context. EV manufacturers frequently garner valuations that overshadow established automakers that are many times larger — and substantially more profitable. Xpeng itself only has two facilities located in China that produce its G3 sport-utility vehicle and brand-new P7 sedan. While we’ve never driven one (as it’s not sold in North America), the G3 has been praised for its build quality and impressive tech inclusions. Autocar even said it offered “near-Tesla levels of autonomous driving capability” in 2019.

There’s substantially less information floating around about the P7, but it’s clearly targeting the Tesla Model 3 and looks a lot like many other electric sedans we’ve seen debut in the last year or two. Porsche also helped develop the chassis, giving it some extra credibility as a performance model.

According to Reuters, Xpeng’s filing states that it will price its shares at $15 each. It originally suggested they’d go for between $11 to $13 when the deal was launched, however.

From Reuters:

The Guangzhou-based automaker had planned to sell 85 million American Depository Shares (ADS) but increased that to about 99.7 million shares following higher-than-expected demand from investors, according to the filing. Investors now value Xpeng at over $11 billion and its shares will start trading in New York on Thursday.

There is also a so-called greenshoe option in which another 14.96 million shares can be issued within the next 30 days that would allow Xpeng to raise a further $224.4 million.

BofA Securities, Credit Suisse, and J.P. Morgan. are joint bookrunners for the offering.

Xpeng CEO He Xiaopeng said the additional funding will be funneled into research and development and expanding sales. Vehicles (both future and present-day) are targeted between 150,000 yuan ($21,804) to 300,000 yuan to appeal to the market. Currently, that only includes China, though the business aspires to tackle both Europe and the United States.

[Image: helloabc/Shutterstock]

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9 of 10 comments
  • SCE to AUX SCE to AUX on Aug 27, 2020

    Not sure why anyone would *want* Tesla's Autopilot code.

    • See 5 previous
    • SCE to AUX SCE to AUX on Aug 28, 2020

      @Inside: Chill; it's a half-joke. We all know the outcomes of people who mistake AP's Level 2 capabilities for FSD, which it is not. As much as I support Tesla, I have no interest in AutoPilot or vehicle autonomy in general.

  • PandaBear PandaBear on Aug 27, 2020

    In the age of hyper inflation, anything is worth that much money.

    • Luke42 Luke42 on Aug 28, 2020

      The only thing that is inflated at the moment are stock prices.

  • TheEndlessEnigma I just had one of these earlier this week as a rental while on a business trip. What a completely uninteresting and forgettable appliance the "Corolla Cross" is. Rock hard seating, gutless engine, slushy transmission that pauses to allow you to reconsider your throttle inputs before grudgingly acceding to your suggestions, uninspired handling, poor visibility and "look at me I'm the same as everyone else" styling. Pretty poor effort from Toyota be will be spoken of positively because it is a Toyota, regardless of the vehicle's actual merits....or lack thereof.
  • Da Coyote It's attractive, but having owned an Alfa in college (yes, I was stupid enough to have one), and even having loved driving it during the few days it was drivable, I'll give it a pass. However, I'd love Italian styling coupled with Toyota engineering. A painful thought would be Toyota styling coupled to Alfa engineering.
  • EBFlex Only 33 miles is disappointing. 50 miles should be the absolute minimum when it comes to PHEVs, especially for the cost of this Toenail
  • Theflyersfan I pass by the "old money" neighborhoods next to the golf course community where many of the doctors and non-ambulance chaser lawyers live in town and these new Range Rovers are popping up everywhere. It used to the Q8 and SQ8, but I'm thinking those leases expired, traded in, or given to their never leaving home son or daughter so they can smash it at a DUI stop, get on the news, and get out of jail free. I'm not getting into their new design language, and I like Land Rovers. They aren't supposed to look like smooth bars of soap - they need a few character lines or hints of offroad ability, even though the odds of this getting on anything other than a gravel parking lot are less than nil. And with the new Range Rover's rear and the taillights, if I wanted a small solid red bar for a lamp that did everything and then dies and then I can't tell what the car wants to do, I'd follow a late 80's, early 90's Oldsmobile 98.
  • Lou_BC Legalize cannabis for racing