The latest Xpeng Motors electric car is called the P7.
The launch of Chinese electric car Xpeng Motors has submitted an initial public offering (IPO) on the New York Stock Exchange, according to an official presentation.
While the company did not disclose how many Class A common stock shares it will sell, Xpeng Motors said it will sell 429,846,136 Class B common stock, according to the Insurance and Exchanges Commission (SEC) census released Friday. He also said he plans to raise $ 100 million, a figure that is likely to change.
Sharedo Class A ordinary share will be entitled to one vote while each Class B ordinary share will give the holder 10 votes.
The dossier comes after CNBC reported it raised another $ 400 million from Alibaba, one of its largest shareholders, the Qatar Investment Authority (QIA) and the Abu Dhabi Mubadala sovereign wealth fund. QIA and Mubadala both invested $ 100 million each as part of that round.
Xpeng push for a New York IPO comes amid escalating tensions between the U.S. and China that have threatened Chinese firms listed on Wall Street.
The IPO will give Xpeng an injection of cash as it faces stiff competition in China from a number of players including Li Auto, which recently ranked in the US, WM Motor and Nio. But the company also competes with Tesla, which has sought to increase its presence in China with a Shanghai plant.
Earlier this year, Tesla began distributing its Model 3 sedan made at the Shanghai plant to consumers in China.
Xpeng currently has two cars on the market – the G3 SUV and the P7 sedan. The latter competes with Tesla Model 3.
Production of the G3 began in November 2018 and as of July 31, 2020, Xpeng said it had delivered 18,741 units to customers. The P7 started rolling out to customers in May this year and as of July 31, Xpeng had delivered 1,966 units of the vehicle to customers.
The company is planning to launch a third sedan of electric vehicles in 2021, the company said in the SEC dossier.
Xpeng, which was founded in 2015, has tried to differentiate itself from rivals by talking about its software investments. The company has a feature called XPILOT which gives cars some semi-autonomous driving features like automated parking. XPILOT has been developed internally and Xpeng is positioning it as a rival to Tesla Autopilot.
Finances and risks
In the six months ended June 30, Xpeng brought in 1 billion yuan ($ 141.9 million) in revenue, up from 1.23 billion yuan in the same period last year. Some Xpeng stores were forced to close during the height of the coronavirus pandemic in China in February and March.
However, the net loss for the period shrank to 795.8 million yuan from 1.92 billion during the first six months of 2019.
The electric car market in China has been supported by favorable policies in recent years, including subsidies. Some new energy vehicle subsidies and tax break policies that were set to expire this year were extended to 2022.
Xpeng listed any elimination or reduction of these policies as potential to “negatively impact” his business.
The trade war between the US and China and subsequent tariffs could also hit Xpeng, the company warned.
“Although we do not currently export any of our intelligent EVs (electric vehicles) to the United States, it is still unclear what impact these tariff negotiations may have or what further action governments may take, and tariffs may affect potentially in our raw material prices “, it is said in the submission of the SEC.
Xpeng also addressed legislation passed by the U.S. Senate in May that would increase control over Chinese firms listed on U.S. exchanges with the potential to remove lists for some foreign firms.
“If any such discussion were to materialize, the resulting legislation could have a material and negative impact on the performance of the shares of China-based issuers listed in the United States. It is unclear whether this proposed legislation would be passed.” , said the company.
Credit Suisse, JPMorgan and Bank of America are responsible for the IPO.