Chinese Electric Vehicle Companies Eye Listing Closer to Home

Li Auto, Nio, and Xpeng Plan Second Listings

Three Chinese electric vehicle makers which are listed in the US are making plans to pursue second listings in Hong Kong. Li Auto Inc (LI), Nio Inc (NIO), and Xpeng Inc (XPEV) hope to draw on an expanding Chinese investor base.

The three automakers will sell at least 5% of enlarged share capital in Hong Kong. Based on their market capitalization, this could raise as much as $5 billion. The three companies combined have raised $14.7 billion on US markets over the past two years.

China’s Growing EV Market

Analysts expect that sales of new-energy vehicles in China will climb nearly 40% this year compared to last year, which is equivalent to 1.8 million units. Because of this expected growth, it is a crucial time for EV makers to solidify market share.

Tesla (TSLA) and other international EV makers are ramping up their presence in China. The three Chinese companies hope that the capital they raise in Hong Kong will help them expand sales networks and fund technology development in order to keep up with other EV makers vying for attention from Chinese consumers.

Chinese Companies Pursue Listings Close to Home

The trio of carmakers will join a growing number of New York-listed Chinese companies pursuing dual listings closer to home. Ecommerce powerhouse Alibaba (BABA), fast food restaurant operator Yum China (YUMC), and a number of other large Chinese companies have used this strategy over the past year.

This trend is partially because Chinese companies are wary of more stringent regulations in the US and partly because Chinese companies want to take advantage of a growing base of domestic investors. The three carmakers are still in the early stages of pursuing dual listings, but analysts expect they could begin trading in Hong Kong at some point this year.

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