Electric vehicle maker Li Auto raised $1.1 billion in its Nasdaq debut on Thursday after pricing above its expected range, becoming the second Chinese new energy vehicle company to list on an American bourse. The company’s share price closed up more than 40% after its first day of trading.

Why it matters: Winners are beginning to emerge in China’s electric vehicle market after a boom in the industry. Several automakers including rival startup Byton have failed to raise funds to hold them over in the aftermath of the Covid-19 outbreak.

  • Meanwhile, Tesla challenger Nio has seen its share price surge after it secured lines of credit from several Chinese banks amounting to RMB 10.4 billion ($1.48 billion).
  • Li Auto reached 10,000 deliveries faster than any of its more established rivals.
  • The company’s IPO could serve as a litmus test for interest in Chinese companies going public in the US.

Details: Li Auto began trading under the ticker “LI” on Thursday. The company priced 95 million American Depositary Shares at $11.5 per share, higher than the expected range of $8 to $10.

  • Goldman Sachs, Morgan Stanley, UBS, and China International Capital Corporation were underwriters on the listing.
  • The company also raised an additional $380 million through a concurrent private placement to existing investors including affiliates of lifestyle services company Meituan and short video giant Bytedance.
  • Li Auto’s CEO and founder Li Xiang currently holds a 25.1% stake in the company. Meituan CEO Wang Xing follows with a 23.5% stake. Li retains more than 70% of the voting power after the listing, according to the company’s IPO prospectus.

Context: US listings are proving to be popular among Chinese EV makers despite increasing scrutiny of Chinese companies in the US. Nio went public in New York in late 2018 while rival EV maker Xpeng is reportedly also pursuing a US IPO after confidentially filing in June, Chinese media reported.

  • Meanwhile, WM Motors is weighing up a listing on Shanghai’s Nasdaq-like STAR Market, Bloomberg reported.
  • It has been a difficult year for electric vehicle makers, which last year saw a drastic decline in deliveries after the Chinese government reduced purchase subsidies by around 50%.
  • The industry also took a big hit in the first quarter in the aftermath of the Covid-19 outbreak in China, with sales of new energy vehicles dropping to 11,000 in February from 137,000 in December, according to figures from the China Passenger Car Association.
  • Li Auto, formerly known as Lixiang, was founded in by Li Xiang in 2015. The company closed its $550 million Series D this month. The round was led by lifestyle services giant Meituan, the EV company’s largest backer.

Chris Udemans

Christopher Udemans is a Shanghai-based data and graphics reporter. He covers Chinese artificial intelligence, mobility, and cybersecurity. You can contact him at chrisudemans [at] technode [dot] com.