Thursday, August 13, 2020

Rival Tesla, Xpeng Motors Collects Rp 4.4 Trillion Ahead of IPO

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Jakarta, CNBC Indonesia – Electric vehicle manufacturers from China, Xpeng or Xiaopeng Motors are in talks to raise funds of around US $ 300 million or equivalent to Rp 4.4 trillion (assuming Rp 14,693 / US $) before the initial public offering (IPO) in the United States.

Two anonymous sources familiar with this issue said the Qatar state wealth fund, the Qatar Investment Authority, was one of the investors in the producer funding round of one of Tesla’s rivals in China.

To CNBC International, the source added that the final amount collected might be higher than US $ 300 million, because a number of investors were still in discussions to disburse money to Xpeng.

Xpeng’s cash injection is part of the same funding round of US $ 500 million that he obtained in early July from several investors, including Aspex, Coatue, Hillhouse Capital, and Sequoia Capital China.

This follows an investment of US $ 400 million in November 2019 from investors who included Xiaomi smart phone makers in China.

Further, the source said that if Xpeng Motors conducts an IPO in the US in secret, but has not decided which exchange will be registered.

If Xpeng goes public in the US, they will join with fellow Chinese electric car makers, the NIO that was registered in September 2018. On Thursday (7/30/2020), Li Auto, another Chinese electric car maker, began trading on the Nasdaq and succeeded in gathering US $ 1.1 billion

But amid rising tensions between the US and China could affect potential foreign companies listed on Wall Street.

In May, the US Senate passed a law that would increase surveillance of Chinese companies that trade on US exchanges, bringing the threat of delisting for some foreign companies.

On the other hand, China has given birth to a number of electric car companies thanks to favorable policies for this sector, including subsidies. While some manufacturers have collapsed, others like Xpeng are still advancing and growing.

But due to the corona virus pandemic (Covid-19), China’s electric vehicle sector is losing money. Sales of new energy vehicles fell 33.1% YoY in June, according to data from the China Association of Automotive Manufacturers. However, sales have increased month-on-month as the Chinese economy shows signs of rebounding.

Beginning in 2020, the Chinese government launched a policy that will increase the demand for electric cars. Some new energy vehicle subsidies and tax relief policies that will expire this year will be extended to 2022. The national charging infrastructure has also been invested 2.7 billion yuan.

[Gambas:Video CNBC]

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