Chinese automaker Li Auto raises a staggering USD 1.1 billion in US IPO

Chinese automaker Li Auto raises a staggering USD 1.1 billion in US IPO

Even though the tension between the United States and China is escalating every day, it has not affected the attractiveness of the American Stock Exchange for Chinese companies. Chinese companies are still vying to be listed on the American Stock Exchange. In a stock market update, Chinese electric vehicle startup, Li Auto announced it raised a staggering USD 1.1 billion while it debuted on Nasdaq on Thursday.

Li Auto, based in Beijing, China, has the growing middle class of China as its target as they strive to drive cars that are cleaner, smarter, and larger. Li Auto priced its IPO ahead of its target at USD 11.5 per share and gave it a diluted market value of USD 10 billion. It also raised an additional USD 38 million in private shares to the already associated investors. The IPO came at a time when the EV market saw a soaring interest from the investors. Li Auto’s move of US IPO is a step forward against its Chinese competitor Xpeng who has hinted at an IPO last year. Wallace Guo, who is a managing partner at Li Auto’s Series B investor Taihecap, said the investment in the auto industry is a very strategic move, and considering it requires a huge investment and resources, any bad move could prove to be fatal. Its annual revenue in 2019 was USD 40.4 million, and Li Auto’s investors believe the Chinese startup could step up to Tesla in terms of commercial success. However, it recorded a loss of USD 350 million in 2019 but finished the first quarter of 2020 with a staggering profit of USD 9.6 million.

Li Auto sold its first model at USD 46,800 and is a six-seater electric SUV. The startup only started shipping its models in December 2019 and has delivered 10,000 units as of June 2020.


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