Chinese Nio, Tesla Electric Vehicle Competitor Li Auto Raises $1.1B In US IPO

Li Auto Inc. has raised $1.1 billion in its initial public offering in the United States, Bloomberg reported. 

What Happened

The Chinese electric vehicles maker sold 95 million American depositary shares priced at $11.50 each on Wednesday — above its previously indicated range of $8 to $10. The IPO values Li Auto at about $10 billion on these terms. 

The shares will begin trading Thursday under the symbol "LI" at the Nasdaq Stock Market.

Goldman Sachs Group Inc GS, Morgan Stanley MS, UBS Group AG UBS, and China International Capital Corporation Limited CNICF are serving as the underwriters for the offering.

Xiang Li, the CEO of the automaker will reportedly have 21% stake in the company at the conclusion of the IPO, with 72.7% of the total voting power.

The listing is occurring simultaneously with a $380 million sale of shares to investors, including an affliate of the web-based shopping platform Meituan Dianping MPNGY and TikTok parent company ByteDance Ltd. Hillhouse Capital has also reportedly expressed interest in purchasing shares to the tune of $300 million at the IPO price.

Why It Matters

Li Auto sells SUVs priced between $21,000 and $70,000. It last reported a net loss of $10.89 million for the first quarter, with total revenue of $120.28 million. In the similar quarter last year, the company had posted a net loss of $344 million, an indication that its nearing profitability, Bloomberg noted.

This month, another Chinese EV maker Nio Inc NIO, which held its IPO in September 2018, rallied to a record high and has run up nearly 216% year-till-date.

A recent debutant on the markets, Nikola Corp NKLA skyrocketed after its listing last month, and has clocked gains of 202% YTD. Elon Musk-led Tesla Inc TSLA has surged 258% YTD.

Photo by Jengtingchen via Wikimedia.