Chinese Hybrid EV Startup Li Auto Raises US$1.1B In Nasdaq IPO

Li Auto is the second Chinese EV startup to list in the U.S. after Nio’s 2018 IPO

While trade tensions between the U.S. and China have been intensifying, and various instances of fraud by Chinese companies listed in the U.S. have come to light, Chinese startups have not been deterred in their ambitions to list publicly on U.S. exchanges.

On Thursday, Chinese hybrid Electric Vehicle (EV) maker Li Auto debuted on Nasdaq under the ticker ‘LI’, and raised US$1.1 billion through its IPO. Goldman Sachs, Morgan Stanley and UBS were among the underwriters for the IPO.

While Li Auto applied for an IPO early this year, the company received approval from regulators recently and priced its IPO at $11.5 per share, a little over their targeted range of $8 to $10. This indicates that Li Auto’s market value when fully diluted would stand at $10 billion.

Li’s listing was greeted with considerable enthusiasm, as shares quickly soared to $17.50, and is trading north of $16 at the time of writing.

The startup also raised an additional $380 million through a concurrent private placement of shares to existing investors, according to TechCrunch.

This is the second Chinese EV startup to list on Nasdaq after Nio’s 2018 IPO, and Xpeng, which recently raised $500 million, will be next, according to reports by TechCrunch and The Verge.

Electric vehicles have been gaining traction over the last few years as awareness of sustainable and eco-friendly options grows. With Tesla becoming the most valuable automaker in the world, with a valuation of $208 billion, investors are newly interested in funding EV startups.

Li Auto’s first angel investor Mingmin Huang, Founding Partner at Future Capital Discovery Fund, said that Li Auto differentiates itself from other EV makers by focusing on developing extended-range electric vehicles (EREVs) rather than pure electric models, and manufacturing its own cars, unlike its rival Nio.

Li Auto One
The Li ONE.

Li Auto’s models are equipped with two electric motors, one of the front axle and another on the rear, which are in turn powered by a 40.5kWh battery pack, a 1.2 litre turbocharged engine paired to a 45-litre fuel tank (about 12 gallons) and a 100kW electric generator, which can provide power to the battery pack in real time.

This allows the vehicles to be driven for about 180 km on battery power, but offers a total range of 800 km using the combustion engine.

Li Auto’s first model, called Li One, a six-seat hybrid EV SUV, which began shipping last year, was sold for approximately $46,800. The 5-year old Beijing-based startup is targeting the growing environmentally-conscious and tech-savvy Chinese middle class.

According to Li Auto’s prospectus, the startup has delivered over 10,000 of its first model as of June 30, 2020. Li Auto is looking to sell hybrid SUVs ranging between $21,000 and $70,000 in the future.

“Pure battery electric vehicles face structural challenges currently with limited battery capacity such as charging infrastructure, consumer habits etc. Li Auto dared to blaze a different trail and became the first in China to successfully commercialize EREVs, solving for these challenges,” Huang wrote in a press release celebrating Li Auto’s IPO.

“I would like to thank product managers who, like Li Auto’s team, are bold enough to be different. It is through their unwavering dedication to their products that our lives are made better,” he added.

Huang believes that Li Auto’s range extension solution will accelerate the adoption of electric vehicles in the world’s most populous country, paving the way for a greener world, a reinvention of how we think about mobility, and an altogether different future cityscape.

Li Auto’s top priority is to lead in autonomous driving technologies and to contribute to building an ecosystem for EVs that would propel the future of e-mobility, said Huang.

“Advancements in smart EV will alter the course of human mobility. Some of the most innovative, trillion-dollar-companies of the future will be technology companies in this field – which is why I made my bet early with Li Auto,” he added.

Header image courtesy of First Capital

SHARE THIS STORY

Share on facebook
Share on twitter
Share on linkedin
Share on email

RELATED POSTS

5 Companies That Have Already Announced Job Cuts This Year

Layoffs in 2023: 5 Companies That Have Already Announced Job Cuts This Year

The layoff spree at tech giants is bleeding into a new year. It has been just three weeks since we entered 2023, yet the media is buzzing with disturbing numbers about people being laid off by tech companies: At least 104 tech companies let go more than 26,000 employees. This means, more than 1,600 tech employees were dismissed per day in the past couple of weeks. Let’s take a look at the top tech companies that are laying off aggressively.

Goblin Mode

Decoding the World’s Obsession with “Goblin Mode”

Do you find yourself struggling to maintain a positive and productive attitude at work? Are you becoming increasingly irritable or disengaged from constantly feeling overwhelmed and stressed? If so, you’re not alone. Many people experience this state of mind, and some turn on their ‌ “goblin mode” to cope with it. The term “goblin mode” gained popularity in February 2022

Instagram vs YouTube—Which Is Better for Your Business?

Instagram vs YouTubeWhich Is Better for Your Business?

With the rise of social media platforms, like Instagram, TikTok and YouTube, businesses have gained new opportunities to reach their potential customers. It’s important to note that Instagram and YouTube are not just for entertainment; they can be used as powerful tools for marketing and creating brand awareness. Many individuals already use YouTube, TikTok and more to earn money.

What Is Ambient Computing? How Does It Affect Our Lives?

What Is Ambient Computing? How Does It Affect Our Lives?

Picture this: it’s five degrees Celsius outside, and you are freezing, but instead of you adjusting your thermostat, your house automatically realizes that it needs to be warmed up and changes the temperature accordingly. That is what ambient computing is all about. Ambient computing (also called ambient intelligence) refers to technology immersed into your environment. You don’t have to consciously interact with it using screens or keyboards.

How Can AI Be Used in Governance?

How Can AI Be Used in Governance?

One of the many things that artificial intelligence (AI) is capable of doing is helping governments function smoothly. In a previous article, we discussed that, over time, AI would be responsible for more decision-making. As such, it can help governments worldwide make tough decisions by ridding the decision-making process of human biases.

Top 3 Cheapest Tesla Alternatives to Consider Buying

Top 3 Cheapest Tesla Alternatives to Consider Buying

Those who care about the environment have progressively shifted to electric cars. In December 2022, electric car sales reached 11% of the car market worldwide. These cars not only have significantly fewer carbon emissions but are also cheaper to maintain. Some countries, such as New Zealand, the U.K.