Companies In The Super-Saturated Chinese EV Market Are Going Public To Avoid Going Bankrupt
Mon, 07/27/2020 – 20:05
The competition in the EV market – especially in China – is starting to become super-saturated. But rather than actually allow the market to consolidate and eliminate some of the smaller players, Chinese EV companies are taking another route to stave off going under: going public.
After all, what better way to put a company that’s not meant to survive on life support than to sell shares of it to a public that doesn’t know how to read financial statements?
Hozon New Energy Automobile is the latest name to launch an IPO, Bloomberg points out in a recent article, saying it wants to list in Shanghai next year. WM Motor Technology Co. is also considering a listing, potentially this year. They will join names like Nio, Tesla and Li Auto in competing in the world’s largest auto market.
Hozon is trying to capitalize on lower priced vehicles, offering an electric SUV for less than $10,000. The company has already shipped more than 16,000 vehicles. WM Motor is seeking a valuation of about $4.3 billion and is backed by names like Baidu and Tencent. Li Auto is seeking an IPO in the U.S. that could raise up to $1 billion.