China’s large and competitive electric car market has a new billionaire, who is aiming to win over the country’s consumers with vehicles designed to be innovative and yet affordable.
Li Xiang, the founder of Beijing-based EV startup Li Auto, saw shares of his company surge almost 50% following its Thursday debut on the Nasdaq. Li Auto raised USD1.1 billion by selling 95 million American Depositary Shares at $11.5 apiece, giving the company a market value of USD11 billion. Li has a 21.3% stake that gives him a net worth of USD2.9 billion.
Li Auto managed to stand out in China’s competitive Electric Vehicle (EV) market. The company is best known for Li ONE, a six-seat electric SUV that sells for 328,000 yuan (RM198,000). Li has developed a system called Extended-Range Electric Vehicles (EREV). This system is the main differentiation to the established brand like Tesla. EREV is powered by electricity from both battery packs and also an internal combustion engine.
Li Auto sold 10,400 cars as of June 30 this year after starting mass production of Li ONE in November 2019, according to its prospectus. The startup is still deep in the red, losing 2.44 billion yuan (RM1.5 billion) in 2019, up from a net loss of 1.53 billion yuan in 2018. It did finish the first quarter of 2020 with a gross profit of RM40 million after it began monetization.
Li Auto has managed to attract several big-name investors, such as Hong Kong-listed food delivery giant Meituan Dianping and short video platform Tik Tok parent ByteDance. Meituan’s billionaire founder Wang Xing has been serving as a company director since July 2019.