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Hybrid EV startup Li Auto raises $1.1b in Nasdaq IPO

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Li Auto, a Chinese hybrid Electric Vehicle(EV) maker raised US$1.1 billion through its IPO on the Nasdaq under the ticker ‘LI’. 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.

The Beijing-based company is betting on the growing middle class who love the idea to drive clean, smart and bigger vehicles. The company issued its first model which was an SUV around the end of last year. The electric car was the price at 328,000 Chinese yuan, or US$46,800.

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

There is a meteoric rise of investor confidence in EV startups with Tesla becoming the most valuable automaker in the world with a valuation of US208 billion.

Li Auto seems to be a good investment since its prospectus claims 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.

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