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Tesla Rival Li Auto Plans New Share Sale to Bankroll R&D

By Ding Yi / Dec 03, 2020 04:32 PM / Finance

Chinese electric vehicle startup Li Auto has announced plans to issue new shares on the back of its business expansion.

The Nasdaq-listed Tesla challenger intends to offer 47 million American depositary shares (ADSs), each representing two Class A ordinary shares, with an over-allotment option allowing the underwriters to purchase up to 7.05 million additional ADSs within 30 days, the company said in a statement on Wednesday.

Li Auto has yet to decide on an offering price, but if the shares are sold at Wednesday’s closing price of $34.75, the company will raise between $1.6 billion and $1.9 billion.

Proceeds will be used for the research and development of advanced technologies involving battery, charging and autonomous driving as well as new car models, according to the statement.

Goldman Sachs, UBS Securities and China International Capital Corporation Hong Kong Securities will be the joint bookrunners for the planned share sale.

On Wednesday, the Beijing-based company also reported strong November vehicle deliveries with the sale of 4,646 Li ONEs, a monthly sales record since Li Auto’s first model was launched in December last year.

As of November 30, Li Auto had 45 retail outlets in 38 Chinese cities, according to the company, which has yet to turn a profit. Its net loss increased to 106.9 million yuan ($15.7 million) in the third quarter, compared with a 75.2 million yuan loss in the previous quarter, according to the company’s latest earnings report.

Contact reporter Ding Yi (yiding@caixin.com)

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