Hong Kong dual listing

Shares in Xpeng Motors rose 4 per cent on Wednesday amid reports that the Hong Kong regulator has approved the carmaker's listing on the Hong Kong Stock Exchange. Going public on the Asian exchange will allow Xpeng to attract more investors and about $2bn.

Shares in Xpeng Motors (XPEV) surged 4.05 per cent on Wednesday amid media reports that Chinese rival Tesla (TSLA) has received regulatory approval to list its shares on the Hong Kong Stock Exchange.

CNBC reports that the loss-making automaker plans to raise between $1bn and $2bn in a dual primary listing in Hong Kong. The dual listing means that Xpeng will be subject to US and Hong Kong regulatory rules and oversight, which distinguishes the procedure from a secondary listing.

Xpeng's Hong Kong listing will reportedly be underwritten by major US banks such as JPMorgan Chase (JPM) and BofA (BAC).

Xpeng Motors shares have been traded on the US NYSE since last August, rising 100% from the first day of trading to close on Wednesday 23.06. At the same time, Xpeng's share price is currently down from its highs in 2020 and early 2021.

Xpeng, like other Chinese electric car makers, is seeking a listing in Hong Kong for two reasons, the first of course being to attract as many Asian investors as possible to improve funding and the second to reduce the risks associated with a listing on the US exchange.

Under a bill passed in the US, Chinese public companies could be excluded from US stock exchanges if US regulators are not allowed to review their audits.

Xpeng's listing in Hong Kong is crucial for the company as the electric car market becomes increasingly competitive and to gain more share the carmaker needs investment to ramp up production, expand its car range and invest in new battery technology and autopilot features.

Xpeng's sales in May this year were 5,686 vehicles, up 483% from a year earlier and up from 5,147 units in April.

Last month, XPeng also began generating revenue from sales of its XPILOT 3.0 driver assistance software.

"Monetisation of the XPILOT software will become a regular revenue stream as part of vehicle sales revenues", the company said.