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A $100B wave of EV IPOs to hit market by 2023, bank predicts

Investor darlings

EV makers became investor darlings last year and their stocks have staged impressive rallies amid bets on growing demand for cleaner cars.

Industry leader Tesla has almost doubled in value over the past year and billions have been raised through both IPOs and follow-on share sales.

Chinese car and battery maker BYD last month raised $1.8 billion in a Hong Kong share placement, its second such deal this year.

In January, the Warren Buffett-backed company fetched another $3.9 billion selling new shares.

Growing demand for electric cars will lead to increasing investments by the companies making batteries for clean vehicles.

The top 10 battery makers are expected to nearly triple their manufacturing capacity by 2022 to meet future supply commitments and position themselves for an upcoming surge in demand, according to BloombergNEF.

“The battery companies will become a universe of their own, they are now entering a stage where massive capacity buildup requires a lot of capital to keep up with the growth of EV demand,” Steinemann said. “So far, battery companies have largely been debt financed but the next stage of their growth will be financed through a wave of IPOs.”

One of the largest IPOs to come out of Asia next year, and potentially globally, will be the spinoff of LG Chem’s battery unit LG Energy Solution in South Korea, which could raise about $10 billion. It’s one of the world’s biggest battery makers after China’s CATL.

LG Energy Solution resumed the IPO process after reaching an agreement over the General Motors recall of Chevrolet Bolt EVs in October. It plans to submit the IPO prospectus in early December and take investor orders early next year, the Seoul Economic Daily reported.

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