Chinese EV and Self-Driving Tech Companies Pursue IPOs Amid Funding Challenges.

Chinese electric vehicle and self-driving technology companies are turning to initial public offerings (IPOs) to raise capital as funding in the sector dries up. Horizon Robotics, a chipmaker for self-driving cars, recently raised $696 million in Hong Kong's largest primary listing this year. However, the company's valuation was 23% lower than its last funding round in December.

The move towards IPOs comes as Chinese auto start-ups face intense competition in the domestic market and funding challenges. Total financing for smart car technology start-ups in China has more than halved from 2021 to 2023, dropping from Rmb100 billion to Rmb45 billion.

Despite the risk of lower valuations, public listings remain crucial for cash-strapped Chinese auto groups to survive in a crowded market. Companies like Zongmu, Minieye, and Hozon have filed for IPOs in Hong Kong, while others such as Momenta, WeRide, and Pony.ai are seeking listings in the United States.

The Chinese government maintains a positive attitude towards the self-driving industry, aiming to achieve large-scale production of Level 3 autonomous vehicles by 2025. However, Chinese carmakers face challenges in international markets, with the US proposing a ban on Chinese software and hardware for internet-connected vehicles and the EU considering tariffs on Chinese EV imports.

Report by Financial Times