The Chinese electric carmaker Xpeng has completed a share sale that raised $2.16 billion to fund its operations. The company sold 48 million American depositary shares at $45 apiece, raising $2.16 billion in the process. It initially planned to raise $1.8 billion by selling 40 million shares but increased its target amid high investor sentiment.

Xpeng is riding the wave of increasing investor sentiment for electric carmakers, wherein it completed an IPO that raised $1.7 billion this August. Now, the company has raised even more than that ($2.16 billion) in a secondary share sale and could raise as much as $2.48 billion if it exercises an over-allotment option to sell 7.2 million extra shares.

Xpeng held its initial public offering (IPO) this August and debuted on the public markets at a valuation of around $11 billion. Since then, the company’s share price has surged nearly three-fold, giving it a current market value of about $33 billion.

Founded just six years ago, Xpeng has grown to be one of the leading Chinese electric carmakers. The company posted $293 million in sales for the third quarter of 2020, up 343% compared to the previous year. The company ended the quarter with $2.9 billion in cash on its balance sheet and has now boosted that number to over $5 billion with its new share sale.

Xpeng is spending big to grow rapidly and recording big losses as a result. With over $5 billion in cash, the company now likely has enough money to fund its rapid growth while it withstands losses, with hopes of becoming profitable in the long run.

Just like Xpeng, another electric carmaker, Tesla, recently filed to raise up to $5 billion from a secondary share sale, marking the famed electric carmaker’s third such share sale this year. Tesla has notably surged over 600% this year, now with a market value of over $570 billion.

Photo: Xpeng President Brian Hongdi Gu by World Economic Forum is licensed under CC BY-NC-SA 2.0

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