$ 100 billion wave of electric vehicle IPOs to hit market by 2023, bank predicts
Electric vehicle makers have become investor darlings over the past year, and their actions have staged impressive rallies amid bets on the growing demand for cleaner cars.
Industry leader Tesla has nearly doubled in value over the past year and billions have been raised through IPOs and sales of follow-on shares.
Chinese car and battery maker BYD last month raised $ 1.8 billion in a stock offering in Hong Kong, its second such deal this year.
In January, the Warren Buffett-backed company made a further $ 3.9 billion by selling new shares.
The growing demand for electric cars will lead to increased investment by 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 increase in demand, according to BloombergNEF.
“Battery manufacturers will become a world of their own, now entering a phase where massive build-up of capacity requires a lot of capital to keep up with growing demand for electric vehicles,” said Steinemann. “So far, battery companies have been largely debt-financed, but the next stage of their growth will be funded by a wave of IPOs.”
One of the biggest IPOs in Asia next year, and potentially the world, will be the spin-off of LG Chem’s battery unit, LG Energy Solution in South Korea, which could raise around 10 billions of dollars. It is one of the largest battery manufacturers in the world after the Chinese CATL.
LG Energy Solution resumed the IPO process after reaching an agreement to recall Chevrolet Bolt electric vehicles by General Motors in October. It plans to submit the IPO prospectus in early December and take control from investors early next year, the Seoul Economic Daily reported.