Xpeng IPO - August 2020

Situation: The China-based, Alibaba-backed electric vehicle company Xiaopeng Motors Technology Co (Xpeng) planned to list on a U.S. exchange to raise capital for an international expansion. Xpeng faced two challenges: By U.S. law, Chinese cars can’t be sold in the U.S., making it impossible for the public to gain a first-hand understanding of the product. Secondly, the listing target date was to take place during the height of U.S.-China relations, leaving the company vulnerable to scrutiny and negative generalizations about Chinese companies.

Challenge: The goal was to maximize capital raise and avoid becoming a casualty in the U.S.-China geopolitical fight.

Advice: The focus of the narrative leading up to the IPO was on the car and its features and quality, not on technology or capital raise. Advisors advocated for bringing the car to the U.S.,  and inviting industry influencers, media and investors to test drive the car and evaluate it for its performance, allowing them to convey to the public their first-hand experience about the car's comfort and its luxury features. Xpeng leadership agreed to the plan, and advisors transformed the Met Life Stadium parking lot, just outside of New York City into a test drive center for the Xpeng car, allowing drivers to accelerate, stop and turn on a pre-determined course. Everyone who drove the car was delighted by its quality and performance.

Result: XPeng’s IPO coverage was dominated by the car’s performance and the capital raised. U.S.-China tensions were rarely mentioned. The performance aspects of the car became the center of the narrative and the resulting media coverage. The Xpeng IPO at the NYSE raised more than USD1.5B for the company.

(Note: Advice was provided by Bob Christie at a previous employer)