First state-owned electric car company goes public in China

China’s ambitious move to electrify its auto market was identified and discussed as one of the most important moments for the country in 2017 in The China Project’s recently-released Red Paper. We will be closely monitoring how the country’s electric vehicle network develops in 2018.

Here’s the latest:

• Beijing Electric Vehicle Co. (BJEV) “will become the first state-owned manufacturer of new-energy vehicles to list on a mainland stock exchange,” Bloomberg reports, as an affiliate of BAIC Group made a $4.5 billion deal to purchase it and trade its stock on the Shanghai exchange.
• BJEV sold 103,199 electric vehicles (EVs) in China last year, nearly double what it sold in 2016. Its market share correspondingly rose from 15 percent to about 23 percent in the same period.
• The company now competes more directly with BYD, the leading domestic carmaker that famously received investment from Warren Buffett and whose stock jumped when Chinese regulators announced last September that they were deprioritizing gas vehicles.
• But a Bloomberg columnist notes that BJEV is “a purer play on EVs than BYD,” because the latter “gets just 55 percent of its revenue from auto sales, and electric vehicles are 20 percent of the total.” Both companies have been received enthusiastically by investors eager to see electric cars succeed — particularly in the mainland markets, where electric car company stocks have risen faster than in Hong Kong.
• A potential damper on investor enthusiasm, Caixin hints, could come in the infrastructure for electric vehicles. China’s 450,000 EV charging points are at just 15 percent utilization countrywide, a top official noted at a recent industry forum. Obstacles to fuller utilization range from low technical standards and lack of coordination between automakers and charging companies — causing mismatch between the technology used by both — to long charging times and parking spaces being taken up by gasoline-fueled cars.

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