The end of 2023 and the start of 2024 have seen a number of companies pause planned IPOs within the EV space, as market conditions prove challenging. In January 2024, Renault’s Ampere and Volkswagen’s PowerCo put their IPOs on hold, at the end of 2023 there were rumours that Zeekr had done the same. This was preceded by the turbulent listing of VinFast on the NASDSAQ in August. However, China’s StarCharge has bucked this trend and is rumoured to be eyeing up a listing on the Hong Kong Exchange.
Two IPOs Put on Hold in Two Days
On the 29th of January Renault decided to cancel Ampere’s planned IPO, its pure EV subsidiary. The next day Volkswagen indicated it has put on hold its battery business, PowerCo’s IPO. Originally announced in 2022, Ampere’s IPO was planned for H1 2024, with the funds being used to further develop the company under the Renault Group’s strategic plan, Renaulution. Renault said, “the current equity market conditions are not met to optimally pursue the IPO process.” Additionally, Renault also cited stronger than expected cash generation as another reason not to pursue its listing. Instead, Renault will self-fund its Renaulution.
Volkswagen is reportedly hesitant about scaling up its planned battery production through its subsidiary PowerCo. Subsequently it is delaying opening up PowerCo for external investments and is no longer prioritising an IPO for the next few years. This is as a result of slower than expected adoption of its EVs.
Both these announcements follow rumours of Geely’s Zeekr putting its IPO in the US on hold due to a subdued market sentiment and a lower-than-expected valuation.
Poor Market Appetite
The leitmotif of poor market appetite has been confirmed by VinFast’s listing that it completed in August 2023. Since its peak on the 21st of August, the share price has now tumbled by more than 90% reflecting a cooled market sentiment.
Against the Trend
Conversely, China’s StarCharge is reportedly considering an IPO in Hong Kong to further strengthen its position and expand. StarCharge is China’s second largest charge point operator (CPO) and is seeking to raise a possible USD500 million from the IPO. Its thought that the company is considering the listing due to a strong EV demand, especially in China.
The general IPO market for 2023 was muted as interest rates soared, high inflation prevailed, and geopolitical tensions dominated the news. Looking forward, 2024 will be an election year for many countries across the globe possibly furthering dissuading market appetite. While EV sales growth remained healthy last year, negative sentiment has become more prevalent in the western markets and fears of further economic downturn are returning. Conversely, StarCharge has consistently been profitable year on year, a rarity for CPOs, and can still present an attractive offering in a market further along its electrification journey, with buoyed market sentiment and strong vehicle manufacturer goals in 2024. Establishing new charging points is a CAPEX intensive process, therefore completing an IPO will bring in funds that will prove useful in expansion.
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