Ecarx, a Chinese electric vehicle (EV) maker, has reached an agreement to go public through a deal with Cova Acquisition, a special purpose acquisition company (SPAC) [1]. This move comes as the Chinese government aims to promote the use of EVs in order to reduce air pollution.
Founded in 2015, Ecarx has raised over US$500 million in funding, with investments from Geely, one of China’s largest automakers [2]. The company specializes in manufacturing EVs and EV batteries, while also providing EV charging services. Currently, Ecarx boasts a customer base of over 100,000 and operates in more than 50 cities across China [3].
Under the terms of the agreement, Cova Acquisition will invest US$300 million in Ecarx, acquiring a 49% stake in the company [4]. The deal will complete in the first quarter of 2021.
This move by Ecarx follows the footsteps of Nio Inc., which became the first Chinese EV company to list on the New York Stock Exchange through a SPAC [5]. Ecarx’s decision aligns with the Chinese government’s efforts to boost the adoption of EVs and combat air pollution.
China is recognized as the world’s largest market for EVs. This includes 1.1 million units sold in 2019, representing a 56% share of global EV sales. The government has set a target for EVs to account for 20% of all new vehicle sales by 2025.
With the backing of Geely and its forthcoming listing, Ecarx aims to capitalize on the increasing demand for EVs in China. It is emerging as a prominent player in the market. The company strategically positions itself to leverage government support and fulfill its growth ambitions in the rapidly expanding EV industry.