BEIJING: An employee of Chinese electric car company Li Auto works at its retail store at a shopping mall in Beijing yesterday. - AFP

HONG KONG: Chinese electric car maker Li Auto began trading in Hong Kong yesterday after a $1.5 billion initial public offering it hopes will help it break out from its mainland market. The listing of the company regarded as a possible rival to Elon Musk's Tesla comes as firms already traded in New York-such as Li-seek exposure in the Asian financial hub as a hedge against China-US tensions that could see them removed from US exchanges.

Shares in Li Auto were trading at HK$116.90 ($15) at 0730 GMT yesterday, against an IPO price of HK$118, having fallen around two percent earlier in the day. "We want to be a winner, not just a mere participant, in the global market," Li Auto co-founder and president Shen Yanan told Hong Kong's South China Morning Post in an interview published yesterday.

"To win market share overseas, a car company has to develop the right product to attract customers with tastes" that are different from those in China. "We have set up a team dedicated to the overseas markets and we are meticulously working on the plans to find a winning formula." The listing-just a month after rival XPeng's Hong Kong IPO-is "an opportunity for Li to cash in while their valuation is higher", Tu Le, founder of consultancy Sino Auto Insights, told AFP.

It will allow the company to add to its $1.1 billion war chest, assembled when it went public in New York in July 2020. Li Auto plans to dedicate almost half of its net proceeds to research and development including in "ultra-fast charging technologies", according to its prospectus. Part of the funds will also go towards developing "intelligent vehicle and autonomous driving technologies". China is the world's largest car market with electric cars accounting for 10 percent of all car sales from January to July, the China Association of Automobile Manufacturers said Wednesday.

The industry group expects new-energy vehicles to make up 25 percent of car sales by 2025. Drivers have been flocking to local auto brands in recent months as Chinese regulators question Tesla over safety concerns. "Many domestic brands are newer, more recognized for their smart capabilities," Tu said.

"They... really target their consumers more precisely through their digital marketing campaigns." However, the listing comes at a turbulent time for stocks in Hong Kong, as investor jitters grow over Beijing's tightening grip there, following the imposition of a sweeping national security law last year. Chinese authorities have also been busy reining in the influence of mainland tech giants, and more recently its lucrative private education sector. And on Wednesday they signalled plans to continue a sweeping regulatory drive across the economy that would last for the next five years.

Hong Kong has seen a bumper crop of Chinese firms choose to list closer to home in the last two years as tensions with the United States have worsened, though China's latest tech clampdown has dulled some of that enthusiasm. Still, a key reason Hong Kong may well remain attractive for Chinese firms are new rules Beijing is planning to implement that will mean local tech firms must obtain cybersecurity clearance if they list overseas. Those listing in Hong Kong will probably be exempt. - AFP