Chery could be the latest Chinese automaker to go public

Chery Holdings Co. is reportedly once again considering a Hong Kong initial public offering for its automotive unit. The IPO could value the business at about 50 billion yuan ($7.1 billion). Sources told Bloomberg that the Wuhu-based based company is talking to potential bankers about the potential IPO of Chery Automobile Co.

The expected valuation for Chery would rank the company behind BYD Company (OTCPK:BYDDF), Li Auto (NASDAQ:LI), NIO (NYSE:NIO), and XPeng (NYSE:XPEV) in terms of market cap, but ahead of ZEEKR Intelligent Technology (NYSE:ZK) and Lotus Technology (LOT).

Chery Automobile Co. was founded in 1997 as a state-owned enterprise by officials from Wuhu in China’s Anhui province. The company began automobile production in 1999 with its first model, the Fengyun, which used a licensed SEAT Toledo chassis. Initially, Chery could only sell cars within Anhui province due to licensing restrictions, but it overcame this restriction by partnering with SAIC Motor until obtaining a national license in 2003.

Chery grew rapidly, producing over 50,000 vehicles by 2002. The company focused on developing its own technologies, launching its ACTECO engine brand in 2006. Chery was an early adopter of electric vehicles, introducing its first EV in 2009. Currently, Chery sells cars under the Chery, Tiggo and Arrizo brands in China and abroad. Chery said last year that it planned to set up subsidiaries in Europe to sell directly to customers in the UK, Germany and France. However, that goal was pushed back after the European Union’s imposition of tariffs on EV imports from China.