The Chinese government, which has taken aggressive steps to reduce the dominance of the big national names in technology and the internet, has not shied away from showing its unwavering support for local electric vehicle manufacturers.
What happened: A recent announcement from the China Securities Regulatory Commission showed that the regulator has expanded the pilot scope of ref chip companies to allow them to register in China.
The expanded scope entered into force on Friday with the blessing of the State Council, according to a statement from the CSRC.
Red Chip shares are the shares of mainland Chinese companies listed on the Hong Kong Stock Exchange. These companies are incorporated outside of mainland China but operate primarily in China.
The initial pilot program introduced in 2018 enabled the internet, big data, cloud computing, artificial intelligence, software and integrated circuits, high-end equipment manufacturing and biomedical companies to issue shares or deposit receipts in China.
With the updated program, high-quality, blue-chip companies will now include high-tech industries and strategic emerging industries such as next-generation computing, new energies, new materials, new energy vehicles , protection of the green environment, aerospace and marine equipment. companies.
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Why this is important: The new regulation leaves room for maneuver for Chinese electric vehicle startups listed in the United States such as Nio, Inc. (NYSE: NIO), XPeng, Inc. (NYSE: XPEV) and Li Auto, Inc. (NASDAQ: LI) to register on the Chinese A-share market.
Among the trio, XPeng and Li Auto both pursued secondary registrations in Hong Kong this year. Nio was also rumored to be considering listing in Hong Kong, but his plans were scuttled due to issues with user trust. Nio’s Hong Kong listing will now be delayed until next year, according to reports.
In addition, all of these electric vehicle manufacturers are pursuing ambitious expansion plans. Nio officially entered Norway earlier this year and is on track to launch its ES8 model in the country on September 30. The company is expanding its product line by adding a new sedan named the ET7 early next year. The company also reportedly intends to launch an economy vehicle model under a different brand name.
XPeng recently launched its third model – a family sedan named P5. The company also exports vehicles to Norway.
An additional listing will give these companies the means to expand market opportunities and deploy new models, a definite asset in the short and medium term.
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