Chinese electric vehicle (EV) firm Enovate Motors is nearing the completion of a new funding round of 750 million yuan ($108.7 million), even as private financing dries up in the country’s highly-competitive EV industry.
Enovate, previously a subsidiary of Chinese video-streaming firm Leshi Internet and Technology, is set to soon close this big-ticket transaction, Auto-Time reported on Thursday, citing multiple people with knowledge of the matter. Auto-Time is an automobile-focused online media platform affiliated with China’s local media outlet 36Kr.
“The transaction will be completed next Friday (March 24) at the latest,” said one of the people.
Enovate did not immediately respond to DealStreetAsia’s request for comments.
The fundraising efforts come as many EV makers in China have switched to survival mode after the past three years of virus-induced global supply chain crunch. Moreover, amid increased costs of automobile chips and raw materials, intense competition, and dwindling government subsidies for EVs, the growth of latecomers like Enovate are clouded.
Established in 2015, Enovate introduced its first mass-produced EV model “ME7” in 2020 when domestic rivals such as BYD, Hozon Auto, Li Auto, and Nio were already supplying their EV cars to consumers for a few years.
It sold 5,321 EVs in 2022, marking a near-two-fold increase from 1,778 EVs in 2021. But its annual sales volume is only a fraction of that of its competitors. BYD, the world’s biggest seller of EVs and plug-in hybrids, sold nearly 1.9 million EV units last year. Even smaller players like Hozon Auto, Li Auto, and Nio sold far more than 100,000 EVs in 2022.
Enovate previously raked in at least 11.5 billion yuan in private financing. In its latest fundraising in October 2020, the firm secured over 5 billion yuan ($724.6 million) led by China’s government-guided industry funds and large state-owned banks, although it did not specify the names of the investors.
In April 2019, it announced the completion of a Series A round at more than 2 billion yuan ($289.9 million), after which its total capital raised crossed 6.5 billion yuan ($942 million).
The firm also had plans to tap the public markets for more capital, although it has yet to make any concrete moves toward an IPO. Enovate had initially revealed its target of a 2021 listing shortly after the completion of the 5-billion-yuan round in late 2020.
Later, its chairman and CEO Zhang Hailiang told a Chinese media outlet that the listing work would start in the third quarter of 2022, with a goal to complete the IPO share sale in Q1 2023. In this interview with 21st Century Business Review last June, Zhang said that Enovate was wrapping up its pre-IPO financing.