WeRide, a Chinese autonomous vehicle company, is making preparations for its U.S. public debut, signaling a significant shift in China’s stance on foreign IPOs. The company has registered 1 billion American Depository Receipts (ADRs) with the Securities and Exchange Commission, indicating its readiness for a U.S. initial public offering (IPO). This move comes after reports that WeRide is seeking up to $400 million in its IPO and private placement.
If WeRide’s IPO is successful, it will be the largest IPO by a Chinese company on the U.S. stock market since Zeekr, a luxury EV startup owned by Geely, went public in May. However, Zeekr’s stock has fallen by 48% since its debut, highlighting the challenges faced by Chinese companies in the U.S. market.
WeRide initially filed confidentially to go public in the U.S. in March 2023 and has raised a total of $1.39 billion at a $5.11 billion valuation. However, the company has not raised funds through a private round since 2022, as venture capitalists have become more cautious about investing in autonomous vehicle companies with long paths to profitability. Going public will provide WeRide with the necessary capital to scale and compete in the market.
WeRide holds permits to operate autonomously in China, the UAE, and Singapore, and has permits to test its vehicles in California. The company is actively testing its autonomous vehicles in San Jose and is working on various projects, including a driverless robobus, robovan for goods delivery, and robosweeper. Additionally, WeRide offers advanced driver assistance systems that it plans to sell to original equipment manufacturers (OEMs).
However, WeRide’s financials for the first half of 2024 show a decline in revenue compared to the same period in 2023. The company reported revenue of $20.7 million in the first half of 2024, down from about $25.5 million in the first half of 2023. WeRide also incurred losses of $121.3 million in the first half of 2024 and $100.9 million in the first half of 2023. These figures indicate the financial challenges faced by autonomous vehicle companies as they work towards profitability.
WeRide is not the only Chinese autonomous vehicle company looking to enter the U.S. markets. Pony.ai, one of its main competitors, is also reportedly preparing for a U.S. IPO. Pony.ai had previously planned to go public through a SPAC merger at a $12 billion valuation but put it on hold due to uncertainties regarding Chinese firms going public on foreign exchanges.
In conclusion, WeRide’s decision to pursue a U.S. IPO reflects the changing landscape of Chinese companies seeking access to the U.S. stock market. By going public, WeRide aims to secure the necessary funding to scale its operations and stay competitive in the autonomous vehicle industry. However, the company will face challenges as it navigates the U.S. market, as evidenced by the struggles faced by other Chinese companies like Zeekr. Nonetheless, WeRide’s innovative projects and partnerships position it as a key player in the autonomous vehicle sector, with potential for growth and success.