May 27, 2024


Unlimited Technology

Chinese EV Startup Iconiq Said to Mull $4 Billion U.S. SPAC Deal

(Bloomberg) — Iconiq Motors, a Chinese electric vehicle firm, is considering going public in the U.S. through a merger with a blank-check company, according to people familiar with the matter.

The startup is working with an adviser on a potential deal that could value the combined company at about $4 billion, according to one of the people.

Iconiq could become publicly traded through the special purpose acquisition company as soon as the end of this year, another person said, asking not to be identified as the details are private.

Discussions are at an early stage and there is no guarantee that a deal with a SPAC will be reached, the people said. A representative for Iconiq declined to comment.

Founded in 2016 by Chinese entrepreneur Alan Wu, Iconiq Motors has offices in Tianjin, Shanghai and Dubai according to its website. Its partners include auto supplier Magna Steyr and Microsoft Corp. The company, which targets the high end of the EV market, aims to launch the Iconiq Seven series multi-purpose vehicle by end of 2023. It counts Amer International Group Co. among its investors, according to a press release in March.

Encouraged by domestic carmakers NIO Inc. and Xpeng Inc.’s successful share sales in the U.S., Chinese EV startups have sought to tap the market there to meet the demands of their capital-intensive manufacturing processes. A crackdown by Chinese authorities on its companies listing overseas has thrown those plans into doubt, particularly those that collate large amounts of user data, which means they could be subject to reviews before being allowed to go public.

Tim Hortons China, one of the first firms based in the country to announce a SPAC merger since the crackdown began, said in August that as part of the deal it would create an independent entity incorporated in China to safeguard customer data, a move viewed as a bid to satisfy Chinese regulators. Tims China will not own any equity in the entity and will provide its services to the parent at cost.

Several EV makers have already gone public through mergers with blank-check firms, including Faraday Future Intelligent Electric Inc., Canoo Inc. and Fisker Inc.

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