Shares of Chinese electric vehicle companies have fallen sharply because of investor concerns about the risk of delisting the ADRs of US-listed Chinese companies. But according to XPeng Motors’ CEO, this is not an imminent threat.
XPeng is “following closely” the furor surrounding US-traded Chinese technology companies, although the threat of forced delisting from US exchanges is still “several years away,” the company’s president, Brian Gu, said in an interview with Bloomberg on Tuesday.
With the US Securities and Exchange Commission passing amendments to finalize rules implementing the Holding Foreign Company Accountability Act (HFCAA), stocks of Chinese electric vehicle companies listed there suffered sharp declines last week. Xpeng Stock is up 8% YTD.
In a research note sent to investors Monday, Deutsche Bank’s Edison Yu’s team said the market is clearly signaling that the opportunity is much greater now than it was a week ago, but that the law is not a new development and that stocks generally shrug off the news after each “new cycle”.
NIO is currently in a less favorable position because it doesn’t have a dual primary listing in Hong Kong, which is probably why it sold the most of the three last week, the team said.
In the interview with Bloomberg, Gu also addressed the issue of access to the US market, saying that the Chinese government will be supportive of XPeng’s efforts to expand globally, however, the US market may be “difficult to tackle” in the short term.