Geely-linked tech company ECARX to start trading on Nasdaq in SPAC merger

ECARX, the automotive technology company backed by Geely Chairman Eric Li, will start trading on the Nasdaq today as a publicly listed company via a reverse SPAC merger that values it at $3.8 billion. 

The public offering will raise an estimated $368 million after expenses, ECARX said in an investors’ presentation in November. Existing shareholders will retain 89 percent of their equity in the combined company. 

ECARX’s partner in the SPAC (special purpose acquisition company) is COVA Acquisition. In announcing the merger in May, COVA and ECARX revealed $45 million in investment from China’s Geely Holding Group, lidar sensor maker Luminar Technologies and Lotus Technology, a Geely brand.

ECARX computer technology, including software and infotainment, is used across Geely and Geely-affiliated brands such as Volvo, Polestar, Lynk & CO and Lotus in Europe, as well as China-based brands such as Zeekr and Geely, and the Smart joint venture with Mercedes-Benz. All told, 12 brands use its products.

Read more: How Geely quietly built a far-reaching European footprint

The company, which was founded in 2017, has about 2,000 employees and had revenue of $415 million in 2021, according to the investors’ presentation.

Ziyu Shen, the CEO of ECARX, said ahead of the listing that it was important for ECARX to grow internationally, and attract customers beyond Geely and Geely-associated brands.

“The timing and listing in the U.S. is very important to us,” Shen told Automotive News Europe. “Not only for raising money, but we want to branch out into international markets and let the automotive industry that we are here, we are fully prepared.” 

ECARX joins a number of Geely brands that have gone public in recent months, as founder and Chairman Eric Li seeks to raise capital to ensure future growth.

Volvo Cars went public in an IPO in October 2021, while Polestar – originally a Volvo sub-brand – went public in a reverse SPAC merger in June of this year. Zeekr, a premium electric-vehicle brand, has filed for a U.S. IPO, and Lotus Technology, a division of the sports car maker, also plans a public offering.

The Volvo and Polestar offerings have met with mixed results. Volvo’s share price was 46.3 Swedish crowns (about $4.50) on Wednesday after being listed in October 2021 at 53 crowns. Polestar’s share price was $4.73 on Tuesday after opening at nearly $13 in June; the automaker raised $1.6 billion in November to help fund its model plans through 2023, including $800 million from Volvo.