Chinese electric vehicle (EV) start-up Hozon New Energy Automobile is looking to raise US$1bn in an initial public offering (IPO) in Hong Kong, according to local reports citing people with knowledge of the matter.

Zhejiang-based Hozon sells three EV models in China under the Neta brand, with prices starting at under US$10,000. The company is looking to tap into rising demand for EVs in smaller cities and towns where affordability is lower. It sold a total of 41,400 EVs in the first nine months of 2021.

Hozon is one of a number of Chinese EV startups, including WM Motor and Leapmotor, considering listing in Hong Kong to raise funds rather than in overseas markets such as the Nasdaq in the USA due to rising tensions between China and the USA. The company, backed by an investment arm of the city of Yichun in central Jiangxi province, is said to be looking to launch the IPO early next year.

Both Hozon and WM Motor had previously considered listing their shares on Shanghai’s Nasdaq-style Star board, before Chinese regulators stepped up scrutiny of the hi-tech credentials of prospective IPO companies. Both shelved their plans to list in Shanghai as a result, along with scores of other companies.