Aiways Europe to debut on US stock market thanks to SPAC deal
Aiways Europe first mentioned its intention to go public via a merger with a SPAC company in May. That was after Aiways decided to become a pure export brand – initially focussing on Europe. To do this, the company urgently needs additional capital. Hudson Acquisition now states that the transaction will correspond to a pre-merger equity valuation of Aiways Europe of 410 million US dollars – “subject to adjustment.” In all likelihood, the merged company will thus make money quickly.
The agreement now reached between the two sides provides for the establishment of EuroEV Holdings Limited, a holding company based in the British Virgin Islands, which will give Aiways a shortcut to listing on the Nasdaq. The CEO of Aiways Europe, Dr Alexander Klose-Mozer, will take over the management of EuroEV once the Business Combination Agreement has been concluded. However, the project still depends on the approval of the US Securities and Exchange Commission (SEC) and Nasdaq.
The designated CEO Klose-Mozer says: “Riding the wave of electric vehicles globally, and tapping into the capital markets through a planned listing on Nasdaq, I am extremely excited about the market and business opportunities ahead.” His company is convinced that the European BEV market is maturing and could become the fastest growing market. “We also believe that our global sourcing capability, deep understanding of European requirements and needs, and innovative approach to local production in our plan are assets relative to other electric vehicle companies.”
That’s right: Klose-Mozer is talking about local production. Elsewhere, this point is made in an accompanying press release: “In addition to sourcing from its manufacturers in China, Aiways Europe has secured the ability to localise the production of Aiways vehicles in Europe beginning in 2025,” it says. In an effort to increase its supply base and expand its product portfolio, it has signed letters of intent to enter into supply agreements from 2025 with a manufacturer for the supply of light vehicles and with another manufacturer for the supply of vans and related products.
It would allow Aiways to avoid special tariffs on electric cars from China. However, the company only states that it has secured the option of local production – and not that it will immediately utilise this option from 2025.
That Munich-based Aiways European unit now operates so independently because of the Chinese manufacturer’s strategic decision to withdraw from the Chinese market due to the massive price war in China and become a pure export brand. Against this backdrop, the company needs capital to resume production of its two models, among other things.
Aiways had gone quiet last autumn and winter following reports of financial difficulties and the production stop at its own plant in China. In March 2024, Bernd Abel, Aiways’ Overseas Communications Director, told the Reuters news agency: “We need a major investment and are confident that we can make it.” This large investment is now being made via an accelerated IPO via SPAC. SPACs are investment companies already listed on the stock exchange and were founded precisely to merge with another company, hence the term ‘special-purchase acquisition company’ (SPAC). Hudson Acquisition is already listed on the Nasdaq under the ticker symbol HUDA.
In June 2023, Chinese media reported that vehicle production at the Aiways plant in Shangrao had already been halted in February 2023, as neither suppliers nor employees could continue to be paid. The background to this was probably also the entry of a new investor, which took longer than planned. After two changes of CEO in 2022, another followed in August 2023. The appointment of Hugo Zhu already indicated that Aiways wanted to focus on business outside of China in the future – the old investors had previously called for the China business to get up and running before turning to other markets. Investors in the electric vehicle manufacturer, which was founded in 2017, include technology giant Tencent, ride-hailing group DiDi and battery manufacturer CATL.
A number of electric car start-ups have recently come under pressure in China and some have had to cease operations – such as WM Motors and Human Horizons with its HiPhi brand. Unlike these brands, which are primarily focussed on China, Aiways had already sold its cars in 16 European countries before the production stop, albeit in rather small numbers. If Aiways were to resume production with an investment, success is not guaranteed: Competitors’ vehicles have developed enormously.
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