ECARX Holdings, a Chinese automotive technology startup, listed its shares on the Nasdaq on December 21 alongside special purpose acquisition company COVA Acquisition Corp. The new entity retains the ECARX name and its shares and warrants have commenced trading under the symbols “ECX” and “ECXWW.”
As early as May of this year, ECARX announced the signing of a merger agreement with COVA. In the transaction in May, the equity value of ECARX was $3.4 billion, and it received $300 million in cash held by COVA in the form of trust, and $45 million in additional financing from investors including Geely Holding, Luminar and Lotus Technology. Prior to this, ECARX completed three rounds of financing worth about $650 million from Geely, Baidu, SIG and others.
ECARX’s co-founders are two automotive entrepreneurs, Chairman and CEO Ziyu Shen and Eric Li, who is also the founder and chairman of Geely. Headquartered in Wuhan, its core products include on-board infotainment system, digital cockpit, on-board chip module solution and core operating system. Its technology has been applied to more than 3.7 million vehicles worldwide, serving 12 brands in Asia and Europe.
Since its inception, ECARX has been determined to serve global consumers. In 2019, it established joint ventures with Proton Automobile and ALTEL of Malaysia to deepen its overseas layout. In 2020, it established a branch and R&D center in Gothenburg, Sweden, to open up the European market. Shen also publicly stated that the company accelerates its global expansion through financing and technology.
ECARX achieved revenue of $415 million in 2021, and is expected to achieve adjusted profit before tax, interest, depreciation and amortization before the end of 2024. ECARX also intends to incubate key suppliers, so as to enhance its comprehensive competitiveness. As early as 2018, ECARX and Arm China established SiEngine Technology to focus on three product lines – intelligent cockpit chips, automatic driving chips and vehicle-mounted CPU chips. In December of last year, the company’s first 7nm intelligent cockpit chip was launched, and the next generation of products is expected to be commercialized in 2024.
However, there are still many problems with the application of ECARX’s products. Geely and its sub-brand Geometry and Lynk & Co are major customers of ECARX. However, the car system carried by these brands’ models is often described by users as “Android phones of 10 years ago” due to their many failures. ECARX has failed to convince many consumers outside of Geely’s ecosystem.
The listing of ECARX seems to be the perfect ending of Li’s investment in 2022. This year, Polestar was listed on the Nasdaq, raising about $890 million, Geely’s Zeekr plans to list in the United States, raising more than $1 billion, and Caocao Mobility, a ride-hailing platform, is reportedly planning to debut in Hong Kong.