GUANGZHOU -- Chinese electric vehicle maker BYD has raised 29.9 billion Hong Kong dollars ($3.85 billion) from a stock sale, with the proceeds to fortify the company against Tesla's successful forays in its backyard.
BYD issued 133 million new shares in Hong Kong's stock market priced at HK$225 each, the company said Thursday. This represents roughly 5% of the automaker's shares in circulation, including those in Shenzhen.
The move comes as the electric-car manufacturer faces Tesla, which has risen as the leading seller in China since the U.S. rival began producing and delivering its vehicles locally just a year ago. On top of that, Chinese startups like NIO have added to the competition.
The share issue drew more than 200 institutional investors, according to local media. BYD described the stock sale as the largest in the Asian auto industry over the past decade.
Funds from BYD's stock sale will go toward working capital, and to research and development of new models.
BYD suffered a 17.4% drop in new-energy vehicle sales for 2020, moving only 189,000 autos. But the company has begun tracing a path to recovery by selling 28,000 vehicles in December, more than double the volume from a year earlier.
BYD's offering marks the latest in a string of share sales in China's EV industry, especially among companies that have listed in the U.S. Last month alone, NIO raised $3 billion while Xpeng Motors and Li Auto raised $2.5 billion and over $1.3 billion, respectively.
Share prices of EV makers have soared since last year, with new S&P 500 component Tesla leading the way, emboldening these companies to raise capital. BYD ranked among Asia's top gainers in market capitalization last year.
Hong Kong-listed BYD shares closed 1.8% higher Thursday at HK$248.40.
Chinese sales of new-energy vehicles -- a Chinese catch-all term for EVs, hybrids and fuel cell autos -- have been robust in recent months. Though the coronavirus pandemic sunk demand in the first half of 2020, full-year purchases rose 10.9%, topping 1.36 million vehicles.