To The Moon

Hozon New Energy Automobile Co., a startup that makes affordable electric vehicles, has picked banks including China International Capital Corp.and Citic Securities Co.for an initial public offering in Hong Kong, according to people familiar with the matter.

The Chinese EV firm is also working with Morgan Stanley and UBS Group AGon the first-time share sale, which could take place as soon as this year, the people said. The IPO could raise about $1 billion, the people said, asking not to be identified as the information is private.

Deliberations are ongoing, details such as the fundraising amount and timing could still change and other banks may be added to the lineup, the people said.

A representative for Hozon said the company would disclose as soon as there’s any update, and declined to comment further. Representatives for Citic Securities, CICC and UBS declined to comment, while Morgan Stanley couldn’t immediately respond.

The Zhejiang-based company is seeking to raise about $500 million ahead of the IPO at about a $7 billion valuation, Bloomberg News reported last month.

Hozon is operating in an already crowded field, facing competitors such as Nio Inc., Li Auto Inc. and XPeng Inc. The company, whose cheapest model costs less than a third of Tesla Inc.’s most affordable sedan in China, is betting on rising demand for EVs in the country’s rural areas.

Backed by biliionaire Zhou Hongyi’s cybersecurity firm 360 Security Technology, Hozon offers three electric vehicle models under the Nezha brand, including a sport utility vehicle, its website shows.