Hong Kong Launches Green Security Token Offering for NEV Sector

The region has taken another step towards deploying blockchain technology and Web3 economy into the new energy vehicle (NEV) sector.

Hong Kong recently approved several spot crypto exchange-traded funds (ETFs) applications last month. The region has taken another step towards deploying blockchain technology and Web3 economy to revolutionise its automobile industry, particularly the new energy vehicle (NEV) sector.  

Hong Kong, a special administrative region (SAR) in China, will now see the introduction of one of the world’s first green security token offerings (G-STO) for the NEV sector.  

On 16th March, AX Xeco Limited (XECO) and CSpro (Hong Kong) Limited (CS-PRO) jointly announced the launch of one of the world's first G-STO for the NEV sector. The Securities and Futures Commission (SFC) has licensed it to carry out Type-1 regulated activities in securities, and the S-GTO will be launched on the Ethereum (ETH) blockchain.  

Each S-GTO participant has real-time visibility into the product/service utilisation and estimated return based on the business performance of the NEV charging project. With the deployment of blockchain technology, G-STO claims to lower financial barriers in the private equity market and empower a larger user base to participate in the NEV development. The issuing bodies are marketing the offering as a revolutionary intervention in the Environmental, Social, and Governance (ESG) investing landscape.  

"The highly innovative way of fundraising through G-STO enables XECO to expedite the roll-out plan of installing NEV chargers throughout Hong Kong," said Venus Wong, Founder and CEO of XECO.  

On the other hand, Samson Lee, founder and CEO of CS-PRO, said:

"This strategic collaboration between XECO and CS-PRO exemplifies both companies' commitment to innovation and collaborative growth in the ESG sector and to bringing new forms of financing to fuel the growth of the NEV industry."  

 

China Leads EV Growth  

Counterpoint Research recently reported that China remained the global leader in electric vehicle (EV) sales with a 28% YoY growth. BYD, the country’s largest EV maker, had its sales of hybrid vehicles increase by 7% in Q1 2024, accounting for nearly 33% of the global hybrid market.  

Hong Kong, in particular, is gradually emerging as a centre of NEV manufacturing in China. According to a South China Morning Post report, the Hong Kong SAR has approved 264 EV models from 16 jurisdictions to run on its roads. International brands such as Audi, Nissan, Tesla, BMW, Mercedes-Benz, and Chinese brands such as BYD and SAIC Maxus are among the approved EV manufacturers. Remarkably, over 60% of newly registered cars in the SAR during the first three quarters of 2023 were electric. By the end of October 2023, the region had 70,701 EV units and 7,085 public EV chargers, representing about 7.7% of its total vehicle population.  

Drivers prefer NEVs because they are less expensive than fuel-propelled vehicles and receive government subsidies. With decarbonisation as a top priority, the authorities in Hong Kong are keen to replace fuel vehicles with NEVs over the next few years. Therefore, automobile manufacturers are deploying emerging technologies such as blockchain and introducing digital token offerings to build a decentralised ecosystem around NEVs.