Xpeng produces the G3 SUV.

Photo: Qilai Shen/Bloomberg News

Xpeng Inc., one of Tesla Inc.’s TSLA 6.42% Chinese rivals, will raise $1.5 billion through an initial public offering in the U.S., more than initially planned, because of high investor demand.

Xpeng will sell 99.73 million American depositary shares at an offer price of $15, the company said Thursday. That is more than the 85 million shares that were previously planned, and the offer price is higher than the initial guidance of $11-$13.

The electric car maker joins the more than 20 Chinese technology companies to tap the U.S. market this year by listing on the Nasdaq Stock Market or the New York Stock Exchange and raising a total of over $6 billion, according to Dealogic data.

China’s electric-vehicle startups, which faced declining sales last year while collectively incurring billions of dollars of losses, are resurgent.

The turning point came, according to auto analysts, when Nio, the highest-profile Chinese EV startup, secured nearly $1 billion in funding from several state-owned companies in the eastern city of Hefei, allaying fears about the company’s solvency.

Since then Nio’s New York-listed shares have rallied from under $3 to nearly $18.

Tesla’s strong performance in China has also buoyed investors, said Bill Russo, the founder of Shanghai-based consulting firm Automobility. Just as the Apple iPhone seeded the Chinese smartphone market and enabled the rise of local players such as Huawei Technologies Co. and Xiaomi Corp., investors and local EV makers are banking on Tesla filling the same role China’s EV sector, he said.

Tesla’s China sales took off after its Shanghai plant started delivering Model 3 sedans in December, helping convince wavering investors that electric cars remain the automotive industry’s future.

Xpeng, which produces the P7 sports sedan and the G3 SUV, sold 4,696 vehicles in the first half of 2020, according to LMC Automotive, lagging behind its startup peer Nio, which had sold 14,781 during the same period.

Li Auto sold 9,500 units, while Tesla outsold all of them combined, selling 48,384 vehicles.

While Tesla builds its own cars in Shanghai, Nio employs a local state-run auto maker to manufacture its vehicles.

Xpeng does both, outsourcing production of its first model, a sport-utility vehicle, and starting production of a new sedan at its own plant in the southern city of Zhaoqing in May.

Xpeng said Thursday that underwriters have the option to sell an additional 14.96 million ADS under a green-shoe option.

Shares of the company are expected to begin trading on Thursday on the NYSE under the symbol “XPEV.”

Credit Suisse, J.P. Morgan and BofA Securities are among the banks advising on the offering.

Write to P.R. Venkat at venkat.pr@wsj.com and Trefor Moss at Trefor.Moss@wsj.com

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