Chinese electric vehicle (EV) startup Xpeng Motors has raised USD 400 million in Series C financing with Chinese smartphone maker Xiaomi coming onboard as a strategic investor, the company said today.
The strategic investment is expected to deepen the partnership between the two companies “in advancing innovation for intelligent hardware and the Internet of Things”, Xiaomi CEO Lei Jun said in a press release.
Both Leijun and He Xiaopeng, founder and CEO of Xpeng Motors, have invested in the Guangzhou-based upstart in their own capacities.
In addition, Xpeng has also secured several billions in RMB of unsecured credit lines from leading Chinese and international banks including China Merchants Bank, China CITIC Bank, and HSBC. Some of the previous backers include Alibaba, Foxcoon, IDG China, and Morningside.
The funding will be used for the research and development of autonomous driving software, the mass production and promotion of its G3 SUV model and P7 sedan, as well as expanding the retail network, people familiar with the matter told 36Kr.
The first production model of Xpeng, dubbed G3 SUV, was launched in December 2018 and shipped 10,000 models as of June. Its second model, the P7 sedan, was premiered in April and will be launched in next spring and delivered in the second quarter of 2020. KrASIA previously reported that the Chinese EV maker rolled out its G3 2020 model in July.
The fresh capital injection comes at a time when the total sales of NEV (new energy vehicles) in China, the world’s largest automobile and EV market, have plunged 45.6% year-over-year in October, according to the China Association of Automobile Manufacturers. Beijing is cutting back on subsidies for the EV sector, a move could discourage potential EV buyers. Automobile sales, in general, are declining in China. In September auto sales in the world’s second-largest economy fell for a 15th consecutive month.
36Kr is KrASIA’s parent company.