Chinese electric vehicle manufacturer Xpeng backed by Alibaba Group Holding Ltd. on Monday stated that they had raised around $500 million in its latest funding round. The funding is pooled to manufacture models suitable for China’s middle-class consumers.
Investors in the funding round include private equity firm Aspex Management, Hillhouse Capital, technology sector hedge fund Coatue Management, and American venture capital firm Sequoia Capital. The other companies include Foxconn, Xiaomi, GGV Capital, Morningside Venture Capital, Primavera Capital, and IDG Capital.
He Xiaopeng, the Chief Executive of Xpeng said that the company is aiming for the manufacture of electric G3 sport-utility vehicles and P7 sedans having autonomous driving capabilities.
Last year, the EV startup raised around $400 from its investors including Xiaomi to boost its growth. The funding gave Xpeng a valuation of nearly $4 billion which was greater than its valuation in 2018.
Stiff competition with Tesla
Recently, the shares of automobile manufacturers including Tesla Inc. and Nio Inc. have risen in the light of increased need for electric vehicles. Tesla, for instance, inaugurated its $2 billion electric car factory in China. Nio, on the other hand, delivered around 20,000 electric cars to its buyers last year.
With the funding, Xpeng expects to develop intelligent vehicle technologies. Also, they are planning to open 200 showrooms across China by the end of the year.
Dampening automotive industry
Despite its new funding, the coronavirus pandemic has dampened the market for electric car manufacturers including Xpeng. Furthermore, the decreased government subsidies to electric vehicles have added to the crisis.