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Chinese electric car company Xpeng Motors raises $500m in new funding

This month, Xpeng Motors started deliveries of its new P7 sedan, which is seen as a competitor to Tesla’s Model 3

Chinese electric car company Xpeng Motors has raised $500m of new funding as competition continues to build up in China’s new energy vehicle market.

The funding came from a group of investors including Aspex, Coatue, Hillhouse Capital and Sequoia Capital China. It follows a $400m cash injection in November from investors that included Chinese smartphone maker Xiaomi. 

China’s electric vehicle sector has been hit hard by the coronavirus pandemic. Sales of new energy vehicles fell 33.1 per cent year-on-year in June, according to data from the China Association of Automobile Manufacturers.

However, sales have been rising month-on-month as the Chinese economy slowly recovers.  

Earlier this year, the Chinese government said new energy vehicle subsidies and tax break policies that had been set to expire this year were extended to 2022. Charging infrastructure around the country also got a 2.7bn yuan ($385.7m) injection. 

This month, Xpeng Motors started deliveries of its new P7 sedan, which is seen as a competitor to Tesla’s Model 3. In January, Tesla began rolling out Model 3 cars made in its Shanghai factory to customers in China. 

Chinese electric carmakers have recently been pushing to raise money. Earlier this month, Li Auto filed for an initial public offering in the US but has not yet priced its shares. 

Established in 2015, Xpeng Motors is headquartered in Guangzhou, China, with offices in Beijing, Shanghai, Silicon Valley and San Diego in the US and manufacturing plants in Zhaoqing and Zhengzhou. 

FURTHER READING: Tesla plans to launch new low-cost, long-life batteries in its Model 3 sedan