Chinese Electric Vehicles Maker Xpeng Raises $500M After Reports Of US IPO

Alibaba Group Holding Limited-backed (NYSE: BABA) Xpeng Motors Technology Ltd. said it raised nearly $500 million in a Series C+ funding round, even as electric vehicle sales see a slump in mainland China.

What Happened

Investors that participated in the funding of the Chinese EV maker included Hillhouse Capital, Coatue Management, Aspex, and Sequoia Capital's local division, Bloomberg reported Monday.

Xpeng last raised $400 million from both corporate and individual investors, including Xiaomi Corporation (OTC: XIACF), in a Series C funding round in November.

The company is also reportedly planning to list its shares in the United States, seeking to raise about $500 million in an initial public offering.

Why It Matters

Xpeng’s latest round of fundraising gives it a boost in the world’s largest EV market and pits it against the market leader Tesla Inc. (NASDAQ: TSLA) and local competitors such as Nio Inc (NYSE: NIO). The funding comes at a time when the company has started the deliveries of its P7 sedans.

Domestic sales of electric vehicles fell by 4% in 2019 to 1.2 million units in China, for the first time ever, as Beijing slashed subsidies by half, Nikkei Asian Review reported.

The local EV companies face an additional challenge as the market share of Elon Musk-led Tesla continues to increase in the country.

Photo credit: Xpeng Motor Technology Ltd.