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Electric cars

Chinese electric car start-up Xpeng raises US$587 million as it gears up to take on Tesla

PUBLISHED : Thursday, 02 August, 2018, 11:07am
UPDATED : Thursday, 02 August, 2018, 11:09am

Xiaopeng Motors, the electric car start-up backed by Alibaba Group Holding, has completed a 4 billion yuan (US$587 million) funding round, stepping up its war chest to take on giants including Tesla in the world’s largest auto market.

The latest series B+ round is led by Primavera Capital, Morningside Venture Capital and the company chairman and chief executive He Xiaopeng, it announced on Thursday. Hillhouse Capital, K11 and Eastern Bell Venture Capital have also chipped in as new investors in the round.

Despite not having delivered a single mass-produced vehicle, the Guangzhou-based start-up has raised over 10 billion yuan since its inauguration and is now valued at over 25 billion yuan, according to the company.

Xiaopeng, also known as Xpeng, unveiled its first production model at the CES technology show in Las Vegas in January. The G3 features a windscreen that extends all the way back to mid-roof giving occupants a sky view, Star Wars-inspired headlights – the auxiliary lamps are shaped like light sabres – and a contour that the company said resembles a shark.

The car is expected to be priced between 250,000 yuan and 300,000 yuan (US$47,440) when it goes on sale later this year, putting it in the same price bracket as Audi’s Q3, Mercedes-Benz’s GLA and BMW’s X1. Tesla’s Model X starts from about US$118,000 in China.

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“Autonomous driving and smart connectivity is our core difference,” said He. “Xiaopeng will start delivery of the G3 model by the end of the year, and we are confident users will receive pretty, cost efficient and smart connected cars by then.”

Xpeng is one of the few dozen Chinese electric car start-ups that have emerged in recent years after the government started issuing special manufacturing permits to companies outside traditional auto industry players.

Venturing into territory dominated by GM, Japan’s Toyota Motor and Germany’s VW, the start-ups are investing billions of dollars in advanced technologies that form the backbone of autonomous and connected driving, both seen as the future of mobility.

The financing is also likely to escalate the rivalry among the country’s top electric car unicorns – those with a private valuation of more than US$1 billion – which include NIO, WM Motor and Byton.