(Bloomberg) – Electric vehicle maker Xpeng Motors raised around $ 500 million from a group of risky investors, showing that Chinese startups with promising car models can attract funds even when industry sales drop.
Investors in the C + Series financing round include Aspex Management, Sequoia Capital China, Hillhouse Capital and Coatue Management, Xpeng said in a statement Monday. Fundraising follows a round of $ 400 million in November.
Xpeng increases its chances of remaining a viable competitor in the world’s largest electric car market, where it competes with sales leader Tesla Inc., local peers like NIO Inc., and global rivals like BMW AG and the maker of Mercedes- Benz Daimler AG. Although industry sales have been declining since the government cut subsidies last year, the market is in its early stages.
Other aspiring electric vehicle manufacturers, such as Byton Ltd., have run into funding problems and closed operations this year amid the market crash, which was exacerbated by the coronavirus pandemic. Sales of new energy vehicles, including electric cars, fell 35% to 85,600 units last month, according to the China Passenger Car Association.
Meanwhile, competition is getting tougher, with the number of new Tesla registrations hitting a record last month and BMW and Mercedes pulling out EV models.
Xpeng delivered 5,185 units of its first vehicle, the G3 SUV, in the first half. It began deliveries of its second model, the P7 sedan, last week. A P7 variant available in September has a range of up to 706 kilometers (439 miles) on a single charge and costs approximately 254,900 yuan ($ 36,000) after subsidies, significantly less than competing Tesla and NIO models.
Sponsors of Xpeng, which was founded in 2015, also include e-commerce giant Alibaba Group Holding Ltd. and Xiaomi Corp.
(Updates with Xpeng models in the sixth paragraph).
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