China’s Xpeng says it will likely raise a ‘comparable amount’ to the last round of funding, which was $600 million

Automobile

Jun 14, 2019

Chinese electric vehicle start-up Xpeng Motors says it’s hoping to close a funding round this year which will probably be a “comparable amount” to the last round that was about $600 million, the company’s president told CNBC.

China has seen a boom in electric car start-ups, thanks to government support including subsidies for companies which make such so-called new energy vehicles. Xpeng is one of the companies vying for the pole position in this area.

Xpeng has launched and started deliveries of a model it called the G3 SUV. In April, the company also unveiled a coupe called the P7. The Chinese automaker has been looking to ramp up the production and deliveries of its cars, and previously stated its goal of delivering 10,000 units of its G3 SUV by July.

In an interview with CNBC on Wednesday, Brian Gu, president of Xpeng, said of the delivery target: “I will not make that promise now but we are very comfortable with that target.”

Electric vehicle companies are very capital intensive. In an interview with CNBC in March this year, Xpeng CEO He Xiaopeng said the company was seeking at least $500 million of funding.

Just last year, Xpeng raised 4 billion yuan ($578 million) in a funding round. Gu told CNBC that the company is on track to raise a similar amount of money this year.

“Last year, we raised in a B Plus round, raised 600 million U.S. dollars. We’re probably going to raise (a) comparable amount to the last round,” Gu said. “It will definitely have to be this year.”

Funding round sizes can change and the final figure could change.

The Xpeng president noted that several factors have weighed on investor sentiment, including the poor performance of publicly listed electric car makers.

“I think the general macro environment in ... trade as well as in (the electrical vehicle) sector in general, the public company trading performance ... has not been stellar. That has a ... damping effect I think on investment sentiment,” Gu said.

“But I think the investors tend to still be drawn to, I would say, top companies in the sector. So I think it will create probably more trouble for the followers — people who does not have a product in the coming month(s) or years,” he added.

Publicly listed electric car companies have not fared so well this year. Tesla shares are down over 37 percent year-to-date while U.S.-listed Chinese electric vehicle firm NIO has fallen nearly 60 percent.