Xpeng Announces $400 Million Series C Investment
Xpeng Motors continues its strategic growth this week with the signing of a Series C capital funding round of $400 million from a group of strategic and institutional investors. At the same time, Xpeng announced that Xiaomi Corporation is joining as a strategic investor.
Xpeng Motors, Steady As She Goes
Xpeng continues to add to its diversified corporate and individual investor pool while getting ready to unveil the P7 level-3 autonomous electric vehicle (EV), which we’ll cover next week at the Guangzhou Auto Show.
Xiaomi — a global leader in the technology and consumer electronics sector — as a strategic investor says a lot, as well. He Xiaopeng, Chairman and CEO of Xpeng Motors, also participated in the Series C round.
According to Xiaopeng: “The signing of the new fundraising, which not only attracted new strategic investors such as Xiaomi Corporation but also received strong support from many of our current shareholders, is a renewed endorsement of our long-term strategy, execution capability, and prudent business model. We are a strong believer that smart mobility and autonomous driving are going to transform our daily lives, and we share the same vision with Xiaomi that technology innovation is the key driver in reshaping our future transportation. Xiaomi’s experience and insight into consumer behavior, technology know-how, and market trends can add tremendous value to what Xpeng Motors is set to achieve.”
The press release followed Xiaopeng’s statement with Lei Jun, CEO of Xiaomi Corporation, commenting: “Xiaomi Corporation and Xpeng Motors have achieved significant progress through in-depth collaboration in developing technologies connecting smartphones and smart cars. We believe that this strategic investment will further deepen our partnership with Xpeng in advancing innovation for intelligent hardware and the Internet of Things.”
Brian Gu, Vice Chairman and President of Xpeng Motors, whom we interviewed last year, added: “2019 has been an eventful year dominated by economic headwinds, uncertainties in the global markets and government policy changes that have had a direct impact on overall auto sales in China. However, we were able to attain most of our business and financing targets, despite the difficult circumstances. We have demonstrated to our shareholders our ability to sustain our business in the face of these challenging conditions.”
This means that Xpeng is on track unveiling a producible EV a year and is diversifying its funding sources by securing several billions of RMB-denominated unsecured credit lines from leading Chinese and international banks. It also highlights the well-thought-out company’s business model and its long-term growth prospects.
Xpeng achieved the milestones this year that it said it would, such as teasing its 2nd production model, the P7 sedan, in April in Shanghai, which CleanTechnica was able to attend. This was followed with the 10,000th unit of its first production model, the G3 2019, in June. There was also the release of its enhanced version, the G3 2020, in July, a model that sports a 520 km NEDC-rated driving range. In the same month, the G3 snatched the highest total score of 92.2% among electric vehicles in the latest China New Car Assessment Program (C-NCAP) safety test. Next, Xpeng says it will launch its new P7 EV sedan in spring 2020, with deliveries in 2Q 2020.
How Fast Is Xpeng Moving?
When I first met Xiaopeng last year, and most of the core team, I wasn’t sure what to make out of this international Chinese startup. The stigma of companies from the country is always on our minds, and I was cautious at first. I soon found out it was a genuine company with modest but important goals – the number one of which was bringing an affordable smart EV to the market. When looking at the price of the G3 EV in China, retailing at around $22,000 to $25,000, it makes me wonder if and when the company will export those EVs to Europe and North America. Although Xiaopeng was shy about those ambitions last year, 2019 confirmed the company is on track and seems ready to look into that scenario.
I’ll leave the last comment from Xiaopeng to shed some light on this purely speculative thought:
“We are committed to investing in the development of core in-house technologies, smart manufacturing, and sales and service capabilities. With the strong support from our shareholders, customers and business partners, we are very confident that we can surmount the challenging environment and achieve our long-term goals.”
Next, stay tuned for a resoundingly interesting interview I had with Xpeng’s design team, followed by another with the autonomous research center here in San Diego and Silicon Valley. The more I look at Xpeng, the more I see a new wave of smart and deliberate practical startups reaching maturity.
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