GUANGZHOU, China — Electric and autonomous vehicle maker Xpeng Motors this week announced that it has raised $400 million in Series C capital funding from investors including telecommunications firm Xiaomi Corp.
Xpeng Motors designs and manufactures vehicles that it said are seamlessly integrated with the Internet and use the latest advances in artificial intelligence.
“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,” stated He Xiaopeng, chairman and CEO of Xpeng. “Xiaomi’s experience and insight in consumer behavior, technology knowhow, and market trends can add tremendous value to what Xpeng Motors is set to achieve.”
Rapid ramp up for Xpeng Motors
Xpeng Motors was co-founded in 2014 by Henry Xia and He Tao, former senior executives at Guangzhou Auto with experience in automotive research and development. Like other companies, it’s starting with features such as automatic parking with the intention of developing greater autonomy over time.
A year ago, the startup announced a partnership with NVIDIA Corp. to develop Level 3 autonomous vehicles. Xpeng opened U.S. operations in Mountain View, Calif., as it prepared to compete with the likes of Palo Alto, Calif.-based Tesla Inc., which also produces electric vehicles with driver-assist features.
The company launched its first production model, the G3 SUV, in December 2018. It produced 10,000 units by June 2019, and delivery to customers was set to begin in September.
In July, Xpeng released the G3 2020 with a 520km (323 mi.) NEDC (New European Driving Cycle) driving range. Also in July, the G3 obtained the highest total score of 92.2% among electric vehicles in the latest China New Car Assessment Program (C-NCAP) safety test. Last month, Xpeng Motors partnered with TELD, which operates China’s largest charging network.
The G3 2020 includes Traffic Congestion Assist, Intelligent Cruise Assist, and Automatic Lane Change functions. It also uses multiple cameras and AI to detect driver fatigue and distraction while monitoring heartbeat and health status.
Xpeng’s second production model, the P7 four-door electric sedan, premiered at the Auto Shanghai show in April 2019. It will be delivered to customers in China in the second quarter of 2020. In addition, Xpeng said it is building a fully owned “intelligent factory” in Zhaoqing, Guangdong Province.
Funding in the face of economic headwinds
Xpeng Motors’ initial backers included CEO He Xiaopeng, who also founded UCWeb Inc. and is a former Alibaba executive. It raised $587 million in August 2018 and obtained funding from prominent Chinese and international investors including Alibaba Group and IDG Capital. Xiaomi will join as a strategic investor.
“The signing of the new fundraising, which not only attracted new strategic investors such as Xiaomi Corp., 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,” said He, who also participated in the Series C round.
“Xiaomi Corp. and Xpeng Motors have achieved significant progress through in-depth collaboration in developing technologies connecting smartphones and smart cars,” said Lei Jun, CEO of Xiaomi. “We believe that this strategic investment will further deepen our partnership with Xpeng in advancing innovation for intelligent hardware and the Internet of Things.”
“2019 has been an eventful year dominated by economic headwinds, uncertainties in the global markets and government policy changes that have had direct impact on overall auto sales in China,” added Brian Gu, vice chairman and president of Xpeng, referring in part to ongoing trade disputes with the U.S. “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.”
In addition to its latest equity funding, Xpeng Motors said it has diversified its funding sources by securing several billions of RMB-denominated unsecured credit lines from leading Chinese and international banks including China Merchants Bank, China CITIC Bank, and HSBC.
“We are committed to investing in the development of core in-house technologies, smart manufacturing, and sales and service capabilities,” He said. “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.”