Xpeng Motors ambitious to raise over $1 billion in 2018

Shanghai (Gasgoo)- He Xiaopeng, Chairman of Chinese electric vehicle startup Xpeng Motors, revealed in an interview that the automaker strives to raise capital exceeding $1 billion this year.

Currently, the number of Xpeng Motors' capital raising ranks second among vehicle startups, only behind Nio. 

On January 29 this year, Xpeng Motors announced the kick-off of its Series B capital raising of RMB 2.2 billion which led by Alibaba Group, Foxconn and IDG Capital. This is Alibaba Group’s largest investment in auto sector. Unlike the previous capital raising, the startup didn’t reveal the ratio of its investors.

Previously, Xpeng Motors had completed a Series A capital raising of RMB 2.2 billion which was led by UCAR Group and a Series A+ capital funding with Alibaba Group, GGV Capital, Morningside Venture Capital and IDG capital as its major investors. After the Series B capital raising is completed, the automaker will gather a cumulative capital of over RMB 5 billion. 

He Xiaopeng revealed that the money will be used in plant construction, facility purchasing and manufacture refinement, and so on.

According to relevant information, the company has already constructed its own production base in Zhaoqing, Guangdong Province. The base covers a planned area of 1500mu (around 1 million square meters) involving a total investment of RMB 10 billion. The first phase will be finished by the end of 2019.

Up to now, Xpeng Motors still need other plants to produce vehicles. At the end of September last year, Xpeng Motors signed a cooperative framework manufacturing agreement with Haima Auto’s wholly-owned subsidiary who agreed to produce 50,000 vehicles per year for Xpeng Motors.

Some insiders predict that Xpeng Motors will greet a faster development under the continuous capital raising. However, other people think that the company struggles for survival by “money encirclement” in plant construction, R&D and industrial chain building. 

Reportedly, Xpeng 1.0 has already completed its mass production. Meanwhile, the automaker has started the mass production of Xpeng G3, an electric SUV showcased at 2018 CES which is expected to go on sales this year.

He Xiaopeng said that how to hand over vehicles at a considerable scale and with good quality is the biggest challenge for the company this year. It poses very strict requirements not only in the supply chain and production process, but also in the quality management.

He also revealed that Xpeng Motors will open its own flagship stores and sales outlets around several core cities in China this year. In addition, the startup will invest more heavily in the innovation of off-line sales.