Chinese Electric Vehicle Startup Xpeng Motors Raises $400 Million in Series C Funding

author: Eric Walz   

The Xpeng Motors P7 electric sedan goes on sale next year in China.

Electric vehicle startup Xpeng Motors today announced the signing of its Series C capital funding of $400 million. The funding comes from a group of strategic and institutional investors, including corporate and individual investors and private equity firms.

The latest fundraising values the EV startup at nearly $4 billion.

The proceeds will be primarily used for development of autonomous driving-related software, mass production of the automaker's G3 electric sport-utility vehicle and upcoming P7 sedan, as well as expanding Xpeng's retail network in China.

Xpeng announced that Xiaomi Corporation, one of the world's largest smartphone makers and a leader in consumer electronics, will join as a strategy investor to the automaker. Xpeng's existing investors include Chinese e-commerce giant Alibaba. 

Mr. Lei Jun, CEO of Xiaomi Corporation said that Xpeng Motors and Xiaomi have achieved significant progress in developing technologies connecting smart phones 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 (IoT)."

In addition to the latest equity raising, Xpeng Motors announced 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.

"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," said Mr. He Xiaopeng, Chairman and CEO of Xpeng Motors, who also participated in the Series C round. 

Xpeng Motors is going up against Tesla and other EV startups in the China market, offering up technologically advanced electric vehicles that cost much less than Tesla models. The company's first model, the G3 SUV officially launched in Dec 2018. 

The fully-electric G3 SUV includes some design elements inspired by Tesla, including a panoramic windshield which extends over the front seats and a center-mounted touchscreen display. Like Tesla models, Xpeng's electric vehicles are capable of receiving over-the-air updates.

The G3 SUV is available in two versions: the longe-range G3 520 and the G3 400. The G3 long-range version has a NEDC driving range of 323 miles (520 km), the longest range of any compact EV SUV in its class, according to Xpeng. The G3 400 version achieves a 249 mile (401 km) NEDC range respectively.  The G3 400 starts at just 143,800 yuan ($20,520).

In June, Xpeng announced that the 10,000th G3 rolled off the assembly line at the company's contract manufacturer Haima Automobile Group in the Henan provincial capital of Zhengzhou.

The Xpeng G3 SUV on display in July at Semicon West 2019 in San Francisco. (Photo: FutureCar)

Xpeng unveiled its second model, the P7 electric sedan at the Shanghai Auto Show in April. The P7 sedan is a sleek, fully-electric four-door coupe. 

At first look, the P7 sightly resembles a Tesla Model S, which is not surprising since Xpeng said it was inspired by Tesla and studied many of its open source patents. Xpeng plans to launch the P7 sedan in the spring 2020 and will start delivery in 2Q 2020.  

The P7 features all-wheel-drive setup with dual electric motors, reaching 0-60 mph in 4 seconds. New European Driving Cycle (NEDC) range is 372 miles (600 km).

"Our visually stunning and technologically groundbreaking models like the P7 demonstrate our determination and commitment to accelerate the development of smart mobility." said He Xiaopeng, Xpeng Motors Chairman & CEO, during the unveiling of the P7.

Xpeng also working on autonomous driving in China, designing all of the software in-house. The automaker said it has around 300 people working on autonomous driving across five cities on two continents, including Beijing, Shanghai, Guangzhou, in China, and Silicon Valley and San Diego in the U.S.

Xpeng's XPILOT autonomous driving system was specifically developed for China's unique road conditions, with features adapted for China's crowded city streets. The autonomous driving system feature will launch with automated cruise control and automatic lane changing on highways, as well as automatic parking.

"China has unique challenges, even lanes lines are painted differently than in the U.S., which requires different perception capabilities." said Xinzhou Wu, VP of Autonomous Driving at Xpeng Motors.

Xpeng was also the first Chinese automaker to use Nvidia's Xavier autonomous driving computing platform for production vehicles.

By 2022, Xpeng plans to add autonomous parking followed by automated city driving capability to its vehicle lineup.

"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." said Mr. He Xiaopeng.  

"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." 

Xpeng is part of a new wave of electric vehicle startups looking to follow Tesla's lead in China, the world's biggest auto market. Other include NIO, Byton, PoleStar and Faraday Future.

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.