Xpeng Motors said it has reached an agreement securing a $586 million round of financing from a state-owned investment company, as the Chinese electric vehicle maker pursues further expansion with plans to build its second plant.
Guangzhou GET Investment Holdings Co., Ltd, a subsidiary owned by the Guangzhou Economic and Technological Development Zone, part of the city’s municipal government, will inject RMB 4 billion (around $586 million) into Xpeng to fuel its growth, the company said Monday.
As part of the agreement, around RMB 1.3 billion from the financing will be spent on the construction of a manufacturing base, scheduled to kick off production by late 2022, within the development zone.
Xpeng has been mass-producing cars since the second quarter of this year in its first wholly-owned facility located in in Zhaoqing, a city neighboring Guangzhou, according to the SCMP. Previously, the company contracted production to Chinese OEM, Haima.
“With the strong support from the Guangzhou government, we are confident we will execute on our strategic growth initiatives and deliver the highest quality products and services to meet our customers’ needs,” Xpeng CEO He Xiaopeng said in an announcement.
Headquartered in Guangzhou, capital city of southern Guangdong province, Xpeng is accelerating expansion domestically as well as overseas. The company recently kicked off its global sales initiative with a shipment of 100 G3 crossovers destined for Norway. The vehicles will sell at a starting price of 358,000 Norwegian Krone ($37,590). Sales are expected to begin in November, with help from a local dealer.
The EV maker is also attempting to boost domestic sales by offering lifelong free charging, an offer which started Saturday, to individual buyers from 24 major cities, including Beijing, Shanghai, Guangzhou, and Shenzhen.
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The company plans to expand its free charging offer more than 60 cities by year-end and the number will more than triple to 200 by the first half of 2021. Xpeng is the first Chinese EV maker to offer free lifetime charging, limited to 3,000 kilowatt-hours (kWh) of charging credits annually, for first-time buyers.
Rival Chinese EV maker Nio has offered a free battery swap service for customers with their first cars, but recently capped the service at six free swaps per month to new owners.
Currently a top seller in the Chinese EV market, Tesla has been capricious with its free supercharging policy. The US EV maker reportedly offered two years of Supercharging for free a year ago in an aim to boost Model 3 deliveries, after it put an end to free unlimited supercharging in 2018, according to a TechCrunch report.
Xpeng has lagged other major EV players in the Chinese market, delivering a total of 4,099 vehicles for the first seven months of this year. Nio handed over 17,702 vehicles to customers during the same period, followed by Li Auto at 12,181 units. Tesla currently dominates the Chinese EV market with 56,762 Model 3 sold during the same period, according to figures from China Passenger Car Association.