Xpeng Motors Inc XPEV said Monday that it will receive $78 million in funding from the investment arm of a local Chinese government for business expansion purposes.
What Happened: The automaker said it had reached a “strategic cooperation agreement” with the Guangdong provincial government for an RMB 500 million investment in its China subsidiary.
“This will further accelerate our business expansion and the auto industry’s transition in Guangdong,” Xpeng said in a statement.
Why It Matters: It is noteworthy that Xpeng is headquartered in Guangzhou, the capital of the Guangdong province.
In January this year, Xpeng said it had secured a line of credit from five domestic commercial banks in China that gave it access to RMB 12.8 billion or nearly $1.98 billion.
Previously, in September last year, the company had received $587 million in a funding commitment from a local government entity for setting up a manufacturing facility in Guangzhou.
Xpeng sold 2,223 cars in February, a 63% decline from its record January numbers when it had delivered 6,015 units. Tesla Inc’s TSLA Model 3 and Model Y were among the top vehicles by sales in China in February, according to data released by China Passenger Car Association.
Price Action: Xpeng shares closed nearly 0.9% higher at $35.15 on Friday and gained 0.46% in the after-hours session.
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Photo by Jengtingchen on Wikimedia
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