Xpeng CEO Hy Xiaopeng is standing next to the company’s P7 electric sedan while addressing media during the 2020 Beijing Motor Show.
Evelyn Cheng | CNBC
In July 2020, local branches for four of the ‘five big’ banks issued 10.4 billion yuan in lending to Nio for the China-based business established in the city of Hefei near Shanghai. According to an announcement from Nio, China Construction Bank, Industrial and Commercial Bank of China, Bank of China and Agricultural Bank of China participated.
In China’s state – owned system, the banks prefer to lend to state – owned enterprises. This makes it difficult for private companies to obtain financing unless they can convince the state-owned banks of their ability to repay loans.
Xpeng’s credit line announcement comes after the company raised more than $ 4 billion last year in its initial public offering on the New York Stock Exchange in August and a follow-up offer in December.
Shares have risen more than 195% since the IPO.
Where does the money go?
The startup did not disclose details on credit terms on Tuesday. The agreement will help the Guangzhou company expand its production, sales and services and other operations, according to a statement.
Xpeng said it began construction of a second factory in November. The company said it had opened 116 store windows and 50 service centers as of Sept. 30. And Xpeng revealed in September that it was investing in the development of flying vehicles.
Deliveries amounted to 27,041 last year, with more than half of a new P7 sedan starting mass deliveries at the end of June. The company added that it delivered 100 units of its G3 SUV to customers in Norway in December.
Although overall deliveries have more than doubled than a year ago, Xpeng’s figures have fallen short of Nio’s more than 43,700 deliveries. Nio’s vehicles targeted the higher end of the market, while Xpeng’s price range was lower.
In the past two weeks, both companies have announced plans for new sedans. Nios are expected to arrive in the first quarter of next year. Xpeng claims its sedan will start deliveries later this year.