Chinese electric car start-up Xpeng gets $2 billion in credit from state-owned banks

Xpeng CEO He Xiaopeng stands subsequent to the corporate’s P7 electric sedan as he addresses media on the 2020 Beijing auto present.

Evelyn Cheng | CNBC

In July 2020, native branches for 4 of the “big five” banks prolonged 10.4 billion yuan in credit to Nio for the start-up’s China operations based mostly in the town of Hefei close to Shanghai. Participants in this deal included China Construction Bank, Industrial and Commercial Bank of China, Bank of China and Agricultural Bank of China, in keeping with an announcement from Nio.

In China’s state-dominated system, the banks favor to lend to state-owned enterprises. That makes it tough for privately owned corporations to get financing, until they’ll persuade the state-owned banks of their potential to repay loans.

Xpeng’s credit line announcement comes after the corporate raised greater than $4 billion final yr in its preliminary public providing on the New York Stock Exchange in August and a follow-on providing in December.

Shares have soared greater than 195% for the reason that IPO.

Where is the cash going?

The start-up didn’t disclose particulars on credit phrases Tuesday. The settlement will assist the Guangzhou-based firm broaden its manufacturing, gross sales and companies and different operations, in keeping with a launch.

Xpeng mentioned it started constructing a second manufacturing unit in November. The firm mentioned it has opened 116 retail storefronts and 50 service facilities, as of Sept. 30. And Xpeng revealed in September it’s investing in the event of flying automobiles.

Deliveries totaled 27,041 final yr, with greater than half coming from a brand new P7 sedan that started mass deliveries in late June. The firm added it delivered 100 models of its G3 SUV to prospects in Norway in December.

Although total deliveries greater than doubled from a yr in the past, Xpeng’s figures fell wanting Nio’s greater than 43,700 deliveries. Nio’s automobiles have focused the upper finish of the market, whereas Xpeng’s worth vary has been decrease.

In the final two weeks, each corporations introduced plans for brand new sedans. Nio’s is predicted to reach in the primary quarter of subsequent yr. Xpeng claims its sedan will start deliveries later this yr.

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