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Chinese Tesla rival Xpeng Motors is receiving a $ 76 million investment from the government

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He Xiaopeng, CEO of Xpeng, stands next to the company’s P7 electric sedan speaking to the media at the 2020 Beijing Auto Show.

Evelyn Cheng | CNBC

GUANGZHOU, China – Electric car maker Xpeng Motors has received a new round of investment from the government of southern China’s Guangdong Province.

The 500 million yuan ($ 76.9 million) from Guangdong Yuecai Investment Holdings Co., the provincial investment arm, will be used to “accelerate the company’s business expansion,” Xpeng said in a statement.

Xpeng is headquartered in Guangzhou, the capital of Guangdong Province. The region has placed a focus on new energy vehicles and autonomous driving. Warren Buffett-backed electric car maker BYD is based in Shenzhen, the technology powerhouse in Guangdong. Autonomous start-ups such as Pony.ai, WeRide and AutoX are based in the province.

The investment will help accelerate the “strategic transition of Guangdong’s automotive industry,” Xpeng said in a press release.

Since going public in the US in August for $ 1.5 billion, Xpeng has continued to raise funds to fuel its growth, boost production, and fight domestic rivals as well as Tesla. In September, Xpeng received 4 billion yuan in funding from an arm of the Guangzhou government. In January, the company secured a 12.8 billion yuan line of credit from major state banks.

The company has focused on building its manufacturing base with two wholly owned factories – one in Zhaoqing and another currently under construction in Guangzhou.

After a sharp rise in 2020, Xpeng shares are under pressure this year and have fallen by around 18% since the start of the year.

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Katherine Clark