Xpeng Motors latest electric car is called the P7.
Chinese electric car maker Xpeng Motors has raised $400 million ahead of an initial public offering (IPO) in the U.S., two sources familiar with the matter told CNBC.
The Tesla rival was in talks to raise $300 million, CNBC previously reported, but an additional investor has come on board, bringing the total to $400 million. This current sum of money is as add-on to $500 million the company raised last month.
In addition to existing investors Alibaba and sovereign wealth fund Qatar Investment Authority, Abu Dhabi’s sovereign wealth fund Mubadala has also jumped on board as part of the $400 million tranche, the two sources said.
Mubadala was not immediately available for comment when contacted by CNBC.
The current funding round is close to completion, the sources said.
Xpeng’s is raising capital ahead of an IPO in the U.S. It has confidentially filed for a listing on Wall Street, but has not decided what exchange to list on, sources previously said.
The company’s IPO would follow other Chinese electric carmakers — Nio and Li Auto — which have already listed in the U.S. and whose share prices have risen sharply recently. Nio‘s stock is up 239% this year while Li Auto, which listed last week, has seen its shares rise 45% since its debut. Meanwhile, Tesla is over 237% higher year-to-date.
But Xpeng’s upcoming listing also comes at time of rising tensions between the U.S. and China which could impact foreign firms trading on Wall Street. In May, the U.S. Senate passed legislation that would increase scrutiny on Chinese firms trading on American exchanges and carries the threat of delistings for some foreign firms.
China has spawned lots of electric car makers, thanks to favorable policies such as state subsidies. While some have collapsed, a handful including Xpeng, Nio and Li Auto, are pushing forward to get a slice of the world’s largest electric car market.
Last month, Xpeng Motors started deliveries of its new P7 sedan — which is seen as a competitor to Tesla’s Model 3. In January, Tesla began rolling out Model 3 cars made in its Shanghai factory to customers in China.
However, the coronavirus outbreak has hit China’s electric vehicle sector.
Sales of so-called new energy vehicles fell 33.1% year-on-year in June, according to data from the China Association of Automobile Manufacturers. But on a month-to-month basis, sales have been rising as the Chinese economy shows signs of rebounding.