Chinese electric car startup Xpeng gets $ 2 billion loan

In July 2020, the local offices of four of the “big five” banks extended 10.4 billion yuan in credit to Nio for operations in China of the new company based in Hefei City, near Shanghai. Participants in the deal included China Construction Bank, the Industrial and Commercial Bank of China, the Bank of China and the Agricultural Bank of China, according to a Nio announcement.

In the state-dominated system of China, banks prefer to lend to state-owned enterprises. This makes it difficult for private companies to obtain financing unless they can convince state-owned banks of their ability to repay loans.

The announcement of Xpeng’s line of credit comes after last year the company raised more than $ 4 billion in its initial public offering on the New York Stock Exchange in August and a continued offering in December.

Shares have risen more than 195% since the IPO.

The start-up did not reveal details about credit conditions on Tuesday. The agreement will help the Guangzhou-based company expand its manufacturing, sales and services and other operations, according to a statement.

Xpeng said he began building a second factory in November. The company said it opened 116 storefronts and 50 service centers as of Sept. 30. And Xpeng revealed in September that it is investing in the development of flying vehicles.

Last year, deliveries were 27,041, with more than half of a new P7 sedan starting mass deliveries in late June. The company added that it delivered 100 units of its G3 SUV to customers in Norway in December.

Although global deliveries more than doubled a year ago, Xpeng’s figures were lower than Nio’s more than 43,700 deliveries. Nio’s vehicles have been geared towards the upper end of the market, while Xpeng’s price range has been lower.

In the last two weeks, both companies have announced plans for new sedans. Nio’s is expected to arrive in the first quarter of next year. Xpeng says its sedan will begin shipping later this year.