Chinese Startup Xpeng Motors Could Become Largest EV Producer
【Summary】Xpeng Motors, an EV startup with financial backing from Alibaba Group Holding, Foxconn Technology Group and Xiaomi, could be the company that will lead China's EV sector in the future.
With more than 487 EV businesses in China (according to data from Bloomberg), the local automotive sector is starting to get increasingly crowded and competitive. In order to stay on top, startups in the country now have to offer something unique and enticing.
Xpeng Motors, a China-based EV startup with financial backing from Alibaba Group Holding, Foxconn Technology Group and Xiaomi, could be the company that will lead the local EV sector in the future. Led by He Xiaopeng and with over $700 million in funding recently acquired, the startup is already well established in China's EV industry.
"Tesla has shown building a car company is a cash-burning operation," explained Bloomberg New Energy Finance analyst Nannan Kou. "Only those startups with the most capital from big backers will fend off the intense competition."
Plans for EV Domination
Xpeng currently employs 1,800 individuals at its company. Its first EV, called David 1.0, was an electrified EV that was never open for public purchase. The startup used the vehicles as incentives for employees willing to provide detailed reports and feedback about the unit.
Earlier this year, at CES 2018, Xpeng previewed the G3 – a cutting-edge car with autonomous parking features. So far, over 4,000 individuals have pre-ordered the vehicle. Without a dedicated manufacturing plant, the startup currently contracts production to Zhengzhou-based Haima Automobile Group.
"Like the iPhone, cars will be another connected platform to sell music, mapping and services, and collect driver data," said Jixun Foo, a Shanghai-based managing partner for GGV Capital and an Xpeng investor.
Xiaopeng draws inspiration for its EVs from Tesla. Designs for the startup's interior and instrument clusters mildly resemble the Tesla Model S and Model X. Such comparisons are common in the EV sector, as Tesla has released numerous open-source patents that are currently being used by EV companies.
Attracting Major Investors
As mentioned earlier, Xpeng has attracted a handful of prolific investors and tech giants. From a valuation perspective, analysts have pegged Xpeng to be worth more than $1 billion.
The business has close ties with Alibaba, which took part in the company's Series B and Series C financing rounds, participating in both events as a lead investor. Interestingly, Xiaopeng previously worked in Alibaba and even sold the company his web browser (UCWeb). Upon resigning from the tech brand in 2017, Alibaba became the second largest shareholder of the startup.
Taipei-based Foxconn is widely known for holding electronics manufacturing contracts with Apple, Blackberry, Amazon, Nintendo, Xiaomi and Sony. The manufacturer is operating in Japan, Brazil and the US (just to name a few). Foxconn is a very notable investor, as the company has extensive experience in scaling production on a global level.
Lastly, Xiaomi, a smartphone and consumer electronics company based in Beijing, has been making headlines in the past few years, due to rapid growth and its successful ‘lean' operating strategy. The business has a reputation for appealing to the young generation of consumers, which (unsurprisingly) is also the target market for Xpeng's EVs.
Michael Cheng is a legal editor and technical writer with publications for Blackberry ISHN Magazine Houzz and Payment Week. He specializes in technology business and digesting hard data. Outside of work Michael likes to train for marathons spend time with his daughter and explore new places.
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