Xpeng looks to generate $300 million in funding before U.S. IPO

Xpeng Motors is looking to rally around $300 million in funding prior to its United States’ initial public offering (IPO), sources said.

Of the companies and investors who are looking to get involved in the funding round, one of the most notable is the Qatar Investment Authority (QIA), which is the country’s sovereign wealth fund.

According to French media outlet Nouve L’obs, the QIA currently holds about a 17% stake in Volkswagen Auto Group, Porsche, and mining company Glencore, which holds a cobalt deal with Tesla for the Giga Shanghai and Giga Berlin production plants.

Xpeng is looking to raise $300 million. However, CNBC reported that the final number the Chinese automaker raises could be higher than that as some investors are still discussing the possibility of putting money into the company. The sources wished to remain anonymous, and Xpeng declined to provide a comment on the matter.

The company’s latest round of investments is apart of the same $500 million funding round it raised earlier in July. Firms such as Hong Kong-based Aspex, New York-located Coatue, Beijing’s Hillhouse Capital, and Sequoia Capital China took part in the fundraising round.

Xpeng also raised $400 million in November, led by Xiaomi, a Chinese smartphone manufacturer.

The company has officially filed for an IPO in the United States in a confidential manner, but it has not decided which exchange it will list on yet, the sources said to CNBC.

Xpeng has decided to enter the U.S. market at an interesting time. Not only did the U.S. Senate pass legislation that would increase the scrutiny of Chinese-based companies that trade on Wall Street, but Xpeng also has an ongoing lawsuit with California’s Tesla, which is the outright leader in electric vehicle technology and development.

California Democratic Representative Brad Sherman spoke on the Chinese stock market restrictions. “As we continue to experience the economic fallout and volatility caused by the COVID-19 pandemic, the need to protect main street investors is all the more important,” he said. “For too long, Chinese companies have disregarded U.S. reporting standards, misleading our investors.”

Additionally, Tesla opened a lawsuit against Xpeng earlier this year, accusing the company of stealing Autopilot’s source code. Tesla alleges that a former employee downloaded Tesla’s Autopilot source code to his personal computer and transferring it to Apple Airdrop before selling it to Xpeng for financial gain.

Despite the two ongoing issues, Xpeng plans to begin offering an IPO for potential investors shortly. The company also is delivering its P7 sedan in China, which will directly compete with the Tesla Model 3, which has been highly popular in the country since it started deliveries in January.

If Xpeng does go public on Wall Street, it will be the third Chinese electric car company to offer trading in the United States. Currently, NIO and Li Auto are active in the U.S. stock market.

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