Chinese electric vehicle maker XPeng, Inc. XPEV has signed an agreement that would secure additional funding for the company to fuel growth.
What Happened: XPeng agreed with the Agricultural Bank of China, a state-owned bank, for a comprehensive credit line of up to 7.5 billion yuan ($1.14 billion), a statement from the company said. The agreed-upon financing, which will be provided by the Guangdong branch of the bank, will be used for supporting business operations and expansion in China.
"We are very pleased with the Agreement, with terms demonstrating the financial institution's strong trust in our solid business fundamentals and growth prospects." said He Xiaopeng, Chairman and CEO of XPeng.
"As we pursue rapid technology and product iterations, we will continue to strengthen our product competitiveness and bring compelling EV experience to our consumers," Xiaopeng added.
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Why It's Important: Guangzhou-based XPeng weathered the COVID pandemic fairly well and sold 98,155 EVs in 2021, up 263% year-over-year. The company launched a refreshed version of its G3 SUV and a new family sedan, called the P5, in 2021. Late last year, the company unveiled its fourth production model, named the G9, which will likely be made available in the third quarter of 2022.
Additionally, the company is working on improving its advanced driver assistance system technology. XPeng also announced plans to expand capacity at its existing plant in Zhaoqing and set up a new factory in Wuhan.
This comes as the company faces the challenges of input cost inflation and component shortages triggered by the Russia-Ukraine crisis and the COVID lockdowns in China, which have negatively impacted EV makers across the board.
At the end of 2021, XPeng boasted a cash balance of $6.83 billion.
Related Link: XPeng Begins Taking Reservations For Mass Market P5 Sedan In 4 European Nations
XPeng said the credit facilities extended by the Agricultural Bank of China will further diversify its funding channels, and help optimize the efficiencies in cash management, cost control and more corporate initiatives.
On Wednesday, XPeng shares were rallying 9.03% to $24.76, according to BenzingaPro data
Image: Courtesy of heyxpeng.com
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