Xpeng Motors latest electric car is called the P7.
Xpeng Motors, one of Tesla‘s rivals in China, is in talks to raise around $300 million in funding ahead of an initial public offering (IPO) in the U.S., two sources familiar with the matter told CNBC.
Qatar’s sovereign wealth fund, the Qatar Investment Authority, is one of the investors in the funding round, the sources said.
The final amount raised might be higher than $300 million as a number of investors are still in discussions to put money into Xpeng, the sources, who wanted to remain anonymous because the discussions are private, added.
Xpeng Motors declined to comment. The Qatar Investment Authority was not immediately available for comment when contacted by CNBC.
The electric carmaker’s latest cash injection is part of the same $500 million round of funding it raised earlier this month from investors including Aspex, Coatue, Hillhouse Capital and Sequoia Capital China. And it follows a $400 million investment in November from investors that included Chinese smartphone maker Xiaomi.
Xpeng Motors has also confidentially filed for an IPO in the U.S., but has not decided which exchange to list on yet, the sources told CNBC.
The potential listing in the U.S. comes amid rising tensions between America and China which could impact foreign firms listed on Wall Street. In May, the U.S. Senate passed legislation that would increase scrutiny on Chinese firms trading on American exchanges which carries the threat of delistings for some foreign firms.
China has spawned a number of electric car companies thanks to favorable policies for the sector including subsidies. While some have collapsed, others such as Xpeng, are looking to push forward and grow.
This month, the car start-up 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.
China’s electric vehicle sector has been hurt by the coronavirus outbreak. 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. However, sales have been rising month-on-month as the Chinese economy shows signs of rebounding.
Earlier this year, the Chinese government unveiled policies it hoped will boost demand for electric cars. Some new energy vehicle subsidies and tax break policies that had been set to expire this year were extended to 2022. And nationwide charging infrastructure got a 2.7 billion yuan ($387 million) investment.
If Xpeng does go public in the U.S., it will join fellow Chinese electric carmaker NIO, which listed in September 2018. And on Thursday, Li Auto, another Chinese electric automaker started trading on the Nasdaq, raising $1.1 billion.