China electric vehicle startup WM Motor Technology Group has completed its latest funding round which generated about 10 billion yuan ($1.5 billion) in fresh capital.

The funding was led by a Shanghai state-owned investor group that included state-owned motor-vehicle company SAIC Motor. WM Motor said existing investors such as Baidu and Susquehanna International Group increased their stakes in the latest round.

Other companies that participated included state-owned investment companies from Hubei, Hunan, Anhui and Jiangsu. Strategic investors included State Development & Investment Corp., Yangtze River Industry Fund, Sino IC Leasing, Guangzhou Finance Holdings Group, Yingke Capital, Tsinghua Unigroup and Hongta Security.

"The completion of the D round of financing reflects investor optimism about the prospects of the smart new energy vehicle industry as well as their recognition of WM Motor's long term development strategy, outstanding core team and industry-leading, cutting-edge technology," the company's founder and chief executive officer Freeman Shen said in a statement.

WM Motor said it would use the proceeds to expand its production and sales. Most of the money will be spent on research and development which includes new technology.

WM Motor, which made its first production electric vehicle, the Weltmeister EX5, in 2018, has ridden a wave of new investor enthusiasm in electric motor-vehicle company shares. This has seen an influx of new capital for China electric carmakers such as Xpeng Motor, Li Auto and NIO through funding rounds and public listings.

The companies, all directly competing with Tesla in their home market, have started to build up cash reserves to expand production and improve their products. Earlier in September China Evergrande's electric vehicle unit China Evergrande New Energy Vehicle Group announced plans to list on Shanghai's Star Market to raise new capital.