China electric carmaker Xpeng Motors is set to receive government cash for a new factory in the southern city of Guangzhou. The company recently raised new capital from its recent listing in New York.
According to a statement Monday, Xpeng Motors said it was set to receive about 4 billion yuan ($587 million) in new financing from the Guangzhou Economic and Technological Development Zone and the local government.
Around 1.3 billion yuan came from the Guangzhou government. It also agreed to provide up to 1.2 billion yuan in fixed-return investments and long-term bank loans.
The investment was to encourage the company to build its new factory in the city. Xpeng Motors said it expected the factory to open in December 2022. It will increase production capacity which is currently around 100,000 units a year. Xpeng Motors mainly builds its electric vehicles at its Zhaoqing factory in China's Guangdong province.
"With the strong support from the Guangzhou government we are confident we will execute our strategic growth initiatives and deliver the highest quality products and services to meet our customers' needs," Xpeng Motors' chief executive officer He Xiaopeng said.
Guangzhou Economic and Technological Development has agreed to lease the property to Xpeng Motors once its factory is completed. After seven years Xpeng Motors will be given the option to purchase.
Xpeng Motors' recent initial public offering in New York in August saw it raise $1.7 billion. Interest in its stock was partly a result of a rise in Tesla's share price. This reignited interest in new-energy-vehicle companies worldwide.
