The establishment of Chinese electric cars Xpeng receives a loan of 2 billion dollars

In July 2020, local branches of four of the “big five” banks granted 10.4 billion yuan of Nio credit for the Chinese operations of the Hefei start-up near Shanghai. Participants in this agreement included China Construction Bank, Industrial and Commercial Bank of China, Bank of China and Agricultural Bank of China, according to an announcement from Nio.

In China’s state-dominated system, banks prefer to lend to state-owned enterprises. This makes it difficult to obtain financing for private companies, unless they can convince state-owned banks of their ability to repay loans.

Xpeng’s line of credit announcement comes after the company raised more than $ 4 billion last year in its initial public offering on the New York Stock Exchange in August and a continuous offer in December.

Shares increased by more than 195% since the IPO.

The start-up did not disclose details about credit conditions on Tuesday. The agreement will help the Guangzhou-based company expand its production, sales and services and other operations, according to a statement.

Xpeng said it began building a second plant in November. The company said it has opened 116 retail windows and 50 service centers since September 30. And Xpeng revealed in September that it is investing in the development of flying vehicles.

Deliveries totaled 27,041 last year, more than half coming from a new P7 sedan that began mass deliveries in late June. The company added that it delivered 100 units of its G3 SUV to customers in Norway in December.

Although global deliveries have doubled from a year ago, Xpeng’s figures have not exceeded Nio’s more than 43,700 deliveries. Nio vehicles targeted the upper end of the market, while the Xpeng price range was lower.

In the last two weeks, both companies have announced plans for new sedans. Nio’s is expected to arrive in the first quarter of next year. Xpeng claims that its sedan will start deliveries later this year.