XPeng Gets Cash From a Chinese Government Fund

Text size

XPeng has a showroom at the Chamtime Plaza in Shanghai.

Qilai Shen/Bloomberg

Electric vehicle maker


took in new money from a local Chinese government. It was a small investment so investors are excited about the news—in a small way.

XPeng (ticker: XPEV) shares were up more than 4% in midday trading Tuesday. The

S&P 500,

by comparison, was up about 0.1%.


(TSLA), which accounts for roughly 70% to 80% of the total market value of EV companies worldwide, was down about 1.2%.

The Chinese EV maker is getting the cash from the Guangdong provincial government’s investment fund, which focuses on emerging areas such as energy vehicles. The fund is putting in 500 million Yuan, or about $77 million, into an XPeng subsidiary.

The money is likely for growth. XPeng is expected to increase sales by more than 140% in 2021. Currently, XPeng has two factories, both in Guangdong province. One, in Zhaoqing, is producing cars. The other, in Guangzhou, is under construction.

XPeng shares have been on a wild ride. Shares are down 50% from their 52-week high of more than $74. But the stock is also up 37% from recent lows.

The swings can be pinned on investors, who have been digesting a lot of news, including weaker-than-expected February deliveries, higher interest rates and competitive announcements from car makers such as



The company says February deliveries were affected by the Lunar New Year holiday. XPeng, or any other auto company, can’t control interest rates. Higher rates hurt high-growth stocks more than others. For starters, higher rates make it more costly to finance growth. And Volkswagen, for example, just announced updated, aggressive EV goals. The German car company wants to be selling far more EVs around the globe that it previously projected.

Over the past few weeks, all the news has made it tough to predict whether XPeng would go up or down. Difficulty predicting the stock will continue for the short term, too—at least until first-quarter numbers are released in a month or two.

Write to Al Root at [email protected]

What's your reaction?

In Love
Not Sure

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *

More in:News