Xiaopeng Motors, the Chinese car start-up that is backed by Alibaba Group Holding and Foxconn Technology Group, plans to raise more than 10 billion yuan (S$2 billion) this year in a bid to take on rivals in the world's biggest market for electric vehicles.
The company plans to start pre-sales of its first model, the G3 crossover, by the end of this month, founder He Xiaopeng said in an interview at the Boao Forum in China. He did not elaborate on the fund-raising plans.
Xiaopeng is among start-ups striving to become China's Tesla and reshape the car industry as the Asian country promotes new-energy vehicles in an effort to clean up the environment and cut its reliance on oil imports.
Already the biggest EV market, China accounted for more than half of worldwide sales last year. Sales of all vehicles grew at a monthly clip of more than 20 per cent in 2016 and last year, according to data from the China Passenger Car Association.
Alibaba and Foxconn led a round of fund-raising by Xiaopeng, investing 2.2 billion yuan, the carmaker said in January. That put the total investment as of end-January at 5 billion yuan, according to the company.
The investment marked Alibaba's latest move in the automotive industry as the Internet giant bets connected cars will generate new revenue. The Hangzhou-based group has developed its own car operating system.
NIO, another Chinese electric-car start-up, was raising more than US$1 billion (S$1.3 billion) in a new round of financing from investors led by Tencent Holdings, according to people with direct knowledge of the matter in November. Companies investing in that round included Baillie Gifford & Co, the second-biggest institutional investor in Tesla, Lone Pine Capital, Citic Capital Holdings and China Asset Management, one person said.
He said the company will collaborate with Alibaba in maps and cloud products in a non-exclusive alliance, adding the company's focus is on ensuring quality of production ramp-up.
Capacity will reach "tens of thousands" of units next year, he said, without giving current figures.
Xiaopeng supports China's plan to allow foreign automakers greater ownership in joint ventures as this will spur real competition and ensure the quality of cars made in China, he said.
Separately, Chinese President Xi Jinping reiterated on Tuesday that the nation will lower restrictions on foreign ownership in the auto sector and measures should be implemented as soon as possible. China will also reduce import tariffs on vehicles, Mr Xi said in a speech at the Boao Forum.