Alibaba, Foxconn Invest in Chinese Electric-Vehicle Maker
SHANGHAI—Chinese e-commerce giant
and Foxconn Technology Group have co-led a 2.2 billion yuan ($348 million) funding round into Chinese electric-vehicle manufacturer Xiaopeng Motors, marking Alibaba’s first big investment in a car maker
Venture capital firm IDG Capital was the third lead investor in the funding, and the funds are slated for both research and production costs, Xiaopeng, also known as Xpeng, said in a release Monday.
Two other Chinese internet giants, Baidu Inc.and
Tencent Holdings Ltd.
, have led fundings of at least $2.5 billion into Chinese electric-car companies including NiO and WM Motor Technology. Beyond China, Tencent also invested $1.8 billion for a 5% stake in
Alibaba, Tencent and Baidu want to see their technology incorporated into cars as autonomous vehicles edge into the market, giving them captive audiences for online gaming, streaming video, internet shopping and social media, said Bill Russo, founder of Shanghai consultancy Automobility Ltd.
Alibaba and Foxconn executives said in the release that Xpeng gives the company the ability to tap into the intersection of the internet, artificial intelligence and traditional manufacturing, an area with a lot of promise. Foxconn, formally Hon Hai Precision Co., is based in Taiwan and is best known for manufacturing Apple Inc.’s iPhones.
Guangzhou-based Xpeng, which showcased its latest electric sport-utility vehicle at the Consumer Electronic Show in Las Vegas this month, plans to start sales of its SUV in the first half of the year. The vehicle will have a camera mounted on the roof with that allows passengers to record their journeys and post them on social media.
“In the short term, the traditional auto makers are still going to dominate and have seats at the table,” said Xiaopeng He, the auto maker’s chairman and an ex-Alibaba employee who co-funded Xpeng when the car maker was founded in 2014.
The company is targeting younger Chinese buyers who less brand conscious and looking for cars with internet connectivity, he said.
—Trefor Moss contributed to this article.
Write to Liza Lin at Liza.Lin@wsj.com