Home Investing Strategy GAC’s Electric Car Unit Books $2.5 Billion Strategic Investment

GAC’s Electric Car Unit Books $2.5 Billion Strategic Investment

by WOOWinvest
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GAC’s Electric Car Unit Books $2.5 Billion Strategic Investment


What’s new: The electric car unit of Guangzhou Automobile Group Co. Ltd. (601238.SH/2238.HK) has been valued at more than $13.8 billion in a Series A funding round involving 53 strategic investors.

The funding — which totaled 18.3 billion yuan ($2.53 billion) — is thought to be the largest ever single private equity investment in the EV industry and brings Aion one step closer to an IPO, industry insiders said.

The round has cut state-owned Guangzhou Automobile Group’s shareholding in GAC Aion New Energy Automobile Co. Ltd. to 76.9% from 93.5%, according to a Thursday exchange filing.

The valuation of 103.2 billion yuan makes GAC Aion one of China’s highest valued electric-vehicle (EV) makers.

Strategic investors include firms from upstream and downstream EV industries, such as battery-makers and chipmakers, it said.

The context: The latest funding round comes as state-owned traditional carmakers are stepping up investments into new-energy vehicles (NEVs) — including pure EVs and hybrid vehicles — to challenge EV startups like XPeng Inc.

In the first three quarters, Aion sold 182,300 vehicles, making it the fifth largest Chinese NEV maker by sales. Earlier this month, it finished the construction of the second of its two plants in Guangzhou, raising its total annual capacity to over 400,000 vehicles.

Aion has reached a strategic cooperation agreement with miner Ganfeng Lithium Co. Ltd. and plans to build its own battery factory to secure supplies.

Related: Guangzhou Auto’s EV Unit Completes Ownership Overhaul

Quick Takes are condensed versions of China-related stories for fast news you can use.

Contact reporter Guo Yingzhe ([email protected]) and editor Joshua Dummer ([email protected]) and Flynn Murphy ([email protected])

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