ELECTRIC vehicle maker Xpeng Motors Technology Ltd. raised about US$500 million from a group of venture investors, showing startups with promising car models can attract funding even as the industry’s sales slump.

Investors in the Series C+ financing round include Sequoia Capital China, Hillhouse Capital, Coatue Management and Aspex, Xpeng said yesterday in a statement. The fundraising follows a US$400 million round in November.

Xpeng is increasing its chances of staying as a viable contender in the world’s largest electric car market, where it competes with sales leader Tesla Inc., local peers such as NIO Inc. and such global rivals as BMW AG and Mercedes Benz maker Daimler AG. Though industry sales have been sputtering since the government scaled back subsidies last year, the market is in its early stages.

As enthusiasm builds for more climate-friendly vehicles, shares of EV makers, including Tesla Inc. and Nio Inc., have surged in recent months and auto makers are looking to the markets for funds.

Li Auto, Xpeng’s rival, filed for a U.S. initial public offering earlier this month.

Founded in 2015, Xpeng’s backers also include e-commerce giant Alibaba Group Holding Ltd. and Xiaomi Corp.

Xpeng, led by chief executive He Xiaopeng, is making electric G3 sport utility vehicles (SUVs) and P7 sedans with autonomous driving capabilities in two Chinese plants.

The funding will enable Xpeng to further develop intelligent vehicle technologies. The company plans to have about 200 showrooms in China by the end of this year.

Xpeng has delivered 19,376 G3 SUVs as of June.

China’s sales of new energy vehicles fell for a 12th straight month in June.  (SD-Agencies)