NEW YORK -- China's Xpeng Motors announced it has raised $400 million from investors including smartphone heavyweight Xiaomi as the electric vehicle startup looks to integrate more smart technology into its vehicles.
The Alibaba Group Holding-backed startup said it will work more closely with Xiaomi to build a smart mobility ecosystem.
"Xiaomi's experience and insight in consumer behavior, technology know-how and market trends can add tremendous value to what Xpeng Motors is set to achieve," the startup's namesake CEO and chairman He Xiaopeng said in a statement on Wednesday.
"We are committed to investing in the development of core in-house technologies, smart manufacturing, and sales and service capabilities," He, who is also a personal friend of Xiaomi co-founder and CEO Lei Jun, added.
The recent investment reportedly takes the startup's valuation to nearly $4 billion, though the company declined to confirm this figure.
The Guangzhou-based startup, which rolled out its 10,000th G3 model this summer, has already been working with Xiaomi to connect smart devices to cars. At a product launch event in September, Xiaomi showcased its Mi 9 Pro 5G phone, which can be used to unlock a Xpeng car.
In an October report, Xpeng said that over 93% of its customers opted into its autonomous driving assistant feature.
The new funding for Xpeng comes as competition in the Chinese EV market grows increasingly cutthroat. Government subsidies for the sector are on their way out, and auto sales in China continue to decline.
Pressure from rivals will likely mount, too, as Tesla stands poised to compete for a larger market share in China. The California-based company showcased the first sedans produced at its Shanghai Gigafactory this week.
A Xpeng spokesperson on Tuesday said the company is "monitoring market conditions closely" for a future initial public offering, though there is no specific timetable.
"Our current focus is on building core businesses," the spokesperson said.
The $400 million raised, combined with billions of yuan-denominated unsecured credit lines Xpeng said it has secured from banks, will help Xpeng avoid public investors' scrutiny for some time.
Fellow Chinese EV startup NIO, which went public on the New York Stock Exchange last fall, is now trading nearly 70% below its initial public offering price following a costly recall of nearly 5,000 vehicles and an exodus of high-level executives this year.