Hozon New Energy Automobile has raised more than RMB 2 billion ($316 million) in a recent round as part of its Series D, which could value the electric vehicle startup at around RMB 25 billion, Chinese media outlet LatePost reported Monday.

Why it matters: The investment reflects continued positive sentiment among private investors towards Chinese EV companies. China’s EV industry enjoyed exponential growth in 2021 and the outlook for the industry remains strong for the next few years. 

Details: This latest round marks the close of Hozon’s Series D at RMB 8 billion. Investors include Chinese rail company CRRC Corp’s investment fund and the state-run Shenzhen Capital Group, LatePost reported, citing unnamed sources familiar with the matter.

  • The Zhejiang-based EV maker recently kicked off a new fundraising process, targeting a RMB 45 billion valuation, with plans to go public in Hong Kong later this year, according to the report.
  • Big name investors also expressed interest during the round but did not make an offer, the report said. These include SoftBank’s Vision Fund, Abu Dhabi Investment Authority, and the United Arab Emirates’ sovereign wealth fund, among others. Some of these investors reportedly worried about Hozon’s ability to compete with other more established rivals in the entry-level EV segment (usually priced under RMB 100,000). 
  • Some investors also see Hozon’s sales in the ride-hailing market as a worrying sign of its ability to attract buyers in the private EV market. About 9% of Hozon’s vehicle sales go to business clients, such as taxi fleets, according to chief executive Zhang Yong.
  • Hozon was not available for comment.

Context: In October, Hozon announced it had closed an RMB 4 billion Series D1 led by China’s biggest cybersecurity firm, Qihoo 360. This was followed by another RMB 2 billion in new funding from companies, including battery giant CATL and automaker BAIC as part of its Series D in December, said LatePost.

  • The automaker currently offers three entry-level EV models for sale and delivered 69,674 vehicles in 2021, a more than threefold yearly increase and the most in terms of delivery, after US-listed trio Xpeng, Li Auto, and Nio. 
  • Hozon has chosen banks like Citic Securities Co. and China International Capital Corp. to arrange its Hong Kong IPO, which could raise as much as $1 billion, Bloomberg reported last week. The company, along with rivals WM Motor and Leapmotor, had a combined market share of 6% in the Chinese all-electric EV segment last year, according to Bloomberg Intelligence.

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Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @yushan_shen