Guangzhou GET Investment, which is wholly owned by Guangzhou Economic and Technological Development Zone, has agreed to invest 4 billion yuan ($590 million) to support Chinese electric vehicle startup Xpeng’s future development, as the carmaker begins exploring business opportunities in overseas markets.

As part of the investment agreement, Guangzhou GET Investment will invest 1.3 billion yuan to build a smart manufacturing base in Guangzhou, the capital city of South China’s Guangdong province, in accordance with Xpeng’s requirements. The base will also serve as a center for research and development, and is set to go into operation by December 2022.

Once opened, Guangzhou GET Investment will lease the base to an operating subsidiary of Guangdong Xiaopeng, Xpeng’s wholly-owned subsidiary, for seven years. When the lease expires, the operating subsidiary will acquire the base from the investment firm, according to a statement released by Xpeng on Sunday.

According to the statement, 1.2 billion yuan will be given to Guangdong Xiaopeng’s operating subsidiary to purchase manufacturing equipment; 1 billion yuan will be invested in a China-based entity linked to Guangdong Xiaopeng by the end of March 2021; and the remaining 500 million yuan will be used to fuel Xpeng’s future plans for securities offerings.

The move marks a big step in Xpeng’s plans to expand its production capacity as the Guangzhou-based company announced last week the shipment of its first batch of 100 electric cars to Europe.

Beside the Guangzhou-based manufacturing base, Xpeng already runs a wholly owned plant in the city of Zhaoqing in Guangdong province, where the company’s new P7 long-range electric sports sedan is built.

Contact reporter Ding Yi (yiding@caixin.com)

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