China's high-end ride hailing company UCAR Technology Inc has led a 2.2 billion yuan investment in the fledging electric carmaker Xpeng Motors, the two announced on Monday.
The investment is the first UCAR has made since the car service provider set up a private equity fund of 10 billion yuan to invest in "synergy and forward-looking" projects.
Xpeng Motors plans to mass produce its first model, an all-electric SUV, by the year end. The three-year-old company released the prototype in last September.
The move comes as Chinese internet companies eye car business with a fresh interest, with ambitious players ranging from video streaming platform LeEco to search engine giant Baidu.
The investment will give UCAR a foothold in the upper industrial chain, and Xpeng Motors a head start in the competition, analysts said.
Originated as an affiliate of China's largest car-rental company Car Inc, UCAR is different from its asset-light rival Didi by owning cars and employing full-time drivers, targeting the country's luxury end of ride hailing businesses.
The company has been looking to extend in the auto industry chain with a second-hand car trading platform and a car financing platform. UCAR listed in the New Third Board, the national over-the-counter equity market for small and medium-sized enterprises, last year.
The new fund is set up to invest in after-sales auto services, new energy cars, and smart driving technologies including internet of cars, advanced car operation system and autonomous driving, Li Hui, head of the fund, said.
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