Chinese smart electric vehicle (EV) builder Xpeng has taken a first step towards producing battery packs on its own after setting up a RMB 5 billion ($717.5 million) subsidiary to be overseen by its co-founder and president Henry Xia, reports the South China Morning Post.
The subsidiary, known as Guangzhou Pengbo Automotive Technology, will manufacture and sell EV batteries and is wholly-owned by Xpeng, one of the mainland’s top three home-grown smart EV assemblers, according to business and trademark registration tracking firm Tianyancha.
“Batteries remain a primary concern for EV start-ups like Xpeng because a potential supply-chain constraint could prevent them from churning out enough vehicles for delivery,” said Qian Kang, a Zhejiang-based entrepreneur who owns car component businesses. “[Amid rising demand for EVs] it is advisable for them to strengthen their own battery manufacturing capabilities to ensure sufficient supply of the key component.”