Taiwan’s Hon Hai Precision Industry Co (鴻海精密) and China’s leading e-commerce operator, Alibaba Group Holding Ltd (阿里巴巴), are injecting funds into a Chinese electric car maker, the Wall Street Journal (WSJ) reported.
In a report on Sunday, the newspaper said that Hon Hai, also known as Foxconn Technology Group (富士康) internationally, and Alibaba are participating in a 2.2 billion yuan (US$348 million) funding round initiated by Xiaopeng Motor (小鵬汽車).
Beijing-headquartered venture capital firm IDG Capital has also taken a stake in Xiaopeng Motor’s latest fundraising gambit, the report said.
The proceeds are to be used by the Chinese electric car maker to support research and development and production costs, the report said.
Two other Chinese Internet giants — Baidu Inc (百度) and Tencent Holding Co (騰訊) — participated in a separate 2.5 billion yuan funding round previously launched by Xiaopeng Motor.
The Guangzhou-based company has set up design, R&D, production and marketing bases in Beijing, Guangdong Province’s Zhaoqing and Silicon Valley in California, the car maker’s Web site showed.
More than 700 people currently work at the company, but the number is to grow to 3,000 next year, the Web site said.
While the report did not disclose the size of Hon Hai’s investment, analysts said the move reflected the company’s ambitions to extend its reach to the electric car business with an eye toward diversifying its product mix.
Hon Hai, a major iPhone assembler, has taken several steps to become less reliant on its core contract manufacturing business by investing in hardware production and software development.
Hon Hai chairman Terry Gou (郭台銘) last month said in an interview that his group was supplying components to US-based electric car maker Tesla Inc.
The company in March last year also invested NT$1 billion (US$34.3 million) in Fujian-based electric car battery maker Contemporary Amperex Technology Ltd (時代新能源科技) through a subsidiary in China.
Hon Hai has also signed an agreement with Tencent and China Harmony Auto Holding Ltd (中國和諧汽車控股) to form a joint venture to develop “smart” cars and Internet-related businesses.
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