China EV maker Hozon completes Series D with $443m tranche

It is described as the third tranche of a Series D round. According to AVCJ Research, the second tranche closed in February on CNY 2bn at a valuation of USD 7bn. Investors included Shenzhen Capital and a fund controlled by CRRC Corporation, a leading manufacturer of locomotives and rolling stock.

The first tranche of CNY 4bn closed in October 2021. Security software provider Qihoo 360 Technology took the lead, contributing CNY 2bn, with support from CCB International, CITIC Securities, GF Venture Capital, and an energy fund under securities broker Shenwan Hongyuan.

It is unclear how much Qihoo 360 ended up investing. Two new investors participating in the latest tranche took a 3.5% stake that was originally allocated to Qihoo 360 but never actioned.

Hozon claims the three tranches of the Series D amount to more than CNY 10bn. The proceeds will be used for product R&D, technological innovation, and factory expansion.

In the first half of this year, the company delivered 63,131 vehicles, a year-on-year increase of 199%. This places it second among the “new forces” of China's EV market, which also include Nio, Xpeng, WM Motor Technology, and Lixiang Automotive. All four have received substantial private funding and three - Nio, Xpeng, and Lixiang - went public.

Hozon was founded in 2014 by Beijing Sinohytec, a hydrogen energy business, and a research institute under Tsinghua University. Its first concept car was announced in 2017. An autonomous vehicle research centre opened in Silicon Valley in 2018 followed by a design centre in Beijing in 2019.

The company has produced more than 160,000 vehicles to date. Deliveries of its latest model, the Hozon S, are expected to begin in the fourth quarter of this year.

Hozon positions its cars as mass-market affordable. Three models, launched between 2018 and 2020, are currently in mass production: Nezha N01, Nezha U, and Nezha V. As of September 2021, total deliveries amounted to 67,730 units. More than two-thirds of those were delivered in the first nine months of 2021, with 7,700 units delivered in September alone.

Promoting EVs is part of China's broader efforts to reduce carbon emissions. In October 2020, the State Council approved a 15-year development plan for new energy vehicles. It wants to reduce automotive-related carbon emissions by 20% from the peak level by 2035 and have NEVs account for half of all new vehicle sales.

Other recent funding rounds in the space include a CNY 500m pre-Series A for Eezi, also known as Qingcheng Shidai. It was established last year by alumni from Tencent Holdings, Huawei Technologies, Vivo, and various new force EV makers.

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• Topics
• Greater China
• Expansion
• Technology
• China
• Electric Vehicles
• automobiles
• Shenzhen Capital Group
• Dayone Capital
• Qianhai FoF