China EV brand Aion raises $2.5b
GAC Aion, an electric vehicle (EV) brand under GAC Group, a Chinese state-owned automotive manufacturer, has raised CNY 18.3bn (USD 2.5bn) in Series A funding at a valuation of CNY 103.2bn from 53 so-called strategic investors.
It has been described as the largest funding round raised by a Chinese EV maker in recent years. Moreover, Aion now claims to be the only unlisted company in the space worth over CNY 100bn.
The round is dominated by large renminbi-denominated investors, including People’s Insurance Company of China and China Southern Power Grid. China Structural Reform Fund, CITIC Securities-owned Goldstone Investment, Shenzhen Capital Group, Yingke PE, and several government guidance funds are also involved.
GAC Group's stake in the EV unit will fall to 76.9% from 93.5%, with the new shareholders taking a 17.7% interest.
The proceeds will be mainly used for product development and R&D into next-generation batteries, EVs, and core technologies such as autonomous driving, smart cockpits, and green energy. Capital will also go into production capacity expansion, while the new investors will help consolidate Aion’s upstream supply chain across batteries and automotive chips.
Founded in 2017 as GAC New Energy, the company was rebranded as Aion in 2020. It was spun out as an independent entity at the same time.
In 2021, sales reached 120,000 units. For the first nine months of 2022, 182,300 vehicles were sold, representing a 132% year-on-year increase. Aion now ranks fifth for EV sales in China after BYD, SAIC-GM-Wuling, Tesla, and Geely Auto, according to the China Passenger Car Association. Aion is targeting sales of 300,000 units this year.
Qinghong Zeng, chairman of GAC Group, previously told local media that Aion would seek an IPO in 2023.
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