Chinese EV startup Hozon Auto bags $306m as part of series C round

Hozon Auto, a Chinese electric vehicle (EV) startup, announced that it has raised 2 billion yuan (US$306 million) in new funding from Huading Capital as part of its series C funding round.

It’s expected to close its latest round at more than 3 billion yuan (US$459 million), according to a statement. Huading Capital is an EV-focused VC firm that has nearly 50 billion yuan in assets under management.

Photo credit: Hozon Auto

Founded in 2014, Hozon Auto currently has three models of EV vehicles, including Nezha N01, Nezha U, and Nezha V, and claims to have sold 30,000 cars in total.

In July, the EV startup announced its plan to go public next year in the Star Market, the Shanghai Stock Exchange’s Nasdaq-like equities market officially known as the Shanghai Stock Exchange Science and Technology Innovation Board.

In China, Hozon competes with US-listed EV giant Nio. Two other local players – Xpeng and Li Auto – also went public in the US this year and raised US$1.5 billion and US$1.1 billion, respectively.

Prior to the latest investment, Hozon Auto secured over 1.2 billion yuan in a series A round from Zhihe Chuxing Technology in 2017 and 3 billion yuan in series B money last year, with government and industrial funds leading the round.

According to a report by McKinsey & Company, China’s EV market took up 51% of global EV sales and was about 3x the size of the European and US markets each in 2018. Statista data also predicts China to have annual sales of 7.8 million units of new energy passenger vehicles in 2025.

In the first half of this year, it was reported that US-based EV company Tesla occupied 21% of the Chinese EV market.

Currency converted from Chinese yuan to US dollar: US$1 = 6.53 yuan.