China’s BAIC aims to raise extra cash to expand its electric-car business

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As the electric auto market in China is speeding up, the local automaker BAIC plans to boost its investments by raising more money through a financing round.

Even if the electric auto market is not currently quite as developed as the Chinese government would want, the trend has been improving lately. Beijing authorities are trying to push electric vehicles upfront, as a part of a wider plan to encourage emission-free technologies in the country, and to cut the dependency on imported oil. With a green strategy in place, China also aims to become a leading region in automotive know-how. The BAIC Group is one of the largest local automakers and is controlling Beijing Electric Vehicle, a company focused on building electric cars. The brand set a target of selling as many as 700,000 units annually by 2020, a bold goal considering it delivered around 20,000 electric vehicles last year, but it expects to hit 55,000 units at the end of the 2016. To keep the trend on an upward scale, BAIC is seeking to raise about 3 billion yuan (460 million dollars) in a financing round for its electric-car business, with plans to sell shares in the unit on Shanghai’s exchange market for emerging companies, according to Bloomberg.

Beijing Electric Vehicle has attracted investments from technology companies including Le Holdings, said people familiar with the matter. The company wants to use the funds to cut debt, make investments and as working capital, according to people in the know. In 2015, the production and sales of new energy vehicles in China reached 340,471 units and 331,092 units respectively, increasing 3.3 times and 3.4 times year on year. From the total, battery-powered cars sales accounted for 247,482 units, while plug-ins sales hit 83,610 units.

Via Bloomberg