Electric-vehicle maker Kandi Technologies (KNDI) inked a credit-financing deal with one of China’s biggest state-owned banks. Kandi stock jumped.
The Hangzhou branch of the Agricultural Bank of China will provide Kandi with a 500 million renminbi (about $76.5 million) line of credit. That will support the first phase of a ride-sharing service that features battery swaps.
The partnership also includes Zhejiang Ruiheng Technology Company, a ride-share unit Kandi established, as well as China Battery Exchange Technology Company, which is Kandi’s battery-swap subsidiary.
One of China’s “Big Four” state-owned banks, Agricultural Bank of China will treat the three entities as favored customers for financial services, fund management and fundraising, the statement added.
Kandi’s deal for credit financing follows a flurry of capital raises to fund expansion by Chinese EV stocks Nio (NIO), Xpeng Motors (XPEV) and Li Auto (LI), as they try to fend off Tesla (TSLA) on their home turf.
The line of credit from a top state-owned bank also comes as Beijing has signaled a stricter regulatory stance against China’s tech companies.
Shares popped 12% to 7.71 in Tuesday’s stock market, still under the 50-day support level. Kandi stock undercut the 50-day line after short-seller Hindenburg Research on Nov. 30 accused the company of faking sales.
Among other Chinese EV stocks, Nio lost 3.3% Tuesday, Li Auto added 0.3% and Xpeng gained 1.8%. Tesla edged up 0.3% after it signaled that a delivery target of half a million EVs in 2020 is within reach. Tesla stock, which is on the IBD Leaderboard, hit an all-time high of 695 in December as investors rushed in to buy the stock before it entered the S&P 500.
Some analysts see an “EV arms race” in the Chinese EV (electric vehicle) market heading into 2021. In China, demand for electric cars roared back over the past six months, following a pandemic hit earlier.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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