Chinese e-commerce giant Alibaba Group (BABA) has-co led a $2.2 billion yuan ($348 million) fundraising round in electric vehicle manufacturer Xiaopeng Motors, marking its first major investment in an automaker. Foxconn Technology, a Taiwanese electronics manufacturer, also co-led the round, with additional investment from backers including venture capital firm IDG Capital. Xaiopeng, also known as Xpeng, will use the funding for both research and production costs, according to a Monday press release. 

BABA's recent investment in Xpeng is reflective of a larger wave of capital flowing into electric car companies in the world's most populous country. Xpeng is just one of a handful of Chinese startups hoping to speed up the development of battery-powered technology and grab a larger share of the new energy vehicle (NEV) market. 

Global Partnerships

Hangzhou-based Alibaba has inked deals with smart car technology companies, as well as traditional Western and Chinese auto players such as Ford Motor Co. (F) and Germany's BMW. BABA rivals Baidu Inc. (BIDU) and Tencent Holdings Ltd. have recently led funding rounds each upward of $2.5 billion into startups such as NiO and WM Motor Technology. Last March, Elon Musk's Silicon Valley auto company Tesla Inc. (TSLA) received an $1.8 billion investment from Tencent, China's largest company by market capitalization, for a 5% stake. The EV pioneer has seen its stock grow over 36.2% in the most recent 12 months to reflect a market cap of approximately $57.6 billion. 

As autonomous vehicles are set to be intertwined with online gaming, streaming video, internet shopping and social media, the world's largest tech companies are hoping to double down on the high-flying market by pushing their technology into next-gen cars. Alibaba and Foxconn indicate that their Xpeng investment will offer them the ability to capitalize on the overlap of internet, artificial intelligence and traditional manufacturing. 

Xpeng's latest Series B round brings the four-year-old company's total funding to 5 billion yuan, following its most recent round in December, in which BABA also participated. The startup indicates that its first vehicle, the G3, will hit the market this year.