German auto giant Volkswagen Group has completed the USD700 million acquisition of a 5 percent stake in Xpeng Motors that the Chinese new energy vehicle startup had announced in July.

Xpeng issued nearly 94.1 million Class-A American depository shares, equal to 5 percent of its total equity, at a price of USD15 apiece to Volkswagen’s affiliate Volkswagen Finance Luxembourg for a total of USD706 million, the Guangzhou-based firm announced yesterday.

Volkswagen will invest USD700 million for a 5 percent stake in Xpeng, paying USD15 for each newly issued share, or about a 2.3 percent discount on the USD15.36 closing price of Xpeng’s ADS on July 25 when the technical framework agreement was inked, the NEV startup announced on July 26.

Xpeng’s shares [HKG: 9868] closed 0.4 percent down at HKD64.10 (USD8.20) in Hong Kong today. The company’s New York-listed stock [NYSE: XPEV] rose 3.2 percent to USD16.70 yesterday.

After deducting related costs and expenses, Xpeng’s net proceeds from the transaction amounted to about USD705 million, the firm added yesterday, noting that it plans to use the proceeds for general corporate purposes, including meeting its working capital needs.

In the statement, Xpeng also unveiled that the two companies are making significant progress on the joint development of the two B-class battery electric vehicle models mentioned in the technical framework agreement. The project feasibility study has achieved a positive outcome and has been completed, Xpeng said, adding that both parties are actively evaluating deeper strategic collaboration in smart electric vehicle technologies.

Xpeng’s third-quarter net loss widened 64 percent to CNY3.9 billion (USD5.5 billion) from a year earlier and 39 percent from the previous quarter, according to the company’s latest financial report. Revenue rose 25 percent and 69 percent, respectively, to CNY8.5 billion. Its gross profit margin was minus 2.7 percent in the three months ended Sep. 30, down 16.2 percentage points from the same period last year.

Xpeng delivered 20,000 NEVs in November, up 245 percent from a year earlier, 8,750 units of which were the new Xpeng G6 launched in June. In the first 11 months of the year, Xpeng delivered a total of 121,500 vehicles.