Across China’s 9.6 million square kilometers of land, there was never a shortage of ambition. So too with the electric vehicle revolution. Despite being a late comer to the EV craze, the country’s start-ups are not shy about aiming high. At least half-a-dozen Chinese EV start-ups – not including traditional car makers going green – have made Tesla their primary benchmark and chief competitor.
These EV start-ups, all established in the past two to three years, want to compete with Tesla both globally and on its home turf, the United States. But considering that no Chinese car brand currently sells in the U.S., it would require nothing short of a miracle to realize these audacious plans. If gasoline-powered cars from China were never able to crack the U.S. market, will EV makers be different?
It turns out their biggest weakness could be their winning card. Unlike conventional car makers that are building up EV products from existing platforms and facilities, these EV start-ups were created with completely brand new teams, with top talent and research centers around the globe, not to mention billions of dollars in investor capital.
As a result, some of them are entering the market with enhanced performance and technical advances, claiming metrics better than those achieved by other peers globally. Currently, these EV companies are all building new factories in order to ship vehicles in two to three years.
We therefore list five Chinese EV start-ups that have a shot at seriously competing with current market leader Tesla. As these companies are born global with research facilities around the world or founding team members from the West, it is almost impossible to find one that is strictly “Chinese.” In addition, some start-ups purposefully mask their China connection, in order to appear more “global” to attract potential buyers.
The list below includes companies that are perhaps not 100% Chinese, but either have significant Chinese participation in the founding team, significant Chinese capital backing, or major manufacturing facilities in China.
NIO EP9, a supercar that’s claimed as the world’s fastest electric vehicle.
NIO EVE is designed for fully autonomous driving experiences with flexible seating.
NIO’s co-founder William Li previously took an automobile content portal public in New York.
NIO, formerly known as NextEV, is perhaps the most high profile Chinese EV start-up with an ultra modern brand image. Certainly the best-funded with a rumored nearly US$2 billion in capital raised, the Shanghai-based company has built EV race cars and won the Drivers Title in the first Formula E Championship last year. The car went on to set new records at two race tracks in Europe.
Shanghai-based NIO was established in 2014 by a team led by William Li (Li Bin), a young successful entrepreneur who founded Chinese automobile online content and marketing platform Bitauto Holdings Ltd. in 2000 and IPO’d the company on the New York Stock Exchange ten years later.
The well-connected executive was able to pull together an impressive founding team including Chinese business tycoons Liu Qiangdong, founder of e-commerce giant JD.com, and Li Xiang, founder of Chinese automobile platform Autohome.com. Martin Leach, formerly CEO of Maserati Gruppo Ferrari Maserati and president of Ford Europe, was also a co-founder.
Its star-studded management team also includes former chief technology and strategy officer at Cisco Systems Padmasree Warrior, former chief of vehicle concepts at Italdesign Giugiaro S.p.A Danilo Teobaldi, and a former senior program director at Tesla, Inc. John Thomas.
Painfully aware of the intensive capital demand of a brand new EV company, NIO raised capital at a breathless pace. Aside from being backed by a number of Chinese billionaire co-founders, the start-up received financial support from Chinese Internet giant Tencent Holdings Ltd. and the most exclusive Chinese investment firm Hillhouse Capital at the time of its establishment.
NIO, back then still named NextEV, did not disclose how much the investors put in, but Chinese media reports speculated that it could be US$500 million. In September 2015, Sequoia Capital, Joy Capital and other unnamed investors reportedly invested US$500 million in the company again. In July 2016, Singapore’s Temasek Holdings, TPG, Hopu Investment Management and Lenovo Group were rumored to inject hundreds of millions U.S. dollars. The latest funding rumor came last week when Tencent, Baidu Inc. and others invested US$600 million.
NIO refused to comment and said it could not confirm its capital raising history, as the company seems determined to keep the information private. Media reports in China generally over-state financing numbers, therefore the aggregate funding total might be smaller than US$2 billion. But founder Li has repeated said that RMB20 billion (US$2.9 billion) is the minimum required to bring a new EV vehicle to market. If that’s the case, NIO will need to raise a couple of more rounds before its cars get ready for shipment.
Nevertheless, NIO is certainly the best-funded Chinese EV start-up, and it has the products to show it. The company, with research and development centers in San Jose, Munich, London and Shanghai, as well as eight other locations including production facilities in Nanjing city in China, revealed its electric supercar the NIO EP9 last November.
Claimed as the world’s fastest electric car, EP9 delivers one megawatt of power, accelerates from zero to 200 kilometer per hour in just 7.1 seconds and has a top speed of 313 kilometer per hour. With an interchangeable battery system, the EP9 is designed to be charged in 45 minutes and has a range of 427 kilometers. But NIO plans to produce only six EP9, worth US$1.2 million each, for its early backers including company founder William Li, Tencent founder Pony Ma, Xiaomi founder Lei Jun, JD.com founder Liu Qiangdong, Autohome founder Li Xiang and Hillhouse Capital’s boss, Zhang Lei.
Taking a page from Tesla, the EP9 was a super high-end product revealed in preparation for NIO’s mass market car dubbed EVE. A fully autonomous electric vehicles that NIO calls “a robot on wheels”, the EVE comes with an artificial intelligence engine, verbal and visual communication tools, augmented reality display and forward-sliding doors. The car will also feature flexible seating and a folding table, and other designs that go with fully autonomous driving experience. The NIO EVE will be available first in the U.S. in 2020, and the company has not disclosed its retail price.
The company is only producing a few key parts including the engine and battery systems on its own, while having other parts made by partners. For example, Hefei city-based JAC Motors has agreed to make aluminum car bodies for NIO. As NIO has not obtained a license to make and sell EVs in China, JAC Motors has also agreed to sell NIO cars in China using its own EV license.
2. Faraday Future
Faraday Future’s futuristic factory in the Nevada dessert.
Faraday Future’s FF91 is planned to go into production next year, but is facing uncertainty.
Faraday Future is backed by Chinese billionaire Jia Yueting.
Founded in 2014, Faraday Future is a EV start-up backed by Chinese billionaire Jia Yueting, the founder of technology conglomerate LeEco and a controversial figure who has been called everything from China’s Steve Jobs to the head of a Ponzi scheme.
The company, which has encountered financial troubles as parent LeEco crumbles under the strain of unrealistic expansion, embraces the idea that a tech company is better placed to manufacture a new EV car than an existing car company. “We are starting with a clean slate. Instead of attempting to retrofit existing products and outmoded practices to the task at hand, we face it head on with original concepts and new technologies,” the company declares on its website.
It debuted its first car, FF 91, two days before CES 2017 in January. The four-door sedan has four seats, and can accelerate from 0 to 60mph in 2.39 seconds. Other cool features include driverless valet system, which allows the driver to order the car to park itself, and two aerodynamic antennas, which allows the car to act as a WIFI hotspot. And instead of keys, the vehicles use Bluetooth and facial recognition to unlock the door.
To show that it got muscle, Los Angeles-based Faraday Future released several YouTube clips of its FF 91 prototype outracing a Tesla Model S P100D, a Bentley Bentayga and a Ferrari 488 GTB. With such fancy features, the FF 91 won’t come cheap, with a price tag of around US$280,000. The company claims to have received over 64,000 reservations with US$5,000 deposit for each. But it also admits that not all the reservations require a deposit and the number does not reveal the true demand for the car.
The FF91 prototype is planned to go into production in 2018, but the biggest challenge facing Faraday Future is that it may not have enough money. A source close to the company told China Money Network that Jia himself had put roughly US$500 million into the car company, but it needs at least another US$2 billion to complete construction of its Nevada factory.
As LeEco was able to raise life-saving funds for various of its subsidiaries during the past six months, but not for the car project, Faraday Future’s life-and-death hangs on if the money – enough money – can be secured timely.
It recently hired Stefan Krause, previously chief financial officer at BMW and Deutsche Bank, as its CFO. Krause was at BMW until 2008, where he helped launch its iCar electric vehicle strategy. He then moved to Deutsche Bank and served as CFO until 2015. In short, he knows how to build electric cars, and raise large amounts of money.
If Kraus – Faraday Future’s last hope – can raise the much needed capital, Faraday Future could be producing some of the first and fastest Chinese-backed electric sports car in the U.S. within the next two years. If not, billionaire Jia will find himself worth half a billion less.
3. Future Mobility Corp.
An image of Future Mobility’s prototype, published by Chinese state media.
The company’s two co-founders, Carsten Breitfeld (left) and Daniel Kirchert (right)
Founded in 2016 by two veteran automobile executives, Future Mobility Corporation has secured backing from Chinese Internet giant Tencent Holdings Ltd. and Foxconn Technology Group, the manufacturer of Apple’s iPhone.
The Hong Kong-registered company, intent on keeping a low profile, has not disclosed how much funding it had raised or revealed any product details. But it has an outstanding founding team, including co-founder and CEO Carsten Breitfeld, formerly vice president at BMW and head of BMW’s hybrid sports car i8 program. Daniel Kirchert, ex-managing director at Infiniti China and president of Dongfeng Infiniti Motor Co., Ltd., serves as chief operating officer.
The company, with a research and development center in Shenzhen and teams in Europe and Silicon Valley, also counts three engineers at BMW’s i8 program Benoit Jacob, Dirk Abendroth and Henrik Wenders in its team, as well as engineers from Google, Tesla, Mercedes-Benz and BMW.
Future Mobility announced plans in January to invest RMB11.6 billion (US$1.7 billion) to build a new factory in Nanjing to manufacture its electric vehicles. The company is aiming to complete its first phase of construction in 2019, at which point it will be able to manufacture 150,000 cars a year. The planned factory is expected to have the capacity to eventually produce 300,000 cars a year.
Its first car is likely to have a price tag of about RMB300,000 (US$43,700), and unlike the two companies above, is expected to hit the Chinese market first in 2019.
4. Lucid Motors
Lucid Motors’ Lucid Air will be priced it at around US$60,000.
Lucid Motors’ co-founder is Sam Weng, an entrepreneur previously focused on battery systems.
Menlo Park, California-based Lucid Motors does not appear “Chinese” on the surface, with most of its senior management from the U.S. and all of its operations in North America. But its disclosed investors are mainly from China, including China’s LeEco, Tsing Capital, China Environmental Fund and Jafco Life Science.
Lucid was founded in 2007 by an entrepreneur named Sam Weng, who is fluent in Japanese, Chinese and English, with two other partners to focus on developing battery systems for EVs. In 2014, the team decided to build a complete car and raised a 9-digit funding round, reportedly with US$200 million from the above Chinese investors and Japan’s Mitsui & Co., Ltd., as well as U.S. venture firm Venrock.
The company has revealed its car Lucid Air and priced it at US$60,000 for a 400-horsepower rear-wheel drive version of the sedan with a 240 miles range. After deducting the federal tax credit available for buyers of electric vehicles, the Lucid Air will have a base price of US$52,500. The base model car will provide better performance than comparably priced BMWs and Mercedes-Benzes, the company claims.
Lucid is planning to start shipping cars in 2019, first in the U.S., followed by China and Europe. The company is aiming to sell 8,000 to 10,000 vehicles in its first full year of production, ramping up to about 50,000 annually within three years. It is also planning to build a US$700 million factory in Arizona.
5. WM Motor
Chinese media published some leaked pictures of WM Motor’s cars, but the company denied the authenticity of the images.
WM Motor’s founder Freeman Shen was instrumental in helping Geely purchase Volvo in 2010
WM Motors was established in 2015 by Freeman Shen, a vice president of Chinese automobile manufacturer Geely Automobile Holdings and chairman of Volvo China. Instrumental in helping Geely acquire European car maker Volvo for US$1.5 billion in 2010, Shen told Chinese media that his new EV start-up has raised US$1 billion in aggregate fundraising, though the number should be read with a grain of salt when no investor names are disclosed.
The company, with design and R&D center in Shanghai, a big data center in Beijing and a technology center in Germany, plans to unveil its first mass market electric car in 2018 in China, and is considering expanding to the U.S. market at a future date.
WM Motor is targeting the mid-market, with its sedans and SUV vehicles priced at around RMB200,000 (US$29,000) or event lower, according to Chinese media reports. It is planning to launch one smart car each year in the following seven years, and is expected to have over 100,000 cars sold each year in three to four years after they are launched in 2018.