Tesla’s China Challengers To Replicate World’s Best Electric Carmaker Success At Home

Tesla’s China challengers want to replicate the world’s best-selling electric carmaker success at home. But the road to success is long and arduous, which even the American company took nearly a decade to surmount and eventually become viable.

Tesla’s China Challengers To Replicate World’s Best Electric Carmaker Success At Home

Notwithstanding challenges like the Covid-19 outbreak that briefly slowed down sales of new-energy vehicles, Chinese start-ups are pressing ahead with their plans to grab a share of the mainland’s growing NEV market and unseating Tesla from its lofty perch.

The plans are in different stages for the handful of potential Tesla challengers. In the past couple of months some have unveiled upcoming production models that have longer driving ranges.

Some are working on expanding production facilities to lower costs, while others have undertaken massive fundraising exercises and come up with innovative battery-swapping schemes.

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However, mainland consumers remain far from convinced, as analysts say the market is yet to see a real Chinese-made electric car model that can stem the early dominance Tesla, whose Model 3 outsells its nearest competitor by three to one.

“Competition is getting heated, but Tesla enjoys an overwhelming advantage,” said Chen Jinzhu, chief executive of Shanghai Mingliang Auto Service, which sells car insurance and deals in second-hand vehicles. “The grim reality is that Chinese drivers would choose Tesla now as the cars are priced attractively.”

Earlier this month, Evergrande Health Industry Group, the electric vehicle arm of mainland property developer China Evergrande Group, unveiled six car models under its Hengchi brand.

The company has made its ambitions clear that it wants to become the world’s largest NEV manufacturer over the next three to five years, even proposing to change its name to China Evergrande New Energy Vehicle Group.

The company has spent more than 20 billion yuan (US$2.9 billion) on developing an entire NEV industry chain, complete with car, batteries, motors and power systems, with plans to invest another 25 billion yuan to bring its electric carmaker plans to fruition.

It is also building two plants in Guangdong and Shanghai with a capacity to produce 200,000 vehicles a year. While the company says it plans to start mass production of the Hengchi-branded cars next year, details such as pricing and availability have not been revealed.

Investors seem to be caught up in the excitement, propelling the company’s shares nearly 285 per cent higher this year, valuing it at more than HK$258 billion (US$33.3 billion) on Friday.

Li Auto, a five-year-old start-up backed by mainland online services delivery giant Meituan Dianping, is clear in its plans. It raised US$1.1 billion in an initial public offering (IPO) on Nasdaq at the end of July to support its long-term plans of focusing on the SUV segment.

The company has a plant in Changzhou, Jiangsu province, where its manufactures the Li ONE SUV. It has sold 10,400 units since its launch in November to June this year.

Guangzhou-based Xpeng, another start-up and potential Tesla challenger, is planning on raising up to US$1.1 billion in an IPO in New York to take on rivals for a slice of the NEV market, according to a filing overnight.

In December 2018, Xpeng launched its first production model, the Xpeng G3 SUV, and followed it up with the P7 sports sedan, in April this year.

Xpeng sets IPO price range as EV maker prepares to challenge Tesla in China

“Tesla, as the most established NEV brand worldwide with the most mature technology, is ratcheting up pressure on the Chinese rivals as it reported buoyant sales of Model 3 cars,” said Yale Zhang, managing director of industry researcher Automotive Foresight. “It is not an easy job to unseat it from the leading position.”

Originally published at Yahoo news