Foreign media: New forces in building cars are learning that China also wants to have its own “Tesla”

Investors are pouring billions of dollars into Chinese electric car start-ups in search of the industry’s next Tesla. Tesla’s share price has risen nearly ninefold in the past year, and Chinese electric car makers have benefited. But some analysts point out that China’s charging infrastructure still needs to be improved. And the electric car market is highly competitive, with competition from Tesla and traditional automakers intensifying.

Media: New forces in building cars are learning that China also wants to have its own "Tesla"

On Friday, Alibaba-backed electric car maker Xiaopeng Motor jumped more than 40 per cent on its first day of trading in New York after it had already invested $1.5bn. Ideal’s shares have also risen nearly 70 per cent since it raised $1.1bn through a nasdaq listing in New York in July.

Michael Dunne, founder of ZoZo Go, a market consultancy, said: “If I were the founder, I would give Musk, Tesla’s chief executive, a Christmas gift in advance.”

He added: “I’m not saying these companies are in a bad place – on the contrary, they’re in a good place.” “But for the company itself, without Tesla, they would have had to make ends have to live.”

Another beneficiary of the improving outlook for the electric vehicle industry is the NIO. A year ago the NIO was burning money at a rate that many analysts thought could be fatal.

However, NIO recently posted its first quarterly profit and its share price soared again after it received $1bn in funding in April. The company’s share price has risen 550 per cent in the past 12 months.

NiO announced Monday that it plans to raise $1.7 billion through the sale of American Deposit receipts.

Recently, NIO founder Li Bin said at his flagship showroom in Beijing that cash flow problems had been the “biggest stress test” facing the company, with consumers delaying purchases of the company’s cars for fear of bankruptcy.

Those fears, he argues, are now fading. “Demand for our cars is rising rapidly, ” says Mr Li. “Customers’ concerns have been dispelled.”

China’s electric car market rebounded in July, boosting the performance of many companies. The collapse of many companies that rely solely on industry subsidies has led to a reshuffle of the electric car industry.

But industry executives say the remaining competitors are now in a better position.

“It’s an industry policy,” said Rupert Mitchell, chief strategy officer at Wima Automotive, a Chinese electric car maker. The company is expected to go public later this year. “There are now four or five strong new players who will have a significant market share by 2025.”

Ideal Cars advertises its electric cars for longer range, while both Xiaopeng and Weima say smart features such as their own voice assistants and custom operating systems are more popular with Chinese consumers.

But Tesla’s unparalleled appeal to consumers in the Chinese market could still threaten domestic electric car makers. Tesla sold 45,721 cars in the first half of the year, while the Model 3 remains the most popular electric car in china.

Robin Zhu, an analyst at Bernstein, said Tesla’s habit of cutting prices to stimulate sales could also put pressure on its Chinese counterparts. Tesla’s Model Y competes directly with NIO’s ES6, while Model 3 competes with Xiaopeng’s P7.

Competitors point out that Tesla benefits from multiple factors, such as concessional loans. “The biggest beneficiary is undoubtedly Tesla, ” says Mr Li of NIO.

In addition to Tesla, Chinese electric car companies will have to compete with traditional carmakers. Many traditional carmakers are introducing electric models specifically for the Chinese market.

Mary Barra, GM’s chief executive, said in August that “as GM’s largest market . . . The Chinese market will play a key role in realizing our vision of moving to electric vehicle sales. “

At the same time, Volkswagen Group has pledged that all new production capacity in the Chinese market in the near future will be dedicated to the production of electric vehicles. The group is planning to launch a big electric car model, with VW investing 2bn euros in a 50 per cent stake in Jianghuai In April.

But analysts say that in the long run, foreign competitors entering the electric vehicle market could increase the chinese market’s chances of becoming a global champion in the electric car industry.

“Ultimately, China wants to have its own Tesla, ” says Mr Dunn of ZoZo Go. “They want Tesla to have its own supply chain in China so it can learn from it. But over time, they will be willing to shift that support to local companies. “