Business / Technology

Tencent bets big on Tesla rival NextEV

(China Daily) Updated: 2015-09-03 10:22

Shenzhen-based firm leads the group of investors who support new-energy carmaker

Tencent Holdings Ltd is backing a Chinese version of global market leader Tesla Motors Inc in a new push to tap into the booming electric car market.

The cash-rich company is among a group of investors which poured money into NextEV Co Ltd, a Shanghai-based electric car manufacturer, according to a report by Reuters.

Without offering further details of the investment, a spokeswoman for NextEV told Reuters that the startup is already luring employees from international carmakers.

Among the company's new staff are Martin Leach, former president of Ford Motor Co's European branch, who now serves as co-president of NextEV.

The spokeswoman said the company will launch its first model in 2016, which could accelerate from 0 to 100 kilometers an hour within 3 seconds. Tencent declined to comment on the development.

Founded a year ago, NextEV has offices in the United States and Europe, according to its official LinkedIn page.

The report came shortly after China overtook the US as the largest market for new-energy vehicles. In the first half of this year, more than 72,000 green cars were sold in China, about 20,000 units more than the figure in the US, according to data from the China Association of Automobile Manufacturers.

The move is also the latest effort by Tencent to cash in on the electric car boom. In March, the social networking giant partnered with Hon Hai Precision Industry Co Ltd and luxury car dealer China Harmony Auto Holding Ltd to manufacture and sell smart electric cars.

Alibaba Group Holding Ltd and Baidu Inc, two major rivals of Tencent, are also eyeing the sector. They have teamed up with SAIC Motor Corp Ltd and BMW respectively on similar initiatives.

Gene Cao, a senior analyst at market research firm Forrester Research Inc, said it is highly possible for China to have a homegrown electric carmaker to compete with Tesla.

"Unlike the US-based company which thrives on pure technological edges, Chinese Internet heavyweights have little or no automotive background. But they are veterans in consolidating resources and good at coming up with new business models" Cao said.

"Their entry will attract even more cash and talent, which is key for the research and development of cars powered by renewable energy," Cao said. "A globally competent Chinese electric carmaker is likely to emerge in the next few years," he said.

Earlier this year, the government listed new-energy vehicles as one of the 10 key industries in its national strategy - Made in China 2025, and expects sales to cross 2 million units by 2020.

Pan Wei, an analyst with Beijing-based Internet consultancy Analysys International, said the appeal of electric vehicles lies in the huge number of drivers.

"Smart electric cars can better digitize the behavior of China's more than 100 million drivers," Pan said. "This will help Internet companies collect a huge amount of data, profile their preferences and thus generate more profit from each user."

Ma Si contributed to this story.

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