Chinese online video provider LeTV confident about push into electric cars
Despite domestic opposition, new finance head 'blown away' by what video firm has achieved
Online video provider LeTV of China is confident about its push into the electric car business despite opposition from domestic carmakers and expects competition from domestic technology rivals such as smartphone maker Xiaomi, with which it has been embroiled in a public spat over smart devices.
LeTV hired banking executive Winston Cheng to head up its corporate finance and development last week after announcing last year that it would start work on an electric car. There have been similar rumours about Xiaomi.
"When I first joined LeTV, the [electric car business] was what I was probably the most sceptical of," Cheng, who is in charge of LeTV's financing, investment and mergers and acquisitions, told the South China Morning Post.
"The capital required is really high, and what advantages do we have to build an electric car? But when I saw what we've achieved in less than a year in our car business, it blew me away," he said.
In December, LeTV chief executive Jia Yueting said the company's electric vehicle project, dubbed SEE for "Super Electric Eco-system" would "redefine" the industry.
Although no timeline has been set for the roll-out of its first model, Jia hired Allen Lu, a former managing director at Infiniti China, in January to speed things up.
However, senior industry figures have mocked the ambition of companies like LeTV and Xiaomi, with Wang Chuanfu, chairman of carmaker BYD dismissing their entry as "nothing but a joke".
Beijing has set and missed a number of ambitious goals for electric vehicles in the past, such as its plan to have 500,000 on the road by 2015. Last year, Beijing shrank its target of having five million in 2020 to one million.
Yet demand in the world's top car market started to boom at the end of last year after a long period of disappointing growth, with sales jumping 324 per cent year on year.
LeTV now has over 200 employees and experts dedicated to SEE as it aims to bring drivers a new level of "practical functionality", said Cheng, formerly of Bank of America Merrill Lynch in Asia.
LeTV started out as an online video platform that came to the fore with its smart TV in 2013 before it started diversifying into areas such as smart bicycles, vehicles, and, as of this April, smartphones.