Chinese electric car makers pose ‘no serious threat’ to Tesla
In the past year or so, the term “Tesla challenger” has become something of a cliche when applied to Chinese-backed electric vehicle start-ups.
But according to analysts, it will be quite some time before a genuine rival to the American market leader emerges.
“It’s too early to say if they [Chinese electric vehicle makers] can challenge Tesla, I don’t even see their cars on the roads and don’t know their prices. I am sceptical about how many of them can survive and move onto mass production,” said Yale Zhang, managing director at consultancy Automotive Foresight.
“They are keen to be labelled as Tesla challengers as they need brand awareness, but they can’t compare with Tesla in the fields of brand recognition or consumers craze, and that’s partly down to Elon Musk’s halo effect.”
I don’t see any of these start-ups, or even BYD being able to challenge Tesla, at least in the next two to three years
John Zeng, managing director of consultancy LMC Automotive, said even the best known mainland electric vehicle makers, like BYD, are a long way off posing a serious threat to Tesla.
“I don’t see any of these start-ups, or even BYD being able to challenge Tesla, at least in the next two to three years,”
Many of the Chinese electric car start-ups are currently only at the concept or prototype phase, aiming to draw investors’ attention and raise funds, Zeng said.
“Their target is more on the capital market instead of the consumer market. There is still a long way to go before any of them can mass produce their vehicles,” he said.
“These carmakers will lose a lot of money selling such cars, I wonder if they can really mass produce these high-performance EVs.”
Faraday Future, the electric vehicle start-up backed by Chinese internet giant LeEco’s billionaire founder Jia Yueting, has been hailed by many as the latest potential challenger.
At a launch event ahead of the annual Consumer Electronic Show in Las Vegas on January 3, the company debuted its first car, the FF91, which it claims is the fastest of its kind in the world, capable of accelerating from 0 to 60 miles per hour in just 2.39 seconds. That beats Tesla’s Model S, that can do the same in 2.5 second.
Lucid Motors, another start-up backed by Chinese money, is also targeting the high-end segment long dominated by Tesla. In December, the firm unveiled a prototype vehicle boasting 1,000 horsepower and acceleration of 0 to 60mph in 2.5 seconds, rivalling Tesla.
Also joining the foray is NextEV, which counts Chinese internet giant Tencent Holdings and investment firm Hillhouse Capital among its investors. The start-up last November unveiled a high-performance prototype, the Nio EP9, which it claims has a top speed of 313 kilometres per hour, rivalling Tesla’s Model X.
China’s electric vehicle start-ups are fast catching up with their US counterparts in technologies such as artificial intelligence, connectivity and autonomous driving but, as relative latecomers to the game, they are struggling to compete with Tesla, said Zhang.
A number of mainland start-ups are focusing on making affordable electric cars, aimed at middle-class consumers, a market currently dominated by Tesla’s Model 3 which has a price tag starting at US$35,000.
Tencent-backed Future Mobility, Qiantu Motor and Zhiche Auto - which has launched its own marque, Singulato (Jidian in Chinese) - are all competing in the affordable car segment.
Zhao Xiang, a senior analyst with Beijing-based consultancy Analysys International, said Jidian has the highest hope of competing with Tesla in the segment, because a recent round of funding had given it the upper hand in terms of mass production.
Zhiche Auto said in November that it had secured US$600 million of funding and planned to invest 8 billion yuan in building a plant in southeastern China’s Anhui province to produce 200,000 vehicles a year.
“Mass production is a major obstacle to EV start-ups as the regulations in China are strict,” Zhao said.
