Wanna-be EV: Tesla spawns electric vehicle start-ups with major Chinese funding [Infographic]
Last week, at the Code Conference, Tesla Motors [NASDAQ: TSLA] CEO Elon Musk was asked about competition. He addressed current automakers and possible threats from Apple and Google. However, before any discussion of those competitors, he noted, "There are have been so many announcements of autonomous EV [electric vehicle] start-ups that I’m waiting for my Mom to announce one… I mean there’s a lot. In the US alone there are four I think maybe five China funded EV start-ups at the billion dollar plus level, like serious funding.” It sounds like Musk has been paying attention to these electric vehicle start-ups, so that begs the question... who are some of these companies?
Last year, Wired did a piece called Attack of the Chinese Tesla Clones citing a number of Chinese Tesla copycats and quoted a Tesla spokesperson who remarked: "China has shown a commitment to sustainable transportation, and Tesla is committed to helping in those efforts. We’re happy to see Model S and Tesla’s business model used as benchmarks for improvement. We opened our patents to encourage good faith use of our technology, not to facilitate creation of Tesla knockoffs, which neither advance innovation, nor help the EV movement. And, consumers know the difference between competition and copycats."
Should any of the so-called competitors inspired by Tesla be taken seriously? It's worth taking a look at a few key examples. To that end, Visual Capitalist recently created a helpful infographic (see below) and noted that, "Tesla’s rise has inspired a dozen new EV rivals. If imitation is the sincerest form of flattery, then Elon Musk should be blushing." They point to a three nascent companies: "Tesla’s [possible] rivals include Faraday Future, NextEV, and Atieva. This set of companies has raised hundreds of millions from prominent venture capitalists in a bold effort to emulate the success of Tesla, which had its shares skyrocket from $17 to north of $200 since the company’s 2010 IPO." So let's take a look at some of these upstart electric vehicle companies looking to step onto Tesla's turf.
First up is Faraday Future. It's reported that, "Faraday Future is possibly one of the more interesting names on this list. Backed by Chinese internet billionaire Jia Yueting, the company is notoriously secretive and hasn’t publicly revealed its CEO. It has however, hinted that its technology could potentially help mount a serious challenge to Tesla. Faraday Future executive Nick Sampson, the former head of vehicle and chassis engineering at Tesla, said that the company’s goal was to 'revolutionize mobility the same way the iPhone revolutionized the phone industry'.... Faraday Future recently broke ground on its $1 billion Nevada factory, aiming to launch its first vehicle for sale in 2017." Hmmm, sounds a lot like the factory was inspired by the $5 billion Tesla Gigafactory in Nevada.
Next up is: "NextEV, another EV startup with Chinese connections, has reportedly raised more than $500 million from big names including Sequoia Capital, Tencent, and Joy Capital. Started by William Li, who previously founded the largest provider of car-pricing data to Chinese dealers, the company has a similar vision to that of Faraday Future: it plans to focus on connectivity and infotainment features to take the EV beyond just a form of transportation. To help guide in this plan, NextEV has hired Martin Leach, who previously served as the president of Ford Europe and also the CEO of Maserati."
The last company highlighted is, "Atieva [which] has made recent ground in the EV market after securing the majority-backing of one of China’s largest automakers. Founded in 2007 by Bernard Tse, who was also originally on Tesla’s Board of Directors, Atieva initially planned to provide monitoring software for electric vehicle battery packs. Today, the company has now reportedly moved towards manufacturing EVs with the vision of 'redefining what a car can be by building an iconic new vehicle from the ground up.'"
So what should we make of all these flashy design sketches and one-off concept cars? Visual Capitalist* concludes, "Building an electric car company from the ground up is a daunting task, and many imitators have already failed spectacularly. Fisker Automotive, for example, famously declared bankruptcy in 2013 even after burning through $1.4 billion in funding." We'll keep our eyes on these faux competitors to see how they develop. But, if they go on to reveal anything like Faraday Future's presentation at the Consumer Electronics Show this year, we won't be too impressed.
*Source: Visual Capitalist