China’s internet billionaires are launching their answer to Elon Musk’s Tesla Motors (NASDAQ: TSLA). A new Shanghai headquartered car maker, NextEV, is expected to debut its first Tesla rival offering in 2016. It is backed by Tencent, China’s most used online portal, among other tech giants.
NYSE listed e-commerce group Alibaba and the world’s 4th largest smartphone maker Xiaomi have already announced that they are also examining the possibility of investing in the venture. Additionally backing NextEV is Hillhouse Capital, a $20 billion investment management firm also an investor in Uber, the American ride sharing service.
“The first model launched by NextEV will be an electric supercar,” NextEV spokeswoman Jili Liu told Reuters. “This EV supercar is expected to outperform all combustion (engine) supercars in the world.” It will be designed to produce more than 1,000 horsepower and accelerate from 0 to 100 kilometers an hour within 3 seconds, Liu explained.
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The Chinese founders have hired the former chief operating officer of Ford Europe, Martin Leach, tasked with building a global motor brand. Among NextEV’s other hires are the former chief of vehicle concepts at Italdesign Giugiaro; a former senior designer at BMW, and a former senior program director at Tesla.
NextEV is keeping the details of the depth of its financial backing confidential. However, it was disclosed that it will target its home market first and move beyond at a later stage. This is bad news for Tesla, which sees China as an extremely important source for growth, but finds it difficult to fulfil its goals in the country.
Only this weekend it was revealed that Elon Musk is pushing the Obama administration to discuss with the Chinese President Xi Jinping during his US visit later this month the possibility of relaxing its requirements for foreign auto companies to sell in China.