Chinese Tesla Motors Inc (TSLA) Rival NextEV Backed By Internet Entrepreneurs

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NextEV, a rival to Tesla Motors Inc (NASDAQ:TSLA), has received solid backing among Chinese Internet entrepreneurs, as well as, financial investors. That included Tencent, as well as, Hillhouse Capital. That means possibly a new rival is in the making. However, there is enough space in the making of electric vehicles since more and more countries are promoting green initiatives and the use of alternate renewable energy system.

Hired Former Executive Of Ford

The backers of the Chinese NextEV seems to be very clear in their objective as they have appointed a former Ford Motor Company (NYSE:F) executive, Maryin Leach, to create a global automaker. More than this, Tesla Motors Inc (NASDAQ:TSLA) should be worried that its experienced staff were migrating to its Chinese rival. The backers have also appeared to have appointed a number of experts from Volkswagen AG, and BMW AG apart from other big car companies.

Incidentally, Hillhouse has also invested in the United States ride sharing service, Uber. Also, the investors do not have either automotive background or technological exposure to developing a new electric car company. It was no surprise that the Chinese government was ready to extend its support. The country has changed its rules most recently to promote investment by non-auto companies.

Considering Investments

Significantly, Alibaba Group Holding Ltd (NYSE:BABA) name also figured in the potential list of investors, who are considering investment in the newly developed Next EV. That apart, smartphone maker Xiaomi Technology and Leshi were also planning to investment in the new electric vehicle firm. The new Chinese firm has already established offices in the United States and the Europe.

That is a sign of the gradual shift towards electric vehicles. The entrepreneurs preferred electric vehicle because it is simple to design compared to the traditional cars. That has probably lowered the entry barriers into the automobile industry. On top of these factors, the Chinese government is also providing incentives to promote the production, as well as, the sale of electric vehicles.

First Model To Be Supercar

NextEV spokesperson, Jili Liu, has reportedly said that the first model to be launched by it will be an electric supercar. He expects the supercar to outperform all combustion supercars in the globe. The new firm is also planning to roll out a sportscar next year. The company will design a car to make over 1,000 HP to accelerate to 100 kilometers speed from zero within three seconds. Aside from these, the company is also having an ambitious plan of rolling out high-performance family cars.

For its part, Tesla Motors Inc (NASDAQ:TSLA) is not worried over the new rival to it. In fact, its spokesperson, Ricardo Reyes, welcomed the move and said that its Model S sedan has become a benchmark for others irrespective of the size of such companies. While the company may not worry about another company entering the segment, any top executives leaving it might be a big concern for them. Tesla has always encouraged competition.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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