Internet entrepreneurs back Chinese Tesla rival NextEV

Mon Aug 31, 2015 3:02pm EDT
 
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By Edward Taylor and Paul Lienert

FRANKFURT/DETROIT (Reuters) - A group of deep-pocketed China-based internet entrepreneurs and financial investors, including Tencent (0700.HK: Quote) and Hillhouse Capital, is backing an effort to create NextEV, a new rival to U.S. electric car maker Tesla Motors Inc (TSLA.O: Quote).

Hillhouse is also an investor in Uber, the U.S. ride sharing service.The backers have hired ex-Ford Motor Co (F.N: Quote) executive Martin Leach to build a global automaker, a NextEV spokeswoman said on Monday. The backers have also recruited experts with previous experience at Tesla, BMW AG (BMWG.DE: Quote), Volkswagen AG (VOWG_p.DE: Quote) and other major car companies.

The NextEV investors are among several Chinese technology entrepreneurs with little or no automotive background who are hoping to create new electric car companies. The effort is supported by the Chinese government, which recently changed rules to encourage investment by non-automotive companies.

Among the Chinese tech companies that have announced or are considering investments in electric car ventures are Alibaba (BABA.N: Quote), Xiaomi Technology [XTC.UL] and Leshi (300104.SZ: Quote).

Tesla spokesman Ricardo Reyes said on Monday: "We're happy to see other people use the Model S sedan and our business model as benchmarks, whether they are large companies or well-funded startups."

The creation of Shanghai-based NextEV, which has established offices in Europe and the United States, is a sign that a gradual shift toward electric vehicles, which are simpler to design than conventional cars, has lowered the barriers to entry into the auto industry. The Chinese government has also provided generous incentives to encourage production and sale of EVs.

"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."

The sportscar is expected to debut in 2016. It will be designed to produce more than 1,000 horsepower and accelerate from 0 to 100 kilometers an hour (62 miles per hour) within 3 seconds, Liu said. A range of high-performance family cars will follow.   Continued...

 
NEXTEV TCR driver Nelson Piquet of Brazil competes in the Formula E Championship race in central Moscow, Russia, June 6, 2015. REUTERS/Maxim Shemetov