Ten Chinese start-ups battle to be “the new Tesla”
It is thought that at least ten companies in China are currently battling to become “the new Tesla”, with James Chao, Asian auto analyst for IHS Automotive, stating: "The amount of money chasing this idea of being the next Tesla reminds me of the dotcom bubble back in 2000…” This competitive environment is borne out of the fact that China has now become the global leader in electric vehicle sales, selling 320k such vehicles last year helped by ever-more-generous government subsidies. However, Chao points out that the new breed of Chinese start-ups could struggle to catch Tesla at this stage, given Tesla’s considerable head start and “visionary” leader, Elon Musk.

It is the hottest story in the red-hot Chinese auto market. Hundreds of millions of dollars are being spent by venture capital firms and other Chinese companies to create the next Tesla.

"The amount of money chasing this idea of being the next Tesla reminds me of the dotcom bubble back in 2000," said James Chao, who tracks the auto industry in Asia for the consulting firm IHS Automotive.

Jia Yueting, LeEco founder, gestures as he unveils an all-electric battery "concept" car called LeSEE during a ceremony in Beijing, China April 20, 2016. Damir Sagol | Reuters

At least 10 VC firms or companies in China are investing in developing, building and eventually selling an electric car, said Chao. LeEco is one of them.

The Chinese tech company, which used to be known as LeTV, has unveiled an electric autonomous-drive car called LeSEE.

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When LeEco's Jia Yueting walked through the Beijing Auto Show, Chinese reporters swarmed around the 43-year-old CEO, who dressed like Facebook CEO Mark Zuckerberg, wearing a black hoodie zip-up sweater. Yueting readily admits LeEco wants to build on Tesla's legacy.

"Tesla brings the auto industry into the electric era," he said. "Well, Eco wants to bring the industry into the Eco era."

It's easy to see why so many Chinese firms are betting big bucks on electric and autonomous drive cars.

China has already become the largest market in the world for EV sales, with 320,000 electric vehicles, including commercial ones, sold last year, according to IHS Automotive.

Chao said he expects that number will continue to grow because of government subsidies used to spur demand.