Singulato is China's latest e-car newcomer to rev up with big fundraising
Singulato is China's latest e-car newcomer to rev up with big fundraising
Little-known
Chinese electric car start-up Singulato Motors is expected to say this
week it raised around $600 million in a second fundraising - the latest
such move illustrating China's headlong 'gold rush' into all-electric
battery cars. The
apparent ease with which Chinese electric car start-ups can raise new
funds is largely down to government subsidies and favorable policies.
Subsidies can total around 110,000 yuan ($16,285) a car, or around a
third of the sticker price of a model such as the BYD e6. While
China today is reminiscent of Detroit in the early 20th century, with a
host of new car makers arriving on the scene, Beijing is expected to
phase out subsidies from 2020 - potentially crushing the start-ups'
survival rate. China has
made a priority of making smart, connected electric cars. Entry barriers
are relatively low, and Beijing sees the sector as a way for its auto
industry to challenge, and even overtake, established global automakers,
several of which have instead focused more on cleaner hydrogen fuel
cell propulsion technology. Shen
Haiyin, Beijing-based Singulato's 42-year-old co-founder and CEO, says
his company has raised about $700 million in total, much of it from an
investment fund run by the municipal government of Tongling City in
Anhui province as part of a "strategic partnership". Tongling
city mayor Ni Duping said the decision to invest in Singulato is part
of a strategy to promote the new energy automotive industry. "We believe
this effort will definitely allow Tongling to accelerate the city's
industry transformation," he said in a statement. The
company plans to invest in technology and build what Shen says will be a
state-of-the-art electric vehicle (EV) production plant in Tongling
capable of making 200,000 cars a year, by around 2020. The
two-year-old start-up, with 140 employees, plans to roll out its first
product, a crossover sport utility vehicle, by late next year or early
2018. Production will be outsourced, at least initially, to an existing
automaker with excess manufacturing capacity, Shen said. "We're
targeting our EVs at young city dwellers in Beijing, Shanghai, Shenzhen
and other large cities where buying a gasoline car is becoming more
difficult because of purchase restrictions imposed by the government,"
Shen told Reuters in his modest office. "If
they buy an EV, they could buy a car immediately as EVs are exempt from
purchase restrictions. Tech-savvy young people are naturally going to
gravitate toward EVs." Battling
road congestion and air pollution, more Chinese cities are restricting
new vehicle purchases - holding auctions and lotteries to sell a limited
number of license plates. In Beijing, drivers of gasoline cars are
barred from driving on one weekday per week. All-electric battery cars
and heavily electrified plug-in hybrids are usually exempt. EASY MONEY Singulato's
fundraising follows an around $1 billion financing deal for another
Chinese EV start-up WM Motor, again largely involving a
municipal government. Other well-funded Chinese
electric car start-ups include Future Mobility, LeEco's LeSee, Next EV,
Ch-Auto's Qiantu Motor, and Changjiang Auto, as well as U.S.-based
Chinese-funded start-ups Atieva and Faraday Future. LeSee,
which aims to launch an all-electric luxury car, for example, raised
more than $1 billion in a latest financing, mostly from Chinese
investors including state-owned enterprises and a local municipality. Some
289,000 'new energy' vehicles, including all-electric battery and
plug-in electric vehicles, were sold in China in January-September.
Full-year sales are likely to fall well short of a 700,000 target,
according to a top official at the China Association of Automobile
Manufacturers. MOVING IN-HOUSE
Singulato's Shen, who made his money as a tech entrepreneur in Tokyo, plans to aim straight for the electric car mass market rather than follow Tesla Motors' model of first making a high-profile electric battery super sports car to stir up buzz around a new brand.
Shen declined to elaborate on his pricing strategy beyond saying his cars would compete on price with Tesla's $35,000 Model 3.
For its first model, Singulato has developed in-house the electric propulsion and smart, connected systems, while doors, seats, panels and other basic parts were outsourced to Beijing-based IAT Automobile Technology Co.
For future models, Singulato plans to design, develop and manufacture more on its own, and has been scouting global automakers for talent.
"Compared to gasoline cars, EVs don't have complex mechanical systems like the engine and transmission. They're much easier to engineer and manufacture," Shen said.
"We think an even bigger differentiator will be how connected and intelligent the car is going to be, and we're focusing on that more than the car itself."
($1 = 6.7545 Chinese yuan renminbi
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