Auto ‘mile­stone’

LeEco raises $1 bil­lion to bankroll elec­tric sports car de­vel­op­ment

China Daily (USA) - - FRONT PAGE - By MENG JING and DU XIAOYING Con­tact the writer at mengjing@chi­nadaily.com.cn and dux­i­aoy­ing1@ chi­nadaily.com.cn

Chi­nese in­ter­net ma­jor LeEco an­nounced on Tues­day that it has raised $1.08 bil­lion to bankroll the de­vel­op­ment of its elec­tric sports car, a crit­i­cal step to­ward the com­pany’s am­bi­tious goal of pro­duc­ing cars that are more ad­vanced than Tesla Mo­tors Inc’s.

The Bei­jing-based com­pany said in a state­ment that it had com­pleted the ini­tial fundrais­ing round for its so-called Le Su­per­car — an in­ter­net-savvy elec­tric ve­hi­cle — with in­vest­ments from sev­eral Chi­nese com­pa­nies, in­clud­ing Leg­end Hold­ings Corp, Yingda Cap­i­tal Man­age­ment Co and China Min­sheng Trust.

Jia Yuet­ing, founder and chief ex­ec­u­tive of­fi­cer of LeEco, said in the state­ment the com­ple­tion of the fundrais­ing round was a “mile­stone” for the de­vel­op­ment of Le Su­per­car and the amount of the se­cured fund­ing was record-break­ing in the in­ter­na­tional au­to­mo­bile in­dus­try.

Founded in 2004, LeEco started as a video-stream­ing ser­vice provider akin to Net­flix Inc, but it rapidly grew into a heavy­weight with a pres­ence in smart­phones, TVs and most re­cently elec­tronic cars.

The suc­cess of the fundrais­ing came a month after LeEco an­nounced it is to in­vest 20 bil­lion yuan ($3.02 bil­lion) to build an auto park in Zhe­jiang prov­ince, a broad plan in­clud­ing an elec­tric-car plant with an­nual ca­pac­ity of 400,000 units.

In a re­cent in­ter­view with China Daily, Jia said the plant could be put into op­er­a­tion as early as in Spring 2017 and he said the com­pany’s elec­tric cars were ex­pected to go into mass pro­duc­tion within three years.

The suc­cess of the ini­tial fundrais­ing round was an im­por­tant step for LeEco to turn its am­bi­tion into prod­ucts, said Zhang Yu, man­ag­ing di­rec­tor of Au­to­mo­tive Fore­sight Co.

“The $1.08 bil­lion can sup­port the pro­duc­tion of tens of thou­sands units of cars a year,” he es­ti­mated.

How­ever, Le Su­per­car could still face a bumpy road ahead due to the costly in­vest­ment re­quire­ment to build a na­tional wide deal­er­ship net­work to sell cars and brand aware­ness, to lure picky Chi­nese buy­ers, he said.

LeEco is among the ris­ing num­ber of Chi­nese in­ter­net gi­ants that are bet­ting on the fu­ture of in­ter­net-con­nected cars and jump­ing into the au­to­mo­bile mar­ket in or­der to build some­thing big from scratch.

Ac­cord­ing to a Tues­day re­port from the on­line news por­tal run by Ten­cent, LeEco aims to make its elec­tric car en­tity a pub­lic com­pany by the end of 2022, in a busi­ness pro­posal pitched to po­ten­tial in­vestors.

The pro­posal also said that a to­tal of $7.9 bil­lion was ex­pected to be in­vested in the de­vel­op­ment and pro­duc­tion of Le Su­per­car be­tween 2016 and 2022.

Jia Yuet­ing, chief ex­ec­u­tive of­fi­cer of LeEco

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