China’s Jia Yuet­ing Vows an Elec­tric Race Against Elon Musk

The Economic Times - - Disruption: Startups & Tech -

Norihiko Shirouzu & Paul Lienert

Bei­jing | Detroit: To­mor­row’s cars will be all-elec­tric, self-driv­ing, con­nected to high-speed com­mu­ni­ca­tions net­works... and free. And prob­a­bly Chi­nese.

That, at least, is the vi­sion of Jia Yuet­ing, a bil­lion­aire en­tre­pre­neur and one of a new breed of Chi­nese who see their tech­nol­ogy ex­per­tise re-engi­neer­ing the au­to­mo­bile in­dus­try, and usurp­ing Tesla Mo­tors, a US pi­o­neer in pre­mium elec­tric ve­hi­cle (EV) mak­ing.

“Tesla’s a great com­pany and has taken the global car in­dus­try to the EV era,” Jia said in an in­ter­view at the Bei­jing head­quar­ters of his Le Hold­ings, or LeEco. “But we’re not just build­ing a car. We con­sider the car a smart mo­bile de­vice on four wheels, es­sen­tially no dif­fer­ent from a cell­phone or tablet.”

“We hope to sur­pass Tesla and lead the in­dus­try leapfrog­ging to a new age,” sa- id Jia. A wave of EV star­tups has emerged in China af­ter the govern­ment opened up the auto in­dus­try to deep-pock­eted tech firms to drive a switch to cleaner elec­tric as an even­tual al­ter­na­tive to gaso­line cars. Scep­tics won­der just how star­tups like LeEco will de­liver on their grand vi­sions.

As a sign of in­tent, 43-year-old Jia last week un­veiled the LeSEE elec­tric con­cept su­per­car, a ri­val to Tesla’s Model S. The “smart, con­nected and self-driv­ing” car will be dis­played at this week’s Bei­jing au­toshow. “Peo­ple ques­tioned our idea, a small IT com­pany build­ing a car to com­pete with the BMWs and Tes­las of the world, and laughed at us. It wasn’t easy, but here we are,” Jia said.

MADE IN NE­VADA

LeEco hopes to start pro­duc­ing a ver­sion of the LeSEE in a few years at a plant be­ing built near Las Ve­gas by US strate­gic part­ner Fara­day Fu­ture, in which Jia has in­vested. Those cars would be sold in the US and China. Fur­ther ahead, the plan is to pro­duce elec­tric cars in China, too, prob­a­bly through a part­ner­ship with BAIC Mo­tor.

The web-con­nected elec­tric cars will have a “dis­rup­tive” pric­ing model sim­i­lar to phones and TV sets LeEco mar­kets in China, Jia says. His com­pany, of­ten called China’s Net­flix, will sell movies, TV shows, mu­sic and other con­tent and ser­vices to driv­ers of its cars. That’s why he says, “one day our cars will be free.” Nearer-term, the dis­rup­tion is more likely to be “dou­ble the per­for­mance at half the price”.

“We de­fine our car in a whole new way... in­stead of copy­ing Ap­ple and Tesla,” LeEco co­founder and vice chair­man Hank Liu said. “Our prod­ucts are not up­graded from those that al­ready ex­ist. They are rev­o­lu­tion­ary.”

FUND­ING CLOUDS

While the en­try bar­rier has been low­ered as elec­tric cars are, me­chan­i­cally, rel­a­tively sim­pler to pro­duce, skep­tics query how China’s star­tups will fund and make tens of thou­sands of in­dus­trychang­ing EVs — from de­sign through to procur­ing the 10,000 or so parts and sys­tems needed for the fin­ished prod­uct. Daim­ler said Hu­ber­tus Troska, head of its Greater China busi­ness, was in­vited to LeEco last month to get to know the firm and its busi­ness model. “I told Troska we’re go­ing to re­de­fine the car,” Liu said.

“EVs for us are just an­other screen. We see cars in the fu­ture as an ex­ten­sion of the in­ter­net, an­other en­try point for us to sell web­based con­tent and ser­vices.”

To help fund LeE­cos’ EV push, Jias’ sis­ter sold her stake in the com­pany and lent the money to him in­ter­est-free. He also sold part of his own stake. Ding Lei, LeEco’s auto chief and a for­mer top of­fi­cial at Gen­eral Mo­tors’ China ven­ture with SAIC Mo­tor, says part of LeEco’s ad­van­tage in to­mor­row’s auto in­dus­try is that it car­ries no bag­gage from to­day’s. — Reuters

Make Way for LeSEE

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