Singulato expected to announce US$600m fundraising

BEIJING: Little-known Chinese electric car start-up Singulato Motors is expected to say this week it raised around US$600 million (RM2.53 billion) 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 favourable policies. Subsidies can total around 110,000 yuan (RM68,560) 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 carmakers 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 car industry to challenge, and even overtake, established global carmakers, several of which have instead focused more on cleaner hydrogen fuel cell propulsion technology.

Shen Haiyin, Singulato’s cofounder and chief executive officer, said his firm had raised about US$700 million, much of it from a fund run by the municipal government of Tongling City in Anhui province as part of a “strategic partnership”.

Tongling Mayor Ni Duping said the decision to invest in Singulato was 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.”

The firm plans to invest in technology and build what Shen says will be a state-of-the-art electric vehicle production plant in Tongling capable of making 200,000 cars a year, by around 2020. Reuters