CAR TYCOONS FACE DAY OF RECKONING AS SALES SLOW

SOME OF China’s wealthiest tycoons steered billions of dollars into electric-car companies in order to fuel the country’s dreams of becoming a leader in the field. Now a reckoning may be looming as car sales slow and the government reduces subsidies for the nascent industry. That leaves the flagship companies of Jack Ma, Pony Ma, Hui Ka Yan and Robin Li facing an increasingly steep path to profitability on their bets that electric vehicles can be smartphones-on-wheels connecting passengers to other businesses. Their capital, along with dozens of start-ups raising $18 billion (R263.2bn), helped inflate an electric bubble that now looks to be in danger of popping. China’s car market is experiencing a prolonged sales slump, prompting EV makers to slash earnings outlooks. With China considering further cuts to the subsidies for consumer purchases to force carmakers to compete on their own, a shake-out is looming that not even the tycoons’ support may be able to prevent, said Rachel Miu, an analyst with DBS Group Holdings in Hong Kong. “For the new kids on the block in the EV space, it’s a steep uphill climb,” she said. Jack Ma stepped down as chairperson of Alibaba Group Holding in September after amassing a $40bn-plus fortune, but China’s richest man retains his board seat – and influence – at the e-commerce emporium he created. Alibaba has participated in several funding rounds for Guangzhou Xiaopeng Motors Technology or Xpeng Motors, including one in 2018 that raised 2.2 billion yuan (R4.55bn) for the carmaker co-founded by former Alibaba executive He Xiaopeng. Xpeng launched its first vehicle, the fiveseat G3 SUV, last year and has sold 11 940 vehicles so far this year, according to compiled data. I Bloomberg