Ambitious to encroach into automobile production, Jack Ma and many other Chinese billionaires risk losing billions of dollars when the bubble of electric cars is about to explode.

Tram Ho

Some of the richest tycoons in China have poured billions of dollars into electric car companies in hopes of turning China's dream into a leader in the field. Now, however, the future of those investments is bleak in light of the sharp decline in electric cars sales and the Chinese government's cut back on subsidies for this nascent industry.

Tham vọng lấn sân sang sản xuất ô tô, Jack Ma cùng nhiều tỷ phú Trung Quốc khác có nguy cơ mất trắng hàng tỷ USD khi bong bóng xe ô tô điện sắp nổ tung - Ảnh 1.

That leaves the top companies of Jack Ma, Pony Ma, Hui Ka Yan and Robin Li facing the possibility of losing money with their investments in electric cars – the kind of vehicle that is expected to become. "wheel mounted smartphones" connect passengers with other businesses. Their total capital, along with dozens of startups raised $ 18 billion, caused the balloon of electric cars to inflate and likely burst one day.

Tham vọng lấn sân sang sản xuất ô tô, Jack Ma cùng nhiều tỷ phú Trung Quốc khác có nguy cơ mất trắng hàng tỷ USD khi bong bóng xe ô tô điện sắp nổ tung - Ảnh 2.

A number of large companies in China are "stuck" with electric cars.

The auto market in China is witnessing a prolonged decline in sales, which has led electric vehicle manufacturers to cut profit prospects. At the same time, the Chinese government is considering cutting subsidies for consumer purchases, even the support of billionaires could not be saved. The move was made to encourage manufacturers to compete on their own. That is when the "storm" began to emerge.

Ma stepped down as chairman of Alibaba in September after building a fortune of over $ 40 billion. However, the richest man in China is still sitting on the board chair and has an influence on the e-commerce empire he created. Alibaba took part in a series of funding rounds with Xpeng Motor, including one in 2018, when it raised 2.2 billion yuan ($ 313 million). Co-founder of this car maker is a former Alibaba leader He Xiaopeng.

Xpeng launched its first car, the 5-seater G3 SUV, last year and has sold 11,940 units so far this year.

The company, founded in 2014, is also working with older automakers. A factory built with Haima Automobile can produce 150,000 units per year. Another plant will probably start assembling P7, expected delivery next year.

The journey didn't go smoothly when some engineers at Xpeng allegedly stole documents from old companies in the United States. In March, Tesla sued a former engineer, accusing him of uploading documents, folders and a copy of his personal cloud storage source code before quitting. In addition, an Apple engineer was indicted last year for allegedly stealing a secret of self-driving car production when preparing to take a job at Xpeng. This company is not accused of the above behavior.

The Xpeng side denied any allegations. "We are very tough about investing in our own research and development. Copyright is very important to us."

Alibaba – the second largest shareholder in Xpeng – did not respond to requests for comment.

Xiaomi, a consumer electronics company, has also participated in another round of funding for the company worth $ 400 million.

Tham vọng lấn sân sang sản xuất ô tô, Jack Ma cùng nhiều tỷ phú Trung Quốc khác có nguy cơ mất trắng hàng tỷ USD khi bong bóng xe ô tô điện sắp nổ tung - Ảnh 3.

Tencent's Pony Ma, the company that owns the WeChat app, also made a $ 1 billion investment in NIO in 2017. With more than 26,000 cars sold, NIO is one of the few startups that produce many models. and beat its rival with an impressive IPO in New York last year.

However, NIO is witnessing a cumulative loss and sales declining when the company described as "China's Tesla" spends too much money on advertising and real estate. They sponsor the music show of singer Bruno Mars and open luxury clubs exclusively for NIO car owners. In August, the company opened 19 NIO House within 22 months and the total rental cost accounted for 6.3% of revenue in the 12 months ending in March.

"NIO chose to sell directly and pay special attention to user experience," the company representative said. They have no plans to close existing clubs, nor do they have plans to open new clubs.

NIO's losses reached $ 2.8 billion in the 12 months ending in June with sales of $ 1.2 billion and the stock has plummeted this year. The company cut its workforce by 20% until September when Tencent continued to inject another $ 100 million.

"Our sales have been under pressure since subsidies were cut. There has been a new era where you can only beat customers with the quality of products and services."

One of the most alarming names in the electric vehicle industry is China Evergrande, the real estate giant that claims to be the world's largest manufacturer within 3-5 years – That means they will overtake Tesla. Between September 2018 and June 2019, Evergrande has invested over US $ 3.8 billion in electric vehicle-related companies and will start manufacturing the Hengchi brand next year.

Evergrande – wants to open 10 manufacturing facilities, plans to spend 45 billion yuan on new energy electric vehicles in 2019 – 2021. On November 10, a subsidiary of the company announced it would spend 3 billion USD to increase its stake in National Electric Vehicle Sweden AB to 82% from 68%.

Hui Ka Yan, the chairman and founder of the company, who diversified from football and healthcare, said there was no overlap between the real estate business and the car manufacturing business.

"We do not have any people, technology, experience or car manufacturing facility. How can we compete with centuries-old car manufacturers in the world?"

The answer is … His wallet!

"Regardless of the core technology and which company can buy, we will buy it all," said chairman Hui Ka Yan.

Yet Hui's strategy of acquiring everything could leave Ever grande in a strong deficit. The company's expected spending of 45 billion yuan seems to be too low and in fact it could be more serious.

Tham vọng lấn sân sang sản xuất ô tô, Jack Ma cùng nhiều tỷ phú Trung Quốc khác có nguy cơ mất trắng hàng tỷ USD khi bong bóng xe ô tô điện sắp nổ tung - Ảnh 4.

Baidu CEO.

Robin Li, the CEO of China's leading search company, has poured a lot of money into WM Motor as part of Baidu's ambition. Baidu led the funding round earlier this year to generate 3 billion yuan for a Shanghai-based carmaker to own a 13% stake.

WM released a SUV that will last year and has sold more than 19,000 units. This year, WM sold 14,273 battery-powered SUVs.

WM has an advantage over its competitors when it was not founded by former leaders at internet companies. Founder Freeman Shen once ran Volvo Car in China.

Parent company Volvo, Zhejiang Geely Holdings, has sued WM to pay 2.1 billion yuan for piracy. However, the WM denies all.

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Source : Trí Thức Trẻ/Bloomberg