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Tesla Motors Inc (TSLA) Faces Increasing Threat From Chinese Challengers

Tesla Inc (TSLA)

Tesla Motors Inc continues to face competition from Chinese companies. Karma Automotive, formerly Fisker Automotive, has revealed a new plug-in hybrid sedan Revero to compete with Tesla’s Model S electric car. Chinese electronics giant LeEco unveiled plans for a $1.8 billion electric vehicle factory in China to produce 400,000 cars per year.

Tesla Motors Inc (TSLA) Model S Update

Karma’s Hybrid Sedan with Solar Panel

Karma Automotive is building the all-new Revero, which will arrive no later than next year’s first quarter, Bloomberg News reported.

The company’s exclusive sports sedan will be able to go about 50 miles (or 80 kilometers) in electric drive before a gasoline engine kicks in, according to Chief Revenue Officer Jim Taylor. The company plans to install a solar panel on the roof to charge the battery.

The Chinese-owned car company plans to sell this its sports sedan to people currently buying the Tesla Model S and other expensive sporty cars. “We think we’re in Tesla’s court,” Taylor told Bloomberg News. “If it was just about style, we would only go head to head with Aston Martin and Maserati. But these buyers are also interested in the technology.”

Los Angeles-based Karma is a reboot of Fisker Automotive, which went bankrupt in 2013. Chinese’s Wanxiang Group bought Fisker’s assets in 2014 and re-launched and renamed the company Karma, the name of Fisker’s first and only car, Market Watch reported.

People can reserve a Revero starting September 8, according to a company spokeswoman said. The company will reveal the car’s suggested price on that date. At this time, Karma isn’t “releasing information on when it will be produced/ sold,” the spokeswoman said.

Karma is planning to use solar panels to charge a production car’s high-voltage battery that powers the motor. Fisker Karma, the predecessor company’s original car, used a solar panel to charge the 12-volt battery that powers lights and other accessories.

$1.8 Billion EV Factory in China

LeEco, which also backs Faraday Future, announced plans to build a $1.8 billion EV factory near the Chinese city of Huzhou. According to the company, the plant will produce 400,000 cars per year, Engadget reported.

The new factory “will be open to all LeEco’s strategic partners including Faraday Future,” CEO Jia Yueting said.

LeEco said that the new plant will focus on producing EV vehicles with connected and self-driving features. The company plans to expand the plant to a $3 billion auto “Eco Experience Park” complete with a theme park, EV facilities and offices.

According to the report, LeEco is interested in strengthening its relations with Faraday Future, which is also building its own $1 billion EV plant in Nevada. Recently, Faraday unveiled plans to build a second plant in Vallejo, California.

Faraday and LeEco wants to compete with Tesla Motors Inc , but they have yet to launch their own electric cars.

Faraday wants to begin selling its first electric car next year, based on its prototype FFZero1 supercar platform. LeEco is working on self-driving versions of its LeSEE.

Tesla $5 Billion Gigafactory

Tesla is finishing construction of its $5 billion Gigafactory in Nevada and ramping up for production next year of a mass market sedan, the Model 3. The automaker spent $117.4 million on the Gigafactory in the first half, and plans to spend a total of about $520 million this year on the construction of the factory. However, the company warned in its previous quarterly filing that the cost of building and operating its Gigafactory could exceed the current expectations.

Recently, Tesla Motors Inc CEO Elon Musk unveiled a Master Plan, which is about expanding electric-vehicle line and selling solar systems. The electric car maker wants to acquire solar panel installer SolarCity Corp for $2.6 billion to achieve its goals.

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