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Tesla Motors Inc (NASDAQ:TSLA) Chinese Rival Builds Cash Buttress

Elon Musk Tesla Motors Inc (TSLA) and SolarCity Corp (SCTY)

One of Tesla Motors Inc Chinese rival looks very determined to beat the US firm. This China-based electric car startup is seeking $1bn to fulfill its ambitions of competing with Tesla Motors, and has succeeded in raising half the amount.

Elon Musk Tesla Motors Inc earnings

NextEv to compete on both, features and price

NextEV was set up by William Li and a group of internet entrepreneurs last year with plans of making affordable, connected green cars. It has roped in investors including Sequoia Capital, Joy Capital, Tencent Holdings and Hillhouse Capital for that purpose.

The firm aims to roll-out a supercar model in 2016, matching the ‘Ludicrous’ speed mode of Tesla Model S. In a phone interview to Bloomberg, Li said the firm plans to outsource production to the traditional auto makers.

Li, who is also the chairman of car-pricing portal Bitauto Holdings, said “Talking big is pointless. We develop the car purely from the angle of consumers. We most value what they would like the car to be. We want them to experience sheer pleasure of driving our car.”

Besides the supercar, NextEV also plans to offer mass-market models, priced at less than half of Tesla Motors Inc Model S, which has a starting price of 620,000 Yuan ($97,000) in China, says the report.

The Chinese govt. encourages manufacturing electric cars, and upgrading of traditional manufacturing industries. The investors and internet firms see huge potential in these areas, owing to which a number of start-ups have sprouted in China in the past year.

Luxury carmakers targeting Tesla

Apart from NextEV, Tesla also faces threat from many known brands. At the Frankfurt Motor Show this week, the concept car for Porsche Mission E will make its debut. This car can punch out more than 600-horsepower, which is higher than the familiar 911 model of the firm. This will help the car to go from 0 to 60 in just 3 seconds.

Audi is also showing off the new e-tron Quattro SUV concept at the auto show. This vehicle is slightly slower, but in one charge can run more than 300 miles, says NBS News. Apart from these, many more luxury car makers are showing production or concept battery-electric vehicles. This could mean trouble for Tesla Motors Inc , which for now has found a surprisingly strong niche for electric vehicles among luxury buyers.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.

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