China Emerging EV Automakers (Part 1): Top 4 Partnering with Major Tech Companies
NIO, Li Auto, Xpeng Motors, WM Motor
|NIO's first autonomous driving EV sedan, ET7 (Source: NIO)|
The China Association of Automobile Manufacturers (CAAM) announced on January 13, 2021 that the production and sales of new energy vehicles (NEVs) in China in 2020 reached a record high. NEV production increased by 7.5% year-over-year (y/y) to 1.366 million units and sales increased by 10.9% to 1.367 million units, turning from negative growth in the previous year to positive growth. In addition, CAAM expects NEV sales to reach 1.8 million units in 2021.
Conversely, the China Automotive News reported that the number of emerging Chinese EV automakers decreased from a peak of more than 100 companies to 40 companies in 2020. Of these, only about 10 companies realized both volume production and actual sales. According to CAAM statistics, a total of about 130,000 units were sold by the 10 China emerging EV automakers from January to November 2020. Of these, NIO, Li Auto, Xpeng, and WM Motor accounted for 80% (100,000 units) of sales.
Currently, three of the top four emerging Chinese EV makers, NIO, Li Auto, and Xpeng Motors, were listed one after another on the U.S. Stock exchange. According to the media, China's emerging EV automakers need significant funding, and one of the reasons why these three companies chose to go public in the U.S. is reportedly because, while the public listing screening process in China is strict, the screening process in the U.S. is relatively easy and the funding environment is good, which can solve the funding shortage they face more quickly. NIO was listed on the New York Stock Exchange on September 12, 2018, becoming the first Chinese emerging EV automaker to be listed in the United States. On July 30, 2020, Li Auto Inc. was listed on the NASDAQ (and changed its name from Leading Ideal Inc.). Less than a month later, Xpeng Motors was also listed on the New York Stock Exchange. Although WM Motor has not been listed yet, the Shanghai Securities Regulatory Commission announced on its website that WM Motor has already completed pre-listing tutoring and is expected to be listed on the Science and Technology Innovation Board (STAR market), China's NASDAQ-style sci-tech innovation board, in 2021.
It is worth noting that the top four emerging Chinese EV automakers are closely associated with major tech companies. IT giant Tencent has been increasing its investment in NIO, increasing its stake to 16.3% in July 2020, making it the second largest shareholder of NIO. After Li Auto went public in July 2020, Mr. Xing WANG, the founder of IT giant Meituan-Dianping, became the largest shareholder of Li Auto. Xpeng Motor has also received financing from Alibaba and Xiaomi. Alibaba was the largest shareholder with a 14.4% stake before the IPO. Xiaomi participated in a series c round of financing in 2019 and has also entered into further strategic alliances. WM Motor entered into a strategic alliance with Baidu in early 2019, and in December 2020, the company announced the W6 intelligent electric SUV, the third model for WM Motor, which was jointly produced on the Apollo platform of Baidu. As of the end of January 2021, Baidu holds a 10.22% stake in WM Motor.
In addition, it was reported that many emerging Chinese EV automakers have been having difficulty surviving since the beginning of 2020. There has been a series of negative news reports on automakers such as Qiantu Motor, REECH, Changjiang Automobile, Singulato, Byton, Saleen, and Bordrin Motors, reports such as the suspension of business operations, bankruptcy, restructuring, and the cessation of production. The global COVID-19 crisis is accelerating the shakeout of brands in the Chinese automotive industry.
This report presents some of the activities at NIO, Li Auto (Leading Ideal), Xpeng Motors, and WM Motor since the second half of 2019.
2020 Chinese market: New vehicle sales down 1.8%, commercial vehicle sales top 5 million units (Feb. 2021)
CES 2021 Round-up: Industry Leaders Still Stood Out at Digital CES (Jan. 2021)
Beijing Motor Show 2020: Emerging Chinese EV Automakers (Oct. 2020年)
NEV Industry Development Plan: China accelerating the sophistication of the NEV industry (Mar. 2020)
China NEV Alliances (Aug. 2019)
NIO：Top Runner among China’s “Emerging Forces” (Apr. 2019)
Automotive Strategies of Alibaba and Tencent (Dec. 2018)
Apollo, Baidu’s Open Autonomous Driving Platform (Dec. 2018)