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Billionaires Investing in China's Electric Cars Face Shakeout
Posted by: Speedy
Date: December 03, 2019 12:32PM
[business.financialpost.com]

“(Bloomberg) — 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 startups raising $18 billion, 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 in order to force automakers to compete on their own, a shakeout is looming that not even the tycoons’ support may be able to prevent, said Rachel Miu, an analyst with DBS Group Holdings Ltd. in Hong Kong. “For the new kids on the block in the EV space, it’s a steep uphill climb,” she said.

Here’s what China’s richest people have to show for their companies’ EV investments:”

>>>

And there is more detail in the article. Doesn’t bode well for Tesla’s China operations. But, IMHO, electric cars are coming in spite of birthing pains, especially in China where far less oil is produced than in the USA.



Saint Cloud, Minnesota, where the weather is wonderful even when it isn't.
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