Mega Financing Rounds Affirm China Is the Center of the Electric Vehicle World



There are thousands and thousands of electric vehicles on the roads across the U.S. and the European Union, along with endless information of American EV manufacturer Tesla's latest moves. But the reality is that China is the center of the battery and electric transport world. This can be borne out from the sheer volume of funds being set up in the greatest EV marketplace in the world, a marketplace that found 579,000 electric passenger cars last year sold.

With the caveat that the battery and EV claims demand some skepticism, here are a few recent EV occasions in China.

Farasis gets $1 billion in funding?

Having a claim of over 3,000 employees and a manufacturing base in China, lithium-ion battery builder Farasis Energy claims that it has procured over $1 billion in a”C round” of funding from undisclosed investors to open a large scale European battery production facility. There were unsubstantiated reports of a $790 million financing round from investors this year.

Farasis has won millions in Small Business Innovation Research (SBIR) awards for novel lithium-ion chemistries and asserts that it has “often ranked first in terms of shipments of NCM-based ion pouch cells to the Chinese automotive industry.”

The company has not responded to email and phone inquiries to date.   

Nio's $1 billion IPO

Chinese EV startup Nio, helmed by former Cisco CTO Padmasree Warrior, was looking to raise $1.8 billion on the NYSE, but the IPO came up short, raising $1 billion at a share price of $6.25. The stock has seen some gains since the IPO, but was hit hard this week by President Trump's tariff threats.

Note that Nio has raised $1 billion, and as of a few weeks ago, had delivered just 481 SUVs, while receiving deposits for more than 17,000.  The company just started delivering its first volume-manufactured vehicle, an SUV, with a driving range of 220 miles, along with a price of $70,000 prior to incentives. Nio is developing a smaller SUV for delivery in 2019.

Nio is building its SUV in an arrangement with Jianghuai Automobile Group, a large state-owned automobile builder in China, and so scaling manufacturing volume is less of a challenge than it might be for other startups.  The company uses lithium-ion batteries from a number of suppliers and plans to offer battery-swapping options and some measure of autonomous driving.

This is an early-stage company that is going to continue to lose enormous sums of money over the coming quarters, as well as require massive investments in manufacturing and R&D. Nio lost $758 million in 2017 and has lost $502.5 million this year so far, while generating just $6.9 million in revenue. All of this business is from China.

The EV builder is based in Shanghai, but employs 520 people at its San Jose, Calif.. U.S. headquarters. Nio plans go after the U.S. EV market after it has established itself at home.

Total dominance in electric buses

Here's a shocking stat in a report from Bloomberg New Energy Finance: There are almost 400,000 electric buses deployed globally and 99 percent of them are in China.

BNEF forecasts that by 2040, 80 percent of the world's municipal buses will be electric and that the imminent transition to electric will be”as quickly as the distribution chain and also charging infrastructure enables.”

China wants Chile's lithium resources

Although the financial and regulatory details are murky, Tianqi, China’s largest producer of battery-grade lithium, is looking to publicly list on a Hong Kong bourse in order to finance a $4 billion stake in Chilean lithium developer SQM, according to a prospectus and reporting in The Financial Times. Tianqi still needs trust-related regulatory approval for the acquisition.

Demand for lithium is set to grow substantially in the coming years, driven by the electrification of transportation — although lithium producers have seen a decline in share price due to oversupply worries.  

DOJ looks for fraud in Musk's 420 tweets

Tesla might be paying a large price for undisciplined tweets from CEO Elon Musk.

Bloomberg reports that Tesla and Elon Musk are facing a criminal investigation for fraud, following the CEO's tweet last month claiming that he had”funding procured” from the Saudi sovereign wealth fund in a go-private effort at $420 per share. Bloomberg notes that Tesla is also under civil investigation by the SEC for that same tweet.

Tesla responded with a statement:”Last month, after Elon's announcement that he was thinking about taking the company private, Tesla obtained a voluntary request for files from the DOJ and was cooperative in responding to it. We’ve not obtained a request for testimony a subpoena, or some other formal procedure. We respect the DOJ's desire to find details about this and feel that the matter ought to be quickly resolved as they review the information they’ve received.”

Tesla's inventory is up 3.2 percent over the awful news.

Funding procured from PIF for Lucid Motors

Lucid Motors was originally called Atieva and started out from 2007 as a battery pack programmer with a founder by Tesla and VC financing from Venrock. The company eventually pivoted to becoming a superior EV builder with gigantic funding from Beijing’s China Environment Fund, Mitsui & Co., Jafco along with Beijing Automotive Industry Holding.

Following a range of near-death experiences and flaws, Lucid Motors has finally procured over $1 billion from Saudi Arabia’s Public Investment Fund to finance the launching of the its first EV, the Lucid Air. The financing will be utilized to construct its factory from Casa Grande, Arizona and complete development and testing of its first version — using launching targeted for 2020, according to a statement from the company.   

Lucid's $1 billion comes from the Saudi fund that Elon Musk asserted would help take Tesla private in last month criminal tweet. 

Watch out for if the Chinese fabricating system begins to crank out electrical vehicles and do what it’s best (and what Tesla is struggling with), which is the ability to scale to enormous volumes. Expect a flood of intelligent EVs in China's BAIC, BYD, Cherry, Geely, Zhidou, Hawtai and Zotyeto name Only a few.   


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