And probably Chinese.
That, at least, is the vision of Jia Yueting, a billionaire
entrepreneur and one of a new breed of Chinese who see their
technology expertise re-engineering the automobile industry, and
usurping Tesla Motors <TSLA.O>, a U.S. pioneer in premium electric
vehicle (EV) making.
"Tesla's a great company and has taken the global car industry to
the EV era," Jia said in an interview at the Beijing headquarters of
his Le Holdings Co, or LeEco. "But we're not just building a car. We
consider the car a smart mobile device on four wheels, essentially
no different to a cellphone or tablet.
"We hope to surpass Tesla and lead the industry leapfrogging to a
new age," said Jia, wearing a black T-shirt and jeans.
A wave of EV start-ups has emerged in China after the government
opened up the auto industry to deep-pocketed technology firms to
drive a switch to cleaner electric as an eventual alternative to
gasoline cars. Sceptics wonder just how start-ups like LeEco will
deliver on their grand visions.
As a sign of intent, 43-year-old Jia last week unveiled the LeSEE
electric concept supercar, a rival to Tesla's Model S. The "smart,
connected and self-driving" car will be displayed at this week's
"People questioned our idea, a small IT company building a car to
compete with the BMWs <BMWG.DE> and Teslas of the world, and laughed
at us. It wasn't easy, but here we are," Jia told Reuters.
MADE IN NEVADA
LeEco hopes to start producing a version of the LeSEE in a few years
at a plant being built near Las Vegas by U.S. strategic partner
Faraday Future, in which Jia has invested. Those cars would be sold
in the United States and China. Further ahead, the plan is to
produce electric cars in China, too, probably through a partnership
with BAIC Motor <1958.HK>.
The web-connected electric cars will have a "disruptive" pricing
model similar to phones and TV sets LeEco markets in China, Jia
says. His company, often called China's Netflix, will sell movies,
TV shows, music and other content and services to drivers of its
cars. That's why he says "one day our cars will be free."
Nearer-term, the disruption is more likely to be "double the
performance at half the price."
Beyond LeEco, Chinese tech heavyweights including Baidu, Alibaba,
Tencent and Xiaomi [XTC.UL] have funded more than half a dozen EV
start-ups, such as NextEV and CH-Auto. It's widely expected China's
bus, taxi and courier firms will be encouraged to go electric.
"We define our car in a whole new way ... instead of copying Apple
and Tesla," LeEco co-founder and vice chairman Hank Liu told
Reuters. "Our products are not upgraded from those that already
exist. They are revolutionary ... products that never existed
While the entry barrier has been lowered as electric cars are,
mechanically, relatively simpler to produce, skeptics query how
China's start-ups will fund and make tens of thousands of
industry-changing EVs - from design through to procuring the 10,000
or so parts and systems needed for the finished product.
Daimler said Hubertus Troska, head of its Greater China business,
was invited to LeEco last month to get to know the company and its
"I told Mr. Troska we're going to redefine the car," Liu told
Reuters. "EVs for us are just another screen. We see cars in the
future as an extension of the Internet, another entry point for us
to sell web-based content and services."
[to top of second column]
Jia has also had to overcome questions on his funding. In the past
three years, there was speculation he had disappeared and had his
passport confiscated because of his ties to a brother of Ling Jihua,
a high-ranking Communist Party official who was arrested last year
and is under investigation for graft.
Jia says he did not go missing, but was in a California hotel
researching Tesla and recruiting a team to develop EV technologies.
"It was a difficult time for me because we faced a lot of external
rumors and internal turmoil," he said, noting LeEco was then
expanding beyond its streaming, mobile and TV businesses. "(If) any
of those ventures failed, we could have gone belly up,' he said.
To help fund LeEco's EV push, Jia's sister sold her stake in the
company and lent the money to him interest-free. He also sold part
of his own stake.
He said Ling Wancheng, the disgraced official's brother, is a "mere
financial investor" in LeEco; he never met Ling Jihua; and his
passport was never confiscated.
Growing up in a rural Shanxi town in northern China, Jia worked
briefly as a computer technician at a tax office before setting out
on his own, selling computer accessories, and running restaurants
and private schools. Acting on a tip from a relative, he began
selling batteries to power cellphone tower antennas - just as China
Telecom pushed into the rural hinterlands.
In 2003, he drove his used Toyota to Beijing, with 200,000 yuan
(around $31,000 at current rates) in cash, seeking to grow his
Sinotel Technologies business by adding simple mobile video
streaming. He took the company public in Singapore in 2007. With
Liu, he registered what is now LeEco - a group now employing 11,000
people in China, India and the United States. Its listed business
had 2014 revenue of 6.8 billion yuan ($1.05 billion).
Colleagues and friends say Jia is a shrewd businessman, "generous in
picking up the tab for meals" and "never stops working." Forbes
values him at $4.8 billion.
To vault from LeEco's IT background to the auto industry, Jia has
built ties with California-based Atieva and Faraday Future, and has
a partnership with Aston Martin and a cooperative relationship with
Ding Lei, LeEco's auto chief and a former top official at General
Motors' China venture with SAIC Motor, says part of LeEco's
advantage in tomorrow's auto industry is that it carries no baggage
from today's. Traditional automakers are too wedded to combustion
engine technology to quickly jump to electric technology, he
"Look, this disruption can't come from traditional OEMs
(automakers). But a company like us, we can go directly to pure
(Reporting by Norihiko Shirouzu, with additional reporting by Paul
Lienert; Editing by Ian Geoghegan)
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