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Picture: Singulato is China's latest e-car newcomer to rev up with big fundraising

Tech Talk

ReutersMon, 07 Nov 2016Mon, 07 Nov 2016

A picture shows Singulato Motors' concept car Tigercar P0 at a workshop in Beijing, China, November 7, 2016. (Reuters Photo)

Beijing: Little-known Chinese electric car start-up Singulato Motors is expected to say this week it raised around $600 million in a second fundraising - the latest such move illustrating China's headlong 'gold rush' into all-electric battery cars.

The apparent ease with which Chinese electric car start-ups can raise new funds is largely down to government subsidies and favourable policies. Subsidies can total around 110,000 yuan ($16,285) a car, or around a third of the sticker price of a model such as the BYD e6.

Singulato Motors co-founder and CEO Shen Haiyin poses. (Reuters Photo)

While China today is reminiscent of Detroit in the early 20th century, with a host of new car makers arriving on the scene, Beijing is expected to phase out subsidies from 2020 - potentially crushing the start-ups' survival rate.

China has made a priority of making smart, connected electric cars. Entry barriers are relatively low, and Beijing sees the sector as a way for its auto industry to challenge, and even overtake, established global automakers, several of which have instead focused more on cleaner hydrogen fuel cell propulsion technology.

Singulato Motors co-founder and CEO Shen Haiyin poses. (Reuters Photo)

Shen Haiyin, Beijing-based Singulato's 42-year-old co-founder and CEO, says his company has raised about $700 million in total, much of it from an investment fund run by the municipal government of Tongling City in Anhui province as part of a "strategic partnership".

Tongling city mayor Ni Duping said the decision to invest in Singulato is part of a strategy to promote the new energy automotive industry. "We believe this effort will definitely allow Tongling to accelerate the city's industry transformation," he said in a statement.

A picture shows the back of Singulato Motors'. (Reuters Photo)

The company plans to invest in technology and build what Shen says will be a state-of-the-art electric vehicle (EV) production plant in Tongling capable of making 200,000 cars a year, by around 2020.

The two-year-old start-up, with 140 employees, plans to roll out its first product, a crossover sport utility vehicle, by late next year or early 2018. Production will be outsourced, at least initially, to an existing automaker with excess manufacturing capacity, Shen said.

"We're targeting our EVs at young city dwellers in Beijing, Shanghai, Shenzhen and other large cities where buying a gasoline car is becoming more difficult because of purchase restrictions imposed by the government," Shen told Reuters in his modest office.

A picture shows Singulato Motors' concept car. (Reuters Photo)

"If they buy an EV, they could buy a car immediately as EVs are exempt from purchase restrictions. Tech-savvy young people are naturally going to gravitate toward EVs."

Battling road congestion and air pollution, more Chinese cities are restricting new vehicle purchases - holding auctions and lotteries to sell a limited number of license plates. In Beijing, drivers of gasoline cars are barred from driving on one weekday per week. All-electric battery cars and heavily electrified plug-in hybrids are usually exempt.

A picture shows the interior of Singulato Motors' concept car. (Reuters Photo)

Singulato's fundraising follows an around $1 billion financing deal for another Chinese EV start-up WM Motor, again largely involving a municipal government.

Other well-funded Chinese electric car start-ups include Future Mobility, LeEco's LeSee, Next EV, Ch-Auto's Qiantu Motor, and Changjiang Auto, as well as U.S.-based Chinese-funded start-ups Atieva and Faraday Future.

LeSee, which aims to launch an all-electric luxury car, for example, raised more than $1 billion in a latest financing, mostly from Chinese investors including state-owned enterprises and a local municipality.

A picture shows the interior of Singulato Motors' concept car. (Reuters Photo)

Some 289,000 'new energy' vehicles, including all-electric battery and plug-in electric vehicles, were sold in China in January-September. Full-year sales are likely to fall well short of a 700,000 target, according to a top official at the China Association of Automobile Manufacturers.

Singulato's Shen, who made his money as a tech entrepreneur in Tokyo, plans to aim straight for the electric car mass market rather than follow Tesla Motors' model of first making a high-profile electric battery super sports car to stir up buzz around a new brand.

A picture shows the interior of Singulato Motors' concept car. (Reuters Photo)

Shen declined to elaborate on his pricing strategy beyond saying his cars would compete on price with Tesla's $35,000 Model 3.

For its first model, Singulato has developed in-house the electric propulsion and smart, connected systems, while doors, seats, panels and other basic parts were outsourced to Beijing-based IAT Automobile Technology Co.

For future models, Singulato plans to design, develop and manufacture more on its own, and has been scouting global automakers for talent.

Singulato Motors co-founder and CEO Shen Haiyin poses in his company's concept car. (Reuters Photo)

"Compared to gasoline cars, EVs don't have complex mechanical systems like the engine and transmission. They're much easier to engineer and manufacture," Shen said.

"We think an even bigger differentiator will be how connected and intelligent the car is going to be, and we're focusing on that more than the car itself."

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