China-based internet company Tencent is teaming with hedge fund Hillhouse Capital to fund an electric vehicle (EV) company called NextEV, Reuters has reported.
NextEV, which will compete against US-based EV producer Tesla Motors in China, is also backed by private investors William Li, Xiang Li and Richard Liu.
The Shanghai-headquartered startup has opened offices in Europe and the US, and its first model, an electric supercar, is expected to launch in 2016. It has also secured the services of executives that previously worked at Tesla, as well as automotive manufacturers Ford, BMW and Volkswagen.
NextEV has not revealed the amount of funding raised so far, but it is also benefiting from support from the Chinese government, according to Reuters. China had already introduced incentives to encourage the manufacturing and purchase of EVs.
There is also substantial potential for crossover with the country’s burgeoning ride sharing industry.
Tencent was among the participants in the $2bn round closed by China-based ride sharing service Didi Kuaidi in July this year, while Hillhouse backed the $1bn round raised by US-based Uber’s Chinese subsidiary last week.
Other China-based firms reportedly interested in making investments in the electric vehicle industry are e-commerce group Alibaba, smartphone maker Xiaomi and online entertainment producer Leshi Internet Information & Technology.
– Photo courtesy of FIA Formula E Championship