Tesla boss Elon Musk is not known for admiring his competition, but when Chinese manufacturer Nio made its 100,000th electric car last week, he offered his congratulations.
It was a mark of respect from a chief executive who had been through “manufacturing hell” with his own company. Yet it is also a sign of the growing influence of China’s electric carmakers. They are hoping to stake out a spot among the heavyweights of the new industry and bring a significant new challenge to Tesla – and to the rest of the automotive industry as it scrambles to catch up.
Tesla mania and cheap money have pushed the market valuations of a clutch of electric carmakers to astonishing levels. Tesla’s value topped $830bn (£600bn) in January (it is now down at about $700bn – still almost three times the size of its nearest rival, Japanese carmaker Toyota).
Chinese rivals Nio, Xpeng and Li Auto have all rapidly risen in value to rival much bigger and longer-established manufacturers – despite having never made an annual profit – on the back of US stock market listings that brought access to retail investors, although their values have fallen steeply from highs earlier this year.
Their fundraising successes have allowed them to pour money into competing with Tesla in China. Now they are eyeing the European electric car market – the biggest in the world.
This would further squeeze legacy carmakers such as Volkswagen, which are trying to rapidly expand electric car production. Premium carmakers including the UK’s Jaguar Land Rover or Germany’s BMW could also lose out if Chinese brands take some of their wealthy customers. Jaguar has pledged go all-electric by 2025 and BMW said last month that half its European sales will be electric by 2030.
China’s government spotted the opportunity to dominate a new sector by giving big subsidies to its electric car industry. The resulting crop of Chinese manufacturers is following the Tesla playbook and it, too, is unencumbered by the costs of winding down internal combustion engine factories, according to Philippe Houchois, automotive analyst at US investment bank Jefferies.
Li Auto, Nio and Xpeng could grow into some of Tesla’s biggest rivals – Reuters reported last month that all three are eyeing listings in Hong Kong. Another Chinese-owned startup, Faraday Future, said in January that it would list in the US via a merger with a special purpose acquisition company (Spac), raising $1bn.
“If you’re Tesla, all of a sudden they are competing on the ground, but they are also competing in access to capital,” Houchois says.
Some Tesla rivals have comparable technology and similarly aspirational brands. Hui Zhang, Nio’s executive vice-president for Europe, told the Observer the luxury carmaker aims to combine elements of Tesla and of Apple, the world’s most successful consumer technology company.
Nio, known as Weilai in its home market, aims to start selling vehicles in Europe later this year. Its factory can currently produce about 120,000 cars a year, significantly fewer than the near-500,000 Tesla made in 2020. Nio avoided bankruptcy in early 2020 when the city of Hefei bailed it out, but it has raised more than $4.5bn in stock and bond offerings in recent months, amid soaring investor demand.
Tesla will have an advantage in Europe when it opens a factory in Berlin as early as this summer, but China’s carmakers have the capital to open production in Europe too. Matthias Schmidt, a Berlin-based automotive analyst, says Chinese manufacturers will have an opportunity while Europe’s giants are eking out profits from their petrol and diesel models, plus hybrids.
“Chinese manufacturers hoping to introduce battery electric vehicles,” says Schmidt, “ have a four-year window in which to gain traction in a market that is to some extent playing with a B team array of electrified products, with limited supply until the end of the first half of the decade.”
Chinese companies are already heavily involved in the electric car boom through lithium ion battery manufacturing. China’s Contemporary Amperex Technology – better known as CATL – is a supplier to Tesla, has a factory in Germany, and last year said it had developed a battery capable of surviving a million miles of driving and recharging.
Another battery maker that also produces electric cars is BYD, backed since 2008 by US investment billionaire Warren Buffett. Shares in the company, listed in Shenzhen, have more than tripled since the start of 2020 – even after falling from record highs at the start of February. It capitalised on investor interest in January, selling stock worth $3.9bn.
Deep-pocketed rivals can spend heavily on technology, which adds to the pressure on Tesla. Nio’s big selling point is that its batteries can be swapped in minutes by robots – removing the threat of range anxiety for drivers of electric vehicles. Xpeng, valued at $24bn, has invested heavily in autonomous driving software, so could rival Tesla through lucrative sales of subscription-based self-driving capabilities. Its P7 sports saloon could target potential buyers of Tesla’s Model 3 and Model S in Europe, rather than the wealthier customers courted by Nio.
Xpeng, chaired by tech entrepreneur He Xiaopeng, has already launched its G3 SUV in Norway –which, thanks to government subsidies, last year became the first country to see sales of electric cars outstrip those of internal combustion engines. Xpeng is now deciding which European markets to target next, its vice chair, Brian Gu, told Automotive News in January.
Analysts have repeatedly cautioned that the electric car industry, from Tesla downwards, is in the midst of a bubble. Yet even if valuations tumble further after recent steep declines, the makers have already enjoyed cheap funding that will allow them to vie for a significant slice of the market.
“Underneath what happens with the stock price, it’s a belief in the electric vehicle industry,” said Nio’s Zhang. “It’s a belief in the business model that a company like Nio or Tesla is trying to strike.”
How they compare
Xpeng P7 Guangzhou-based Xpeng is considering launching its P7 premium saloon in Europe, with downloadable updates to self-driving software. Price 229,900 yuan in China (£25,600) Range 439 miles (according to the relatively lenient NEDC standard)
Nio ET7 A very large battery gives Nio’s saloon a long range and fast acceleration – 3.9 seconds to 62mph – as it goes up against Tesla’s Model S. Price 448,000 yuan (£50,000) Range 621 miles (NEDC)
BYD Tang EV600 Formerly a plug-in hybrid, the battery version of the Tang SUV will be on sale in Norway this year. Price 260,000 yuan (£28,900); Range 373 miles (NEDC)
Tesla Model Y Musk’s seven-seater SUV will be the first off the production line in Berlin. The performance version can manage 0 to 60mph in 3.5 seconds. Price $34,000 (£24,600) Range 303 miles (according to the stricter WLTP standard)
Several key research areas have been identified by NUI Galway to work towards for 2026.
NUI Galway’s recently launched research and innovation strategy includes a €5m investment on support for its multi-disciplinary research teams as they grapple with several global issues.
The strategy, which lays out plans for the university’s next five years of research, focuses on six areas: antimicrobial resistance, decarbonisation, democracy and its future, food security, human-centred data and ocean and coastal health.
“As a public university, we have a special responsibility to direct our research toward the most pressing questions and the most difficult issues,” said to Prof Jim Livesey, VP for research and innovation at NUI Galway.
“As we look into the future, we face uncertainty about the number and nature of challenges we will face, but we know that we will rely on our research capacity as we work together to overcome them,” Livesey added.
The plan focuses on creating the conditions to intensify the quality, scale and scope of research in the university into the future. This includes identifying areas with genuine potential to achieve international recognition for NUI Galway. It also aims to continue to cultivate a supportive and diverse environment within its research community.
NUI Galway has research collaborations with 3,267 international institutions in 114 different countries. The university also has five research institutes on its Galway city campus, including the Data Science Institute, the Whitaker Institute for social change and innovation and the Ryan Institute for marine research.
Its research centres in the medtech area include Science Foundation Ireland’s Cúram and the Corrib Research Centre for Advanced Imaging and Core Lab.
The university will also continue to involve the public with its research and innovation plans through various education and outreach initiatives. It is leading the Public Patient Involvement Ignite network, which it claims, will “bring the public into the heart of research initiatives”.
France has hailed a victory in its long-running quest for fairer action from tech companies after Facebook reached an agreement with a group of national and regional newspapers to pay for content shared by its users.
Facebook on Thursday announced a licensing agreement with the APIG alliance of French national and regional newspapers, which includes Le Parisien and Ouest-France as well as smaller titles. It said this meant “people on Facebook will be able to continue uploading and sharing news stories freely amongst their communities, whilst also ensuring that the copyright of our publishing partners is protected”.
France had been battling for two years to protect the publishing rights and revenue of its press and news agencies against what it termed the domination of powerful tech companies that share news content or show news stories in web searches.
In 2019 France became the first EU country to enact a directive on the publishing rights of media companies and news agencies, called “neighbouring rights”, which required large tech platforms to open talks with publishers seeking remuneration for use of news content. But it has taken long negotiations to reach agreements on paying publishers for content.
No detail was given of the exact amount agreed by Facebook and the APIG.
Pierre Louette, the head of the media group Les Echos-Le Parisien, led the alliance of newspapers who negotiated as a group with Facebook. He said the agreement was “the result of an outspoken and fruitful dialogue between publishers and a leading digital platform”. He said the terms agreed would allow Facebook to implement French law “while generating significant funding” for news publishers, notably the smallest ones.
Other newspapers, such as the national daily Le Monde, have negotiated their own deals in recent months. News agencies have also negotiated separately.
After the 2019 French directive to protect publishers’ rights, a copyright spat raged for more than a year in which French media groups sought to find common ground with international tech firms. Google initially refused to comply, saying media groups already benefited by receiving millions of visits to their websites. News outlets struggling with dwindling print subscriptions complained about not receiving a cut of the millions made from ads displayed alongside news stories, particularly on Google.
But this year Google announced it had reached a draft agreement with the APIG to pay publishers for a selection of content shown in its searches.
Facebook said that besides paying for French content, it would also launch a French news service, Facebook News, in January – a follow-up to similar services in the US and UK – to “give people a dedicated space to access content from trusted and reputable news sources”.
Facebook reached deals with most of Australia’s largest media companies earlier this year. Nine Entertainment, which includes the Sydney Morning Herald and the Age, said in its annual report that it was expecting “strong growth in the short-term” from its deals with Facebook and Google.
British newspapers including the Guardian signed up last year to a programme in which Facebook pays to license articles that appear on a dedicated news section on the social media site. Separately, in July Guardian Australia struck a deal with Facebook to license news content.
Boeing’s CST-100 Starliner capsule, designed to carry astronauts to and from the International Space Station, will not fly until the first half of next year at the earliest, as the manufacturing giant continues to tackle an issue with the spacecraft’s valves.
Things have not gone smoothly for Boeing. Its Starliner program has suffered numerous setbacks and delays. Just in August, a second unmanned test flight was scrapped after 13 of 24 valves in the spacecraft’s propulsion system jammed. In a briefing this week, Michelle Parker, chief engineer of space and launch at Boeing, shed more light on the errant components.
Boeing believes the valves malfunctioned due to weather issues, we were told. Florida, home to NASA’s Kennedy Space Center where the Starliner is being assembled and tested, is known for hot, humid summers. Parker explained that the chemicals from the spacecraft’s oxidizer reacted with water condensation inside the valves to form nitric acid. The acidity corroded the valves, causing them to stick.