October 8, 2016 1:40 am JST

Electric-car makers look to cash in on Formula E

JOYCE HO, Nikkei staff writer

Tesla showcased its Model X in upscale mall Pacific Place in Hong Kong. (Photo by Joyce Ho)

HONG KONG -- Electric-vehicle companies from around the world are showcasing their technology in Hong Kong this week, as the third season of the FIA Formula E Championship, a worldwide racing series for fully electric autos, kicks off on the street circuit in the heart of the city's business district this Saturday.

Two such automakers are Californian startup Faraday Future and strategic investment partner Beijing-based Leshi Internet Information & Technology, more widely known as LeEco, which are sponsoring one of the 10 competing teams, Dragon Racing. Dragon Racing is led by media entrepreneur Jay Penske, Daniel Loeb of hedge fund Third Point and Chad Hurley, co-founder of video-streaming platform YouTube.

Still in the process of developing its first automobile for everyday use, two-year-old Faraday Future said on Thursday that it would provide technical support to Dragon Racing under a four-year partnership, while being the team's title sponsor. 

"We are working in the areas of hardware and software. In the future, we'll have some contribution to the powertrain ... and dynamics of the battery," Marco Mattiacci, Faraday Future's global chief brand and commercial officer, told the Nikkei Asian Review.

The collaboration has room to grow, with Faraday Future providing software solutions to the racing car this year, before moving to hardware supply next season. It will not deliver powertrain components such as motors, gearboxes, and power inverters until the championship's fifth season in 2018-2019. 

Mattiacci said the participation in Formula E is strategic to both Faraday Future and LeEco. For Faraday, the event serves as "a laboratory" for testing the technology that could be integrated into its mass-produced car, for which he currently cannot give a launch date. For its Chinese patron, which is primarily a copyrighted entertainment content provider, there is potential in growing and capitalizing the motorsport platform.

"LeEco gives its full support towards Faraday Future Dragon Racing, and believes in the future of Formula E," said Ding Lei, LeEco's vice-chairman, in a statement. "We look forward to working closely with Formula E in this new and exciting motorsport," said Lei. Formula E is chaired by Spanish businessman Alejandro Agag.

LeEco, which secured $1.08 billion of investment to build its own electric sports car in September, declined to comment on whether they are also working with LG Chem, South Korea's largest chemicals company, which had recently agreed to produce lithium-ion batteries for Faraday Future's vehicles in a deal that is reportedly worth $2.4 billion.

While bankrolling Faraday Future to build a $1 billion factory to produce 140,000 vehicles per year in North Las Vegas in Nevada and poaching talent from rivals, the Chinese company founded by billionaire Jia Yueting is also establishing a $1.8 billion facility near the eastern Chinese city of Hangzhou to support annual production of 400,000 cars in the next couple of years. 

The factory will be part of LeEco's larger project, "Eco Experience Park," which also accommodates a theme park and amenities for internet-connected cars and offices. 

On Wednesday EV market leader Tesla launched its Model X series in Hong Kong, where its Model S sedan's sales have multiplied in two years. Of the 5,481 electric-car licenses issued by Hong Kong's Transport Department as of July, around 80% are associated with Tesla, thanks to the tax incentive and relatively low concern over the vehicle's range that the compact city offers. There were only 1,160 such licenses registered in December 2014 when the Model S went on sale.

The California-based company said the Model X, which has eye-catching "falcon-wing" doors, is designed to be a family-friendly sport utility vehicle seating up to seven people. Compared to the Model S, the similar-looking Model X comes with a heftier price tag of around 610,200 Hong Kong dollars ($78,654). Deliveries are expected to begin in late 2016 or early 2017. 

On Thursday Detroit Electric, a brand revived by Albert Lam, who previously oversaw Britain's Lotus Engineering Group and Apple Computer's Asia operation, also unveiled its vehicle, the pure-electric SP:01 model, manufactured in Leamington Spa in the U.K.

The company said the car could release its stored electrical energy to power a home for two days. It appointed Darryl O'Young, a three-time Macau Grand Prix champion, to perform an on-track demonstration of the two-seater sports car at the Hong Kong ePrix circuit on Saturday afternoon. 

Hong Kong-based Jowett Motors, the sole distributor of the SP:01, said it is not looking to unseat Tesla as it is targeting a different market segment. "The model will be sold for at least 1 million Hong Kong dollars," Jowett Motors's owner Richard Lee told reporters. Lee, who also distributed Ferrari and Maserati in Hong Kong and Macau under the company Auto Italia, said prospective customers in the region have been eagerly anticipating the car's arrival.

"We have received a lot of enquiries regarding SP:01," said Lee. But he emphasized that volumes will be limited as the vehicle is built to order, with a delivery time of several months.

Asia300

Leshi Internet Information & Technology Corp. Beijing

China

Market(Ticker): SHE(300104)
Sector:
Industry:
Technology Services
Information Technology Services
Market cap(USD): 9,308.81M
Shares: 3,989.44M
Asia300

LG Chem Ltd.

South Korea

Market(Ticker): KRX(051910)
Sector:
Industry:
Process Industries
Chemicals: Specialty
Market cap(USD): 26,099.96M
Shares: 78.28M

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