Tesla Effect Is Helping Chinese EV Makers Take Off

The enormous growth that Tesla is experiencing, especially in its market value, has fueled investor optimism about the electric car. Chinese startups are taking advantage of this dynamic caused by the American manufacturer to attract the money necessary to take off.

New brands that have focused all their efforts on electric models, such as NIO, XPeng, Li Auto, and WM Motor, have raised more than 8 million dollars in their IPO. A path that will shortly be followed by another of the protagonists, Airways, which, as we remember, is already in Europe and whose president has confirmed the preparations to begin its listing.

Some initiatives that have managed to take advantage of both the dynamics of Tesla, as well as the favorable ecosystem that the Chinese government has created by spreading public money. Both the startup and the sales of these models that are now preparing to launch into the international market of the hand of some competitive products and with a lot of potential economically.

This dynamic will even favor those startups that have run out of energy along the way. Initiatives such as Byton, which is restructuring its organization, or Singulato, which operates at medium gas, waiting for new injections that will allow it to complete the development of its two new models, will see how fundraising is now easier than a year ago.

A time where Tesla shares have multiplied their value by almost 10, which will favor the plans of some brands that have also seen production costs fall and demand increase exponentially.

An increase in demand that fuels investor optimism regarding electric car manufacturers. For example, the consulting firm LMC Automotive expects electricity sales in China to fall 8.9% this year due to the pandemic factors. But the prospects are excellent, and they estimate that in 2021 registrations will rebound with an increase of 48% to reach 1.52 million units or a market share of 7%.

A growth that will allow them to attract more funds to feed their capacities to export to other markets, such as Europe, where the electricity demand has also experienced strong growth this year due to the increase in supply, the implementation of essential plans for public aid, and the increased awareness of many of the problems of traffic pollution in cities.

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