Chinese automaker Changan has tied up with internet giants Tencent and Alibaba to form a RMB 10 billion ($1.45 billion) joint venture to invest in the country’s mobility sector.
Changan’s RMB 1.6 billion investment in the Nanjing-based company, tentatively dubbed Lingxing, gives the automaker just over 16% control of the newly established firm. State-owned First Automotive Works (FAW) and Dongfeng Motor plan to contribute the same amount.
Meanwhile, Chinese internet giants Tencent and Alibaba will spend RMB 2.25 billion together with three investment companies, while retail conglomerate Suning’s investment totals RMB 1.7 billion. Lingxing will establish a mobility firm, which aims to be “the most reliable shared mobility service enterprise” and focus on the deployment of connected new energy vehicles, Changan said in an announcement. Tencent and Alibaba declined to comment when contacted by TechNode.
In a national movement towards a high-value and sustainable economy, Beijing is vigorously promoting electric vehicles (EV) with government subsidies. Each domestic vehicle model with a range of 250 kilometers could be granted subsidies of up to RMB 110,000 in 2016, which was more than halved two years later, though, according to state-owned Securities Daily.
This partly contributed to the boost in sales of EVs, which reached over 1.2 million in 2018, up 60% from the previous year. This number is expected to reach 1.6 million in 2019 as China seeks to gain expertise with home-grown technologies in auto manufacturing and new energy sectors with more resource input.
A number of large Chinese companies are also eyeing the market. Real estate giant Evergrande set up a new energy vehicle company with a registered capital of $2 billion earlier this year. The move came shortly after it split up with embattled EV startup Faraday Future.
Meanwhile, Nanjing-based Suning seeks better ways to expand its ecosystem and be more competitive by collaborating with other parties in mobility, internet, and financial sectors, according to a company response sent to TechNode on Friday.