One of China’s top venture capital-backed EV startups is nowhere to be seen

Still at concept stage?
Still at concept stage?
Image: Screengrab/Youxia Motors
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Youxia Motors, one of the earliest companies to arise out of China’s 2014 electric vehicles startup boom, racked up some of the biggest venture-capital deals in the sector. Now it’s curiously out of sight.

A little over a year ago, it closed an $800 million fundraising round, the fourth highest single investment deal since 2014 in the industry, according to data from Seattle-based research company PitchBook. As of October, the company was valued at $3.3 billion (link in Chinese), local financial news portal Sina reported. The Shanghai-based company’s founder Huang Xiuyuan positioned the company as the Tesla of China (link in Chinese)—as did many other Chinese EV startups.

Yet as of today, the five-year-old company hasn’t made any deliveries, though it set a goal to sell 30,000 units by 2020 (link in Chinese).

It isn’t the only one in this situation. China’s EV industry is facing a major transition—next week subsidies to manufacturers will be slashed in half. And electric carmakers are also starting to face pressure on sales amid an overall slowdown of the auto market. EV sales are still growing, but in low single-digits compared to the same period last year. VC funding is also drying up—and many startups are expected to fail.

Youxia, which means “ranger,” announced its plans for its EV passenger car Youxia X in 2015. The same year, it was acquired by (link in Chinese) Xituo Industry Group, a Chinese firm that focuses on bioenergy and electricity. Xituo’s chairman Wei Jun has since been the chairman of Youxia.

The carmaker told Chinese tech publication 36kr (link in Chinese) last March that the car would use battery cells from Korean battery maker LG Chem, as well as Japanese battery firm Panasonic, which also powers Tesla’s models. Youxia said it’s been building its own factory in eastern Zhejiang province since April 2017, capable of manufacturing 200,000 units (link in Chinese), and that it would be completed by May this year. It’s unclear what stage it’s at.

Youxia said it’s no longer releasing a product for mass production by the end of this year. Instead, it told Quartz it is revamping its product release schedule, and plans to roll out multiple new models. It also plans to open showrooms in 10 cities starting early next year, where customers will be able to see cars and book test drives, adding that delivery would begin within six months of a model’s launch.

“There will be a ramping up process in mass production and delivery. Compared with other peer car startups, Youxia has chosen to build its own factory,” said Youxia. ” The production capacity and delivery will take a certain period of time.”

Youxia’s situation is in strong contrast with other peers with similar levels of funding.

Weltmeister, also known as WM Motor, attracted the top two investment deals according to PitchBook’s data. The company is backed by two Chinese tech giants—search giant Baidu and gaming and social media firm Tencent. It has delivered around 4,000 units (link in Chinese) of its flagship sports utility vehicle EX5 in the first quarter of 2019. In March, the carmaker also closed another round of fundraising of $450 million, led by Baidu.

NIO, a Shanghai-based carmaker that went public in New York in September, has delivered more than 15,000 units of the ES8, its flagship SUV since then. Xpeng Motors, valued at $3.6 billion, has also delivered more than 5,500 units (link in Chinese).

Update, June 24: The article has been updated with a statement from Youxia.

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