New Energy

Latest financial news about New enery in China.
Doug Young has lived and worked in China for 15 years, much of that as a journalist for Reuters specialized about Chinese companies

INTERNET: Tencent in High-Powered Mapping Investment with Europe’s Here

Bottom line: Tencent’s new investment in Nokia’s former mapping unit Here reflects the Chinese herd mentality to pile into new technologies, but also looks like a relatively savvy way to enter the space by pairing with experienced partners.

Tencent ties with mapping giant Here

Internet giant Tencent (HKEx: 700) doesn’t want to be left behind in the race with rivals Baidu (Nasdaq: BIDU) and Alibaba (NYSE: BABA) into self-driving new energy cars that may someday dominate the streets of both China and the world. That appears to be the message from the latest headlines, which have Tencent involved in a somewhat complicated deal that will give it a small stake in a high-powered mapping company that counts car giants BMW, Daimler and Audi as its main investors. Read Full Post…

NEW ENERGY: LeEco Gets Pre-CES Shock with Faraday Defections

Bottom line: The departure of 2 recently hired executives from Faraday Future hints at chaos and uncertainty that has spread from struggling backer LeEco, a situation that only looks set to worsen.

Faraday Future execs depart

Cash-challenged online video company LeEco (Shenzhen: 300104) is getting an early shock in the run-up to the world’s largest consumer electronics show, with word that two top executives have defected from its Faraday Future electric car unit. Anyone reading about these company for the first time is probably scratching his or her head, trying to figure out what exactly online video and electric cars have in common and why a relatively young Internet company like LeEco would be in this business. But that’s exactly the problem. Read Full Post…

VIDEO: Embattled LeEco Sued in HK as Bills Pile Up

Bottom line: A new Hong Kong lawsuit against LeEco by a small creditor over unpaid bills could mark the start of a new wave, which could ultimately snowball into a new crisis as its partners scramble to get back money they’re owed before it’s too late.

HK newspaper sues LeEco for unpaid debt

I’ve been skillfully avoiding writing about the embattled LeEco (Shenzhen: 300104) for the past month, even as the former online video high-flyer landed at the center of a storm that could ultimately result in its downfall. So a small story in the latest headlines, involving a lawsuit against the company over unpaid bills, looks like a good opening to take a quick look at a high-tech tale that consumed the Chinese headlines for much of last month. Read Full Post…

CONSUMER: Embattled Gree Goes Goodwill Hunting with Big Raises

Bottom line: Gree’s new largess to employees with an across-the-board raise is an attempt to win back public good will, following setbacks for chief executive Dong Mingzhu in her attempt to defy shareholder wishes. 

Gree’s Dong Mingzhu offers Christmas largess

I don’t usually write about Gree (Shenzhen: 000651), but an unusual storm of controversy around the home appliance maker nicely summarizes several tendencies that make Chinese companies both entertaining but also frustrating for westerners like myself to observe. The company’s main claims to fame are its air conditioners, and also its colorful chief executive Dong Mingzhu, who is often called China’s most powerful businesswoman.

Dong was doing a bit of goodwill hunting in the latest headlines, with word that Gree has decided to boost wages for all of its 70,000 employees by a 1,000 yuan ($145) each per month, a relatively large figure that probably equates to raises of 10 percent or more. The bigger subtext is that this raise comes after a series of personal setbacks for Dong, making the move look like her attempt to win back public approval and restore confidence in her leadership. Read Full Post…

IPOs: NetEase Media Eyes NY Listing; ZTO, Recurrent Energy Vanish

Bottom line: NetEase could abandon a newly announced New York IPO plan for its media arm if it can find a suitable buyer, while a previously announced New York listing plan by ZTO Express could be revived before year-end.

NetEase news unit makes filing for NY IPO

What’s shaping up as a quiet year for Chinese IPOs in New York has just gotten a small boost, with word that online gaming giant NetEase (NYSE: NTES) has made an initial filing to list its respected but financially-challenged news portal business. Meantime, rumors are building for what’s likely to be one of next year’s biggest offerings from Ant Financial, the financial services affiliate of e-commerce giant Alibaba (NYSE: BABA) and owner of the Alipay e-payments service. But in this case, Ant is shooting down the latest buzz that specific plans are in place for a Hong Kong IPO next year. Read Full Post…

NEW ENERGY: Tesla Takes New China Hit with Driver Death Lawsuit

Bottom line: A Beijing lawsuit against Tesla over an accident that killed the driver of one of its cars is quite possibly baseless, but will add to a recent string of negative publicity for the company and China’s problem-plagued new energy vehicle sector.

Tesla sued over driver death in China

Electric car maker Tesla (Nasdaq: TLSA) is in the negative headlines in China driving into the new week, following reports of a Beijing lawsuit against the company over the death of a driver of one of its cars. I’ll be quite direct and say that the lawsuit looks a bit dubious and perhaps unrelated to Tesla’s technology, though it’s also possible that Tesla’s carefully worded statement is designed to give that impression. But even if the lawsuit is baseless, this kind of negative headline is the last thing that Tesla needs in a problem-plagued market that it once hoped would fuel its difficult drive into profitability. Read Full Post…

NEW ENERGY: New Energy Car Cheats Deserve Strict Punishment

Bottom line: Beijing should mete out stiff punishment, including big fines and jail sentences, for companies that fraudulently obtained subsidies under the government’s program to promote new energy vehicle development.

Chery accused of fraud in new energy car scandal

What started as a wave of criticism against new energy car makers for producing mediocre products that nobody wanted is rapidly becoming a major scandal, with reports that many of those companies submitted fake information in order to get lucrative government subsidies. The scandal netted major car makers King Long and Chery last week, and reports have emerged that even industry leader BYD (HKEx: 1211; Shenzhen: 002594 )may be suspected of illegally obtaining government grants.

Such trickery is an extension of another trend that sees Chinese companies rush into unfamiliar sectors that Beijing has targeted for development, often resulting in a flood of mediocre or inferior products into the market. Such rushes not only create big market disruptions, but also result in huge sums of wasted investment and slow down development of emerging industries. Read Full Post…

NEW ENERGY: Reports Point to Failure of China’s EV, Green Power Policies

Bottom line: New reports detailing big amounts of idle wind and solar plants, and Beijing’s plans for a new EV incentive scheme, reflect wasteful spending under earlier development plans, the result of China’s rush to quickly develop the new energy sectors.

Huge volumes of China solar, wind plants sit idle

Two new reports are shining a spotlight on the failure of China’s efforts to promote new energy through the construction of wind and solar power plants, and to put more hybrid and electric vehicles (EVs) on the road. Neither report will come as a huge surprise, since the failure of both efforts has been widely reported this year. But they both highlight how cutting-edge industries promoted by Beijing often attract participants more interested in getting generous government subsidies than actually building anything of value.  Read Full Post…

NEW ENERGY: Geely Dumps EVs, BYD Wins Back Shenzhen

Bottom line: Geely’s sale of its EV joint venture stakes to its parent company, and BYD’s reinstatement of a major electric bus order from its hometown government, underscore how reliant the industry is on government support for its survival.

Shenzhen reinstates big electric bus order for BYD

A couple of electric vehicle (EV) stories are in the headlines, spotlighting just how dependent the sector is on government subsidies for its survival in China. I’ve written about this over-reliance on state-support frequently, including just last week when a government report said the sector had become bloated with mediocre players without any chance for commercial success. (previous post) Both of the latest headlines reinforce that theme, including one from smaller player Geely (HKEx: 175) and the other from stalwart BYD (HKEx: 1211; Shenzhen: 002594). Read Full Post…

NEW ENERGY: BYD Waters Down Buffett, Welcomes Samsung

Bottom line: BYD’s latest new share issue, including a sale to Samsung, reflects a dire need for cash as its electric vehicles fail to gain traction, and could be followed by more fund raising in the next 12 months.

BYD issues more new shares

Sputtering electric car maker BYD (HKEx: 1211; Shenzhen: 002594) is making some big adjustments in a bid stabilize its financial footing, with word of a major new share sale that includes the addition of Korea’s Samsung (Seoul: 005930) as a stakeholder. At the same time, that same new share issue has further diluted one of the company’s oldest and most loyal stakeholders, US billionaire investor Warren Buffett. Following this latest shift, Buffett’s holdings in the company are about half of what they were when he first purchased nearly 10 percent of BYD in 2008, when it looked poised to become a new energy car superstar. Read Full Post…

NEW ENERGY: Inferior Cars, Corruption Plague China EV Sector

Bottom line: Beijing needs to overhaul its new energy vehicle policies to reward companies that truly innovate and manufacture cars that buyers are really driving.

BYD loses bulk of big bus order

A series of headlines last week showed how fat and even corrupt China’s booming electric vehicle (EV) sector has become in a very short time, spotlighting an urgent need for reform. The sector’s rapid evolution to its current state repeats a familiar pattern, which sees huge amounts of wasted investment and other inefficiencies emerge when local governments and inexperienced companies flock to industries targeted by Beijing for rapid development. Read Full Post…