In recent years, dozens of electric vehicle startups have emerged in China striving to become the Chinese Tesla.
Who will prevail? Keep your eye on Baoneng Investment Group, a Chinese conglomerate that has acquired Qoros Automotive, a company that once had big plans to enter Europe.
Baoneng has humble roots. Incorporated in Shenzhen in 1992, the privately held company started as a vegetable retailer, then diversified into real estate, health care, insurance and auto financing.
Over the past 25 years, Baoneng has achieved tremendous growth.
With personal assets valued at $8.4 billion (55 billion yuan), company founder Yao Zhenhua ranks 11th on Forbes magazine’s list of the richest Chinese citizens.
Yao, 47, grew interested in EVs in 2015 when sales of the vehicles in China began to take off.
That year, his company acquired controlling stakes in two companies: Jonjee Hi-Tech and Guangdong Shaoneng Group. Jonjee makes gears, rear axles and forged metal parts, while a Shaoneng subsidiary supplies electric motors and EV battery cells.
Now Baoneng is jumping into the EV business. Late last year, it signed agreements with the cities of Hangzhou, Kunming and Guangzhou to build EV assembly plants. Over the long term, the three plants will have the capacity to produce up to 1 million vehicles a year.
With its production plans underway, Baoneng still needed engineering expertise and a production license. Well, Qoros solves those problems.
On Dec. 16, Baoneng secured a 51 percent stake in Qoros for 6.6 billion yuan.
Qoros, a 50-50 joint venture between state-owned Chery Automobile and Singaporean investment company Kenon Holdings, has struggled to make money.
In 2016, the company sold only 24,000 vehicles. Qoros has yet to disclose sales for 2017.
The main problem with Qoros is a lack of follow-up investment by its previous owners. There is nothing wrong with its models: a compact sedan and two crossovers.
The company's suppliers are global companies, and its first model, the Qoros 3 compact sedan, earned five stars in a 2013 EuroNCAP safety test, the first China-built model to do so.
Qoros, headquartered in Shanghai, has design and r&d centers in Shanghai and Munich. It also has an assembly plant in the east China city of Changshu that can produce up to 150,000 vehicles a year.
The company also has been designing its first EV, a compact crossover dubbed Model K-EV. Thanks in part to its lightweight carbon-fiber body, the car has a range of 500 kilometers (311 miles) and a maximum speed of 260 km per hour (162 mph).
The Qoros acquisition will allow Baoneng to hedge its bets. At the Dec. 26 groundbreaking ceremony in Guangzhou, Yao said Baoneng will upgrade its gasoline-powered models -- generating some quick cash -- while it readies EVs for the future.
He also declared that Baoneng wants to become a global automaker in 10 to 15 years.
Whether Baoneng can do that remains to be seen. But the company has more resources -- and deeper pockets -- than all those venture-capital startups that have placed an all-or-nothing bet on EVs.