The 'Elon Musk of China' explains why its 'Tesla killer' won't fall into the same trap as troubled electric car startup Faraday Future
- Nio founder William Li is often compared to Tesla founder Elon Musk for his push to create self-driving electric automobiles.
- Li says that Nio is in better shape than its Chinese competitors like Faraday Future, Byton, and WM Motors because of its deep-pocketed investors.
- Nio has raised over $1 billion in investments from some of China's biggest companies in the banking and tech industries.
Nio, an electric car startup seen as a major competitor to Tesla in China, has learned from the mistakes of other startups in the sector, billionaire founder William Li told Business Insider during a recent interview at the Beijing Auto Show.
In December, Nio launched its first production car, the ES8, a seven-seat electric SUV with 220 miles of range.The company plans to bring a self-driving electric car to the US by 2020.
But Chinese electric car startups have made big promises before, with mixed results. Electric car startup Faraday Future, backed by Chinese billionaire Jia Yueting, made a major appearance at CES 2016 with its autonomous FF91 prototype. Two years later, the company was out of money and in shambles.
Li told Business Insider that Nio has learned from its Chinese competitors' forays into the market.
"From day one, I knew that it's a capital-intensive market, so we need to make sure we can expand Nio's friends circle to have a lot of investors to invest in us," Li said. "Nio investors are qualified long term investors, so we think in terms of capital, it will not be very difficult to raise money."
Nio, according to Li, has around 56 investors. The company's investors include Chinese tech giants Tencent, Baidu, and Xiaomi, as well as investment firms like U.S. hedge fund Lone Pine Capital, Chinese investment firm CITIC Capital, Hillhouse Capital Group, and Sequoia Capital.
The company plans to go public later this year on the New York Stock Exchange with a goal of raising $2 billion for an expected valuation of $15 billion.
Li said that Faraday Future failed because it strayed too far from its main purpose as car manufacturers. He said that the company "entered multiple industries with a very fierce competition. That is why it kind of diluted their focus," Li said.
"For us, it's different because we just focus on the automotive industry," Li said.
Faraday Future became known for "unpaid bills, lawsuits, an employee exodus, and public bickering with former executives," according to Business Insider's Bryan Logan, though the company has tried to turn over a new leaf this year after a $1.5 billion cash infusion.