The electric vehicle market is currently dominated by Tesla Motors, which reached a market cap this week of $48 billion. But as EV sales grow — Tesla pulled in more than $7 billion in revenue last year and just had its best quarter — there are several EV start-ups aiming to catch Elon Musk's EV company, and they share a common source of support: Chinese investors.
Chinese venture capital investors have poured more than $1.4 billion into electric vehicle and battery start-ups in the past three years, according to PitchBook, compared to $2.1 billion in total global venture capital funding for the sector.
"Tesla has a target on its back, not only from traditional automakers but also these start-ups," said Jeff Schuster, senior vice president at LMC Automotive, an automotive production and sales forecasting company. "But it'll be a challenge. Tesla now has critical mass and funding."
Though far more successful than these start-ups, Tesla does have one thing in common with competitors: the recent investment from China. It received an investment equal to $1.8 billion from Chinese messaging firm Tencent, when it purchased a 5 percent stake in Tesla shares. The investment makes the Chinese giant one of Tesla's largest shareholders, and is part of Tencent's pursuit of self-driving cars and electric vehicles, and it can open doors in China for Tesla.
Its EV rivals also lack one key ingredient: Elon Musk.