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China pivots from internet to building EV batteries/cars?

Never heard of BYD? They produce more EV cars than any auto manufacturer in the world. Including Telsa.

Electric Cars Power China’s Economic Hopes as Internet Titans Take a Back Seat

Investors and talent pile into China’s EV and battery industries that are increasingly engines of country’s growth

By Clarence Leong, Liza Lin and Rachel Liang, WSJ

Updated Sept. 4, 2023 12:00 am ET

SINGAPORE—China’s internet giants drove much of the country’s tech economy over the past decade. Now, electric-vehicle and battery makers are taking over the driver’s seat.

The country’s booming new industry flag-bearers are attracting sovereign-wealth funds, foreign partners and the brightest engineers. Riding the wave of Beijing’s industrial policy gambit on clean-energy cars, they are defying the gloomy picture in much of China’s economy and increasingly going global.

China’s EV-related startups, including battery makers, pulled in $15.2 billion in venture capital last year, a record for the sector even as total venture capital financing in the country fell to its lowest since 2019, data from investment researcher Preqin shows. Vehicle and battery exports have been rising, while car buyers are critical to cushioning the country’s sagging consumer economy.

Automakers have bagged funding from German car manufacturer Volkswagen and Intel, and many are rapidly expanding. BYD, China’s top-selling EV maker backed by billionaire investor Warren Buffett, boosted head count by over 50% to more than 630,000 in the 12 months to June.

The hiring and investment are a rare bright spot for China, as the engines that propelled the country’s economy in the past have become less reliable. The property market is in the doldrums and exports are faltering. The youth jobless rate climbed to 21.3% in June, after which authorities said they would stop releasing that data.

The shift to green industry has made behemoths of companies such as BYD and Contemporary Amperex Technology—the country’s biggest EV battery maker, known as CATL—adding them to the ranks of China’s most important and valuable private-sector companies.

Their swift ascension mimics China’s internet sector a decade ago. Alibaba and Tencent became the crown jewels of Chinese entrepreneurship, attracting investment and hoovering up talent before a yearslong regulatory crackdown and slowing consumer demand tapered their growth.

Funding for Chinese internet startups cratered last year, falling 84% from their heyday in 2018 to $5.8 billion, according to Preqin data.

For more than a decade, authorities have boosted growth in the EV industry with consumer subsidies and clean-energy targets. The country is now the world’s largest market for electric vehicles, the type of high-tech, green-energy sector that China’s leader, Xi Jinping, is seeking to elevate.

One in four new cars sold in China last year was electric or plug-in, and almost all of those were made by Chinese brands or U.S. automaker Tesla, which has its biggest global factory in Shanghai. Analysts forecast that 80% of the new cars sold in China in 2030 will be electric vehicles.

Made-in-China marquees such as BYD, NIO and Geely’s Zeekr are popping up in dealerships across Germany, Japan and Mexico. CATL and other battery makers such as Gotion High-Tech are receiving global orders and expanding operations in Europe and in the U.S.

“If you look at where they have competitive advantage globally, EV is a space where you can very clearly say, China has got leadership,” said Daryl Liew, the Singapore-based head of portfolio management at SingAlliance, whose fund has twice increased its BYD holdings in the past year.

China is now the world’s largest auto exporter with Russia becoming its biggest buyer this year. WSJ explains how Chinese car brands profited from Moscow’s invasion of Ukraine and Western sanctions. Illustration: Kalvin Ng

Fund managers say they are confident about the Chinese industry’s long-term growth prospects, given a global electrification trend and the speed of domestic innovation in auto technologies. China usurped Japan as the world’s largest exporter of cars this year, largely driven by soaring demand from Russia and for EVs.

Beijing has pledged strong government support. This June, China unveiled tax breaks estimated to be worth up to $72 billion over the next four years to boost sales of EVs and plug-in hybrids.

Foreign automakers and deep-pocketed sovereign-wealth funds are taking note. In July, Volkswagen bought a 5% stake in Chinese EV maker XPeng for $700 million to jointly develop vehicles for the Chinese market. In June, a fund run by Abu Dhabi’s government invested more than $700 million for a strategic stake in Chinese electric-car manufacturer NIO.

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The $15.2 billion in venture capital last year went to 91 EV, hybrid-vehicle and related startups and was more than twice the amount from a year before, according to Preqin data.

o scale up, the EV industry has ramped up hiring, dangling higher salaries to poach algorithm engineers and dole out interest-free loans to retain talent.

Job postings in the sector rose 36% in 2022, with companies attracting talent from internet companies, according to Chinese recruitment site Liepin.

BYD hired around 31,800 graduates in 2023, with more than 80% of them hired for research and development, a company spokesperson said.

Several hundred of the new graduates came from elite Chinese universities such as Tsinghua University and Peking University, said BYD Chairman, Wang Chuanfu, in March.

“In the past, it was very difficult to recruit graduates from Tsinghua and Peking University,” Wang said, adding that the sluggish job market boosted their chances of hiring from those schools.

EV makers reached out most frequently to employees at Alibaba and internet search-engine operator Baidu, offering pay raises of at least 20% to poach their staff, Liepin data showed. Annual salaries of up to $91,000 have been offered to entice algorithm engineers, it said.

Alibaba and Tencent have trimmed head count—numbers were 12% and 7% lower at the end of June compared with their peak in the last quarter of 2021, company figures show. The two also sold off investments as regulatory scrutiny grew.

Authorities have been winding down the crackdown on China’s internet companies and seeking to boost consumer spending, moves that could help tech firms and spur their hiring.

Tencent declined to comment. Alibaba didn’t respond to requests for comment.

China’s EV industry also faces headwinds. Tesla has cut prices of its EV models in China amid a price war that could hurt smaller car-making upstarts, with scores of small players going out of business amid fierce competition.

The competition isn’t killing the buzz over EVs. Almost 19,000 startups related to the electric-vehicle industry registered in China last year, more than five times that of three years earlier, according to official data.

Vicky Dai joined a Chinese electric carmaker in June 2022, after working in the e-commerce divisions of China’s largest short-video platforms ByteDance and Kuaishou. The 29-year-old said she wants to work in an industry with the same growth potential she once saw in online businesses.

“Internet companies have reached their peak,” she said.

Write to Clarence Leong at, Liza Lin at and Rachel Liang at

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