Electric Vehicles Become China Darling --- Investors and talent pile into the country's EV and battery industries.

"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 bagged funding from 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.

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.

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." [1]

When we, the West, are spending our limited resources to cover Ukraine with children killing unexploded tiny devices, China is spending its resources to take our market share in production of cars. Do we have any brains left? 

1. Electric Vehicles Become China Darling --- Investors and talent pile into the country's EV and battery industries. Leong, Clarence; Lin, Liza; Liang, Rachel. 
Wall Street Journal, Eastern edition; New York, N.Y.. 05 Sep 2023: B.4.