This article only represents the author's own views.
China’s overseas car sales have zoomed this year, overtaking Japan and Germany to make the country the world's largest exporter on the strength of surging demand for its electric vehicles (EV). That’s sparked a rush by overseas investors determined not to miss out this potential Chinese gold mine. One of the earliest of those was Warren Buffett, whose investment in BYD (1211.HK; 002594.SZ) has increased many-fold since he made it in 2008. More recently, Abu Dhabi’s CYVN Holdings invested in Nio Inc. (NIO.US; 9866.HK). And earlier this year Germany's Volkswagen (VOW. DE) placed its bets on XPeng (XPEV.US; 9868.HK), while its SAIC Audi joint venture signed an agreement with SAIC Motor (600104.SH) to speed up its development of their EVs. Last month that club was joined by Euro-American giant Stellantis (STLA.US), the world's fourth largest car company whose brands include Chrysler and Fiat, which became a major stakeholder in the struggling Zhejiang Leapmotor Technology Co. Ltd. (9863.HK). Investors initially cheered the deal, with Leapmotor’s shares surging 11.4% when the Hong Kong market opened that day.
But the rally quickly went into reverse, and Leapmotor’s shares actually ended down 11% on the day as earlier worries about the company’s future quickly overshadowed excitement over the new tie-up. The biggest winner of the deal so far is one of Leapmotor’s early investors, which cashed out its stake in a company that has posted massive losses since its Hong Kong listing a year ago.