For about 20 years, Carsten Breitfeld worked for BMW in Munich, most recently leading development of the luxury carmaker’s i8 hybrid sports car.
Now a new adventure beckons. Today Mr. Breitfeld heads the Chinese startup Future Mobility Corp., or FMC for short. The company’s goal is nothing less than to develop the most successful electric car of the future.
“We want to become the Apple of the auto industry,” he said.
From the very beginning, the firm will focus entirely on pioneering technology for self-driving electric vehicles. “Autonomous driving will utterly transform both the product and the business model of the auto industry,” said Mr. Breitfeld.
Although still far from rivaling the conventional car market, demand for electric cars is rising. And China leads the small but growing global market.
“We’re flexible and can react quickly to new situations. We don’t have any ballast from the past.”
In the first six months of 2016, 170,000 electric cars were sold in China – twice as many as in the same period last year, according to the Center of Automotive Management, a research institute near Cologne.
That demand is driving more Chinese companies to market. Shenzen-based battery and e-car maker BYD Co. recently passed Tesla as the world’s largest producer of electric cars, for example. And about a half-dozen Chinese-backed startups — including FMX, LeEco, Faraday Future and Atieva — have joined the effort.
“There are so many that it’s easy to mix them up,” said Zeng Zhiling, head of LMC Automotive Consulting in Shanghai.
Mr. Breitfeld knows it’s a crowded field, but he wants to set FMC apart from the competition. What distinguishes his firm is its personnel.
He was able to persuade various colleagues from BMW’s electric vehicle “i-team” to join FMC, including Dirk Abendroth, head developer of the electric drive train, designer Benoit Jacob and Hendrik Wenders, head of product management.
Mr. Breitfeld and his chief operating officer Daniel Kirchert also know each other from their time at BMW. Most recently, Mr. Kirchert headed Infiniti, the luxury car arm of Nissan, in China. Other managers from Daimler, Google and Tesla were also lured to FMC.
Why would leading developers give up secure careers at established companies for an unknown startup in China?
“The car industry has trouble getting moving,” explained Mr. Breitfeld. With e-cars, manufacturers have to cannibalize the business they have built up over decades. Moreover, decisions often take too long at big companies.
“We’re flexible and can react quickly to new situations,” said FMC’s chief executive. “We don’t have any ballast from the past.”
But FMC is a latecomer to the party, and Mr. Breitfeld and Mr. Kirchert don’t yet have anything concrete to show. FMC wants to bring its first vehicle to market by 2020.
The managers envision a mass-market product in the upper price range. “We want to offer ‘affordable premium’ and not only concentrate on China,” said Mr. Breitfeld.
FMC intends to go directly into mass production and get ahead of Tesla, which sold just over 50,000 cars in 2015. “I can’t earn any money selling 50,000 cars per year,” notes the FMC chief.
Mr. Breitfeld estimates FMC must sell 250,000 to 400,000 vehicles annually to operate an efficient factory at capacity and make a profit. “That’s the order of magnitude you need to be in the black,” he said. “Anything less is difficult.”
In order to reach that goal, FMC is working on a platform to allow production of several models. “After the first vehicle, we could quickly bring further models to market. That would allow us to achieve a volume in China, Europe and the United States in the short term, that fills a factory,” said Mr. Breitfeld.
One difficulty: In 2020 the Chinese government will end generous buyer subsidies it has offered to support e-cars.
FMC has strong financial backers, including Taiwanese electronics giant Foxconn, China’s huge internet company Tencent and the Chineses luxury car dealer, Harmony New Energy Auto Holding.
Mr. Breitfeld emphasized that management has total freedom in guiding the company. He said that in the current initial round of financing, FMC is gathering a “significant sum in the triple-digit millions.”
Management also has a “substantial stake” in the company, he said. And of course, Foxconn and Tencent could inject more than money into the new company.
“Foxconn can produce a lot of good-quality products quickly,” Mr. Breitfeld noted, and Tencent’s huge amounts of data could help in developing systems for autonomous driving, for example.
Experts consider these goals to be quite ambitious. “(But) the company should be taken extremely seriously,” said Ferdinand Dudenhöffer, a professor and automobile expert at Duisburg-Essen University.
FMC’s cadre of former BMW developers means that high-quality technology can be expected. “They know how to build good cars,” said Mr. Dudenhöffer.
What is more, FMC’s big investors could turn out to be guarantors of success.
“Foxconn is a master of production processes. That ability is hugely important and has been lacking at Tesla up to now,” explained the automotive expert.
Plus Tencent is not only a deep-pocketed investor, but also one of the leading Chinese technology companies. These are auspicious starting-points, said Mr. Dudenhöffer.
The general secretary of the association of Chinese passenger car manufacturers, Cui Dongshu, also believes FMC enjoys favorable initial conditions.
“But everything will depend on the quality of their cars,” he warned. FMC will only stand a chance if its vehicle can distinguish itself from the mass of competitors.
China’s three big internet companies — Tencent, Alibaba and Baidu —are all working on concepts for autonomous cars, “but U.S. technology companies like Google are further ahead,” said Mr. Dongshu.
He acknowledged that with developers from BMW, Daimler and Tesla, FMC has assured itself of competency. But the startup must prove it can transfer this proficiency into first-rate quality and technology.
The combination of German know-how and inexpensive production in China isn’t new for Asian automotive companies. A Chinese startup once sought to challenge established firms with the Qoros brand. It had the help of a series of VW and BMW managers who went over to the Chinese. But the cars failed to find popularity with customers.
Mr. Breitfeld dismisses that comparison. “We won’t make the same mistakes,” he said.
He pointed out that Qoros tried to position itself in an established market. With its focus on autonomous electric cars, FMC is avoiding that problem. The market is just opening up, Mr. Breitfeld said, and that makes it easier for new companies to assert themselves.
Qoros also wasn’t able to position itself as a brand — and this will be a challenge for FMC as well. It will be years until the first cars are out on the streets.
But FMC already wants to introduce the brand and design to customers. Mr. Breitfeld believes this is possible even before a car is marketed, citing the way BMW advertised its i-group in advance of deliveries.
Mr. Breitfeld will manage FMC from Hong Kong, and is still adjusting to the lifestyle change. One thing in particular has caught his attention: “It’s amazing how many Teslas there are around here,” he said.
In the next five years the head of FMC hopes to change that.
Stephan Scheuer is Handelsblatt’s China correspondent, based in Beijing. To contact the author: firstname.lastname@example.org