LeEco to invest $3b in auto park

Chinese internet major LeEco said on Wednesday it will invest 20 billion yuan ($3.02 billion) to build an auto park in Zhejiang province, as part of the group's broad plan to mass-produce electric cars.

The park, to span 2.87 square kilometers, will include an electric-car plant with annual capacity of 400,000 units, the company said.

It declined to disclose when the plant will start production and it was also unclear whether the plan was approved by industry regulators.

The Beijing-based firm said that the car factory's first phase will cost 6 billion yuan and when completed will be able to produce 200,000 cars annually.

"The plant will host a high-end car assembly line, which will have our own intellectual property, and we will start building the factory as soon as possible," said LeEco CEO and founder Jia Yueting.

Founded in 2004, LeEco started as a video-streaming service provider akin to Netflix Inc, but it rapidly grew into a heavyweight with presence in smartphones, TVs and cloud computing.

In April, it released its first self-driving electric concept car－28 months after the company decided to enter the industry. Its founder Jia has also invested in the US-based electric car startup Faraday Future, which promised last year to spend $1 billion on a US factory. But the initiative was thrown into doubt amid worries about its financial health.

Zhang Yu, managing director of Automotive Foresight Co, said it takes at least five to six years for carmakers to move a concept car into mass production and it remains to be seen how LeEco, as an internet company, will achieve the goal.

"It remains to be seen whether LeEco's project is feasible," Zhang said, adding he was also concerned about whether the firm had the 20 billion yuan to invest in the park.

Chinese internet giants are all eyeing cars, which are widely seen as the ultimate mobile device to connect people with their services.

Last month, Alibaba Group Holding Ltd unveiled an internet-enabled vehicle in partnership with SAIC Motor Corp, a major car manufacturer. The car will soon be in the market at a retail price from 148,800 yuan.

Baidu Inc has said it plans to mass-produce its self-driving cars in five years. Tencent Holdings Ltd is also marching into the sector with Foxconn Technology Group, although they are yet to unveil concept cars.

The trend comes amid a boom in China's new-energy vehicle market. From January to July, sales of new-energy passenger vehicles surged 140 percent to 150,000 units, according to the China Passenger Car Association.