Deep-pocketed investors looking to create the next Tesla are turning to seasoned automotive executives for help making sense of the complicated and capital-intensive car business.
A little-known Los Angeles electric-vehicle startup, EVelozcity, is the latest firm to lure big-name talent. The company, attracting commitments for $1 billion in funding since December, has hired Karl-Thomas Neumann, the former head of General Motors Co.'s European division, along with several former BMW AG executives.
Like many of the EV startups cropping up in California in recent years, EVelozcity has Chinese backers to thank for its large war chest. While investors from China have helped along several battery powered vehicle companies—including Wanxiang Group's rescue of the high-publicity Fisker project—other ventures have struggled to get off the ground because of lofty goals or insufficient capital.
EVelozcity declined to disclose its investors, saying they are from Germany and Taiwan besides China. Mr. Neumann, 57 years old, said in an interview he believes conventional auto makers aren't entirely committed to a wholesale transition for the industry because battery power will siphon sales from the high-margin fossil-fuel-powered cars they have sold for over a century.
“It's very hard to disrupt yourselves,” he said. Mr. Neumann's former employer, GM, and other auto makers say they are committed to electrics, with more than $70 billion pledged toward development of new electric models industrywide since early 2017.
GM, Peugeot and most other multinational car companies have projects under way aimed at developing EVs, driverless cars and shared transportation programs designed to challenge Tesla Inc., Alphabet Inc.'s Waymo and Uber Technologies Inc.
Newcomer companies that lure veterans in attempts to replicate Tesla Chief Executive Elon Musk's success face a long list of challenges. Mr. Musk has struggled to launch vehicles on time, meet price targets and maintain quality levels.
Faraday Future, started four years ago by Chinese billionaire Jia Yueting, attracted veterans including product chief Peter Savagian, who spent nearly 20 years at GM, mainly working on electrics and hybrid vehicles. Dag Reckhorn, with a background at automotive suppliers, oversees manufacturing. Faraday Future recently obtained a $1.5 billion investor commitment and aims to produce a car by year-end, a spokesman said.
EVelozcity wants to make more affordable electrics that will be used for ride-sharing, commuting and commercial delivery in big cities. Stefan Krause, a former chief financial officer at Deutsche Bank and BMW, recruited Mr. Neumann to EVelozcity. The firm also includes engineer Ulrich Kranz and designer Richard Kim, who helped develop BMW's i3 and i8.
Mr. Krause joined Faraday last year to help it raise capital but left in October after six months. He has since been sued by Faraday, which alleges he left with trade secrets. Mr. Krause and a Faraday spokesman declined to comment.
Another company looking to edge in on Tesla is Byton, also backed by Chinese investors. Its chief executive, Carsten Breitfeld, spent 20 years as a BMW engineer and executive, and its president, Daniel Kirchert, ran the premium Infiniti brand in China.
Lucid Motors Inc., an electric- car company based in Silicon Valley, in 2015 hired Derek Jenkins, who was Mazda's head designer. China-backed EV startup SF Motors Inc., which bought a plant in Indiana last year, hired former Volkswagen executive Jim Finn to oversee production.
BY MIKE COLIAS