China’s LeTV Looks to Make Inroads in Automotive

China’s LeTV aims to use its new website LeMall.com to introduce U.S. consumers to its cornucopia of electronic devices designed to deliver cloud-based content.

The website is populated with photos of LeTV’s televisions and Bluetooth headphones and speakers. Mobile phones are on the way as well.

But there is one item you won’t find on the site: a car.

“Right now, there are no plans to produce (our own car),” Eric Mika, senior vice president-open eco & strategic alliances and partners, tells WardsAuto.

LeTV wants to be a big player in the automotive world, but it aims initially to be a top-tier supplier of cloud connectivity and content. Eventually, it wants to work with partners to develop electric and autonomous vehicles, as well.

“We look at the automobile as a platform,” says Mika. “For us, (going into the automotive space) was a natural progression.”

The “SEE Plan” is LeTV’s name for its automotive strategy. Headed by Lei Ding, a former top executive at Shanghai General Motors, the SEE Plan aims to “build an open automotive ecosystem for energy-efficient, intelligent and connected vehicles,” according to LeTV’s website.

LeTV currently is working with two automakers. One is Faraday Future, a new company funded partly by LeTV founder and CEO Yueting Jia. At the recent CES 2016 exhibition in Las Vegas, Faraday introduced an electric concept car, the FFZero1 that uses LeTV’s connected-car platform.

Aston Martin also is working with LeTV. At CES, the companies introduced the Rapide S, a gasoline-powered Aston Martin using LeTV’s connected car system.

The Rapide S has a 13.3-in. (34-cm) high-definition touchscreen center console and 12.2-in. (31-cm) instrument panel with electronic instrumentation and gauges, both designed by LeTV’s Internet of Vehicles team.

The two companies signed a memorandum of understanding in December that encompasses research projects ranging from connected-car technologies to manufacturing consultation on new electric cars of the future, Aston Martin CEO Andy Palmer tells WardsAuto.

LeTV hopes the Aston Martin agreement will be the first of many.

“We are looking to leverage the technology we do for Aston Martin in other cars,” Mika says.

Whether that means the two will produce a car together is uncertain, however.

“This is an explanatory research study, so by its very nature it is conceptual,” Palmer says. “Accordingly it is too early to speculate on if or when this could make it into production cars.”

Cracking Supplier Ranks Tough Task

Breaking into the top tier of the automotive supplier world won’t be easy for LeTV. Automotive manufacturers want a supplier to prove it can deliver goods reliably and on budget before they form a relationship, notes Sam Abuelsamid, senior research analyst with Navigant Research.

“For LeTV, that is going to be a tough nut to crack,” he says.

Well-known tech firms Apple and Google have had a hard time getting their smartphone connectivity platform into cars, Abuelsamid points out. And as the industry moves toward autonomous vehicles, automakers will be even more reluctant to let go of the software side for cyber security and reliability reasons, he says.

LeTV, often called the Netflix of China, was founded in 2004 by Jia to offer streaming video online. Jia felt there were too many layers between the content provider and the end user, however. So LeTV expanded, developing content, offering a variety of devices to carry that content and linking those devices to the LeTVCloud.

The Chinese company released its first automotive-focused system, Autolink, in November, 2014.

In the past few years, LeTV has expanded rapidly, adding offices in Silicon Valley and Los Angeles. But China is where it has the biggest customer base by far.

In the first three quarters of 2015, LeTV had operating revenue of $1.32 billion. It has 53 million daily users, claims Ablikin Ablimit, vice president-strategy at parent company LeTV Holdings.

That kind of reach could help LeTV succeed as a top tier supplier – eventually. It can start by supplying automakers in China, where it has a strong brand name, Egil Juliussen, director-research and principal analyst for IHS Automotive Technology, tells WardsAuto.

“Their best strategy is to start in China. The management will have contacts (and) the company is respected,” he says. “It is a 5-year effort to get much traction. (In) 2020 is when they should expect to start on the successful path.”