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No License… LeEco has Yet to Obtain Permit to Produce Electric Cars In China

Last week LeEco announced a $3 billion investment to build an Auto theme Park & factory. But several state media, including ChinaDaily, expressed doubts whether LeEco had the required permissions to build a factory, let alone to build electric cars.

These doubts have now been confirmed. LeEco does not have the required license of the Chinese government to manufacture electric cars. A spokesperson for LeEco told Chinese media that the company has applied for a license, that the approval is “pending,” and that the current lack of a license is “not a big problem.”

In China companies need official permission for everything, ranging from investments to takeovers to new factories. The decision and approval processes can take very long and usually involves the central government, various agencies, and local governments.

The central government considers the auto industry as a vital sector of the economy, and it is therefore tightly regulated. A car maker needs a license to make cars, it needs a permit to build a factory, and it needs a separate permission for every new type of vehicle it wants to produce.

The government has invited the tech sector to get involved in the auto industry to speed things up, but the “techies” are expected to play by the rules. The last thing Beijing wants is loose-canon companies buying and building without the proper permits, messing up the carefully crafted strategies.

Article published on Forbes

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