She was sentenced to 80 months in prison on Friday.
Wen first came to the attention of authorities after she made a series of attempts to buy luxury homes in London from 2017 to 2018. The three properties were valued at £23.5 million ($29.7 million), £12.5 million ($15.8 million), and £4.5 million ($5.7 million).
The subsequent investigation culminated in police seizing devices containing 61,000 bitcoins — currently worth more than $4 billion — in 2018, in what was the UK's largest-ever crypto seizure.
The funds are said to have come from an investment fraud operation in China led by her "employer," Yadi Zhang.
In her sentencing remarks, Judge Sally-Ann Hales, KC, said that more than 128,000 investors pumped 40 billion Renminbi (roughly $5.6 billion) into the scheme.
"Some of the proceeds of this fraud were exchanged for bitcoin, loaded onto a cryptocurrency wallet and smuggled out of China on a laptop," she added.
According to the CPS press release, Wen was convicted of converting "significant amounts" of the bitcoin into cash and other assets on her boss's behalf.
Despite declaring an income of just £12,800 (around $16,200) and £5,979 (roughly $7,600) in 2015 and 2016, Wen moved into a six-bedroom property in London in 2017, paying over £17,000 (around $21,600) a month.
Wen and her boss claimed to run an international jewelry business, with Wen acting as the "front person." They also paid for Wen's son to move to the UK from China to attend a private school and purchased two properties in Dubai.
But her attempts to purchase extravagant London homes triggered anti-money laundering checks, and the sales stalled as she could not explain the source of the funds.
Wen was not accused of involvement in the original fraud, but Hales told Wen that she was "in no doubt that by 22 June 2019, you knew, rather than merely suspected, that you were dealing in the proceeds of crime."
In March, Andrew Penhale, chief prosecutor, said: "Bitcoin and other cryptocurrencies are increasingly being used by organized criminals to disguise and transfer assets so that fraudsters may enjoy the benefits of their criminal conduct."
"This case, involving the largest cryptocurrency seizure in the UK, illustrates the scale of criminal proceeds available to those fraudsters," he added.
Tucked away in the 1,100-page FAA reauthorization, signed into law by President Joe Biden on May 16, is a section on data privacy that would allow private aircraft owners to further cloak their travels.
The language calls for the FAA to set up a system that would allow private plane owners to request their data be withheld from public sites, fly under a temporary registration number to obscure their flight data, and block "similar identifiable data or information, except physical marking required by law" from public dissemination.
However, the new law appears to allow PIA applicants to travel internationally, while owners had previously been required to swap out their PIA code when traveling outside the US. It could also potentially further reduce the number of identifying characteristics that would be publicly available regarding the users' aircraft and flight information, though it's unclear what that would look like.
"Let this be said that this doesn't prevent us from tracking jets," he said on X shortly after the bill was passed by Congress. "We can still figure out who's who via context clues."
Prior to the law's passing, the LADD and PIA programs were used by myriad businesspeople and celebrities to cloak their travels, but they weren't a silver bullet.
LADD and PIA prevented an owner's flight information from showing up on websites that use FAA data, like FlightAware or FlightRadar24, but the information can be found via third parties.
For example, publicly available software like ADS-B Exchange, which uses volunteer radios to track things like altitude and airspeed, and context clues mean the FAA programs can't prevent all jet tracking.
"Elon Musk, for example, has a Gulfstream, and there's only so many people that fly that particular plane out of Brownsville, Texas, and fly to the same airports," Sweeney, who is still running celebrity jet-tracking accounts on social media, told Business Insider in 2022.
An FAA spokesperson said the agency "will comply with the requirements in the legislation."
Mark Dombroff, a partner and aviation attorney at Fox Rothschild LLP and a former FAA lawyer, told Business Insider that the law is a sign that the government is finally responding to the security concerns celebrities like Musk have been dealing with over the past few years.
"Congress is basically giving the FAA a mandate around the level of safety they want to be able to achieve," Dumbroff said. "It's up to the FAA to find the means to reach that end result."
"I think what really has to happen is the availability of the information and the manner in which it's being used needs to be fine-tuned," he added.
Ukrainian forces recently recaptured territory near the city of Vovchansk in the region, according to the Institute for the Study of War (ISW) think tank. It cited geolocated footage published on May 22.
Sources told the Kyiv Post that the Ukrainian fightback in the area was being led by the elite 82nd Air Assault Brigade, with support from special forces — and the US-supplied Strykers.
Leaked military documents from last year showed that the powerhouse 82nd unit is one of Ukraine's best equipped, with around 150 armored infantry carriers, including 90 Strykers and 14 British Challenger tanks, per Politico.
The brigade was kept in reserve until August last year when it was finally sent into battle around Robotyne in the region of Zaporizhzhia in southern Ukraine to support the counteroffensive, which ended in disappointment for Kyiv.
A video posted online by the 82nd Air Assault Brigade appears to show the Strykers in action in Vovchansk.
Stryker vehicles.
Picture Alliance/Getty Images
According to the manufacturer, General Dynamics, Strykers come in 10 variants, including an infantry carrier, a reconnaissance, and a mobile gun system.
They can hit a top speed of 62.5 mph and have a cruising range of 330 miles.
The vehicles first saw action with the US Army during Operation Iraqi Freedom, with the 3rd Stryker Brigade Combat Team (BCT) arriving in Iraq in 2003.
The eight-wheeled infantry transporter proved highly effective in urban warfare and quickly earned praise for its operational mobility and command-and-control network.
In 2017, Theodore Kleisner, then a lieutenant colonel who had served as a company commander in the 3rd BCT in Iraq, praised the Stryker: "We used Strykers to maneuver around and to stop bullets. We stayed in them until we thought we were at a point where we needed to establish dominance of terrain."
Stryker BCT, Maj. Walter Gray II, in a 2017 study, noted that Strykers built a positive reputation among soldiers for their "maneuverability, speed, and quiet operation," saying that they were "favorable for raids, patrolling, and cordon-and-search operations in the urban streets of Mosul."
"The Iraqis began calling the Strykers 'Ghost Riders' because they were so quiet," he added.
Stock image of a boy on a tablet and Monaco Harbor.
Rebecca Nelson/Getty Images and John Harper/Getty Images
The private tutoring industry is valued at $62 billion.
Private tutors for ultrawealthy families can earn huge sums.
For many wealthy families, tutoring is a "status symbol," but the lack of regulation is a concern.
A wealthy family wants to hire a private tutor for their two young children. The position includes a minimum annual salary of $180,000, nine weeks of annual vacation, and accommodation and travel expenses. However, it comes with a demanding list of job responsibilities.
The successful candidate must be artistic, provide singing lessons, and play the piano. The tutor also needs to speak Italian, with good French and German, know how to ski, play soccer, do judo, and ride horses, and demonstrate a keen interest in motorsports.
The role includes extensive travel in Europe, the Middle East, and the US alongside bodyguards and executive assistants.
The UK-based tutoring agency Tutors International, searching for the highly lucrative tutoring role, has been described as the "Dom Perignon" of the industry.
Adam Caller started the company in 1999, but it wasn't until 2003 that he inked his first "gigantic" contract.
"In 2001, we thought charging a client £28,000 ($35,000) a year was a lot of money," Caller told Business Insider. "In 2003, I was personally offered a job by a client for £300,000 ($380,000)."
"I didn't appreciate how valuable our service was to families like that until they told me themselves."
Caller described his clients as "ultra-high-net-worth" families. He said 90% of potential clients say "money is no object" when selecting a tutor.
"They are very exacting," Caller said. "They need to know I'm listening and will deliver on my promises."
Jerome Barty-Taylor, the owner of another private tutoring business based in Hong Kong, previously told BI that "you're expected to be available whenever and wherever your clients want you to be."
"When I first started working in Hong Kong, a parent wanted to meet me at an airport lounge to talk about his child over Champagne because we both had flights that evening. For him, it was the most efficient use of time."
Jerome Barty-Taylor, 35, is the owner of a private education company in Hong Kong.
Jerome Barty-Taylor
Tutoring has become a "status symbol"
Current estimates put the global private tuition market at $62.08 billion. It is expected to grow to $132.21 billion by 2032.
It is no surprise that hundreds of agencies are seeking a piece of the pie, from everyday sites like MyTutor or SuperProf to elite private agencies that often hire exclusively from pools of ex-private school pupils and Oxford and Cambridge University or Ivy League grads.
One instructor who worked for an elite international tutoring agency in various places across Europe told BI that they had stumbled across the agency during their time at Oxford, where, along with Cambridge, the company does the majority of its hiring.
"I was shocked that they could charge so much for classes," they said, adding that an hour of tuition would set a client back upwards of $150.
"What was most surprising was that I had no formal training or experience, and yet because I had been to Oxford and spoke with a good English accent, clients would willingly dish out that sort of cash," they said.
One tutor who works with some of Dubai's richest families told BI that sometimes, the parents would start a bidding war with one another to secure the service of a favorite tutor.
"If they knew I would be at one client's house at a time they wanted, they would offer to pay double, triple, or even more to convince me to come to them instead," he said.
Dubai is home to some of the wealthiest families in the world.
Lu ShaoJi/Getty Images
For the elite, tutoring has become a "status symbol," says Mark Bray, UNESCO Chair Professor in Comparative Education at the University of Hong Kong.
"There is also a herd effect," Bray told BI. "When everybody else seems to be investing in tutoring, it seems wise to go with the crowd, at least as an insurance policy.
"Schools may assume that children are receiving tutoring. In this case, parents need to invest in it to avoid being left behind," Bray said.
The elites don't just hope that tutors will teach their children. They also hope that a tutor will impart values.
"For the ultra-rich, education isn't just about books. It's about maintaining values," Barty-Taylor, the Hong Kong-based tutor, said.
"That's so their children don't fall prey to the curse of 'one generation to make it, and one generation to spend it.'"
Caller said he is "unforgiving" when it comes to selecting tutors for his demanding clients, and competition for the exclusive roles is intense.
For the position Caller is currently advertising, he has received over 200 applications. He said he will likely interview three or four of these and will put two forward to the client.
With the many perks that such tutoring positions come with, it's no surprise.
"There are such brilliant opportunities to travel! You get to a glimpse into a life of luxury that you wouldn't otherwise have access to. And having accommodation paid for as well meant I was able to save far more than my peers back in London," a tutor, who spent a year working in Russia and Monaco told BI.
She said she would regularly tutor children in enormous luxury mansions, was driven around by private drivers in blacked-out cars, and was pestered by the family's nannies, who would endlessly offer her drinks and food.
"These kids had personal massage therapists and private helicopters. It was insane," she said.
The Dubai-based tutor said he had received tips of over $20,000.
But Lee Elliot Major, a professor of Social Mobility at the University of Exeter, warned that tutoring could be "education's dark side."
"Graduates from elite universities are often making a Faustian pact: serving the wealthy to pay their post‐graduation debts," he said. "Tutoring has become necessary to make ends meet for graduates trying to forge careers in sectors like the creative industries where it is hard to make a living."
But many graduates inadvertently remain tutors for far longer than they expect, he said. Glamorous destinations, private jets, inter-family bidding wars, and incomparable salaries make it increasingly appealing.
Lack of regulation is a growing concern
Tutors International has boomed in recent months.
"We've seen a 4-500% growth this year," Caller said.
Caller believes there is a clear reason for this: "Schools are not preparing children for the future of ultra-high-net-worth families."
These ultra-rich parents are worried that "if these kids are going to grow up and take over the family office, then they need to know how to run that company, not how to complete the square.
"If you've got the resources, you just take them out of the system and organize bespoke tuition for the child," Caller said.
But whatever the circumstances, the question remains about whether tutors are qualified.
To teach at a state school in Britain, for example, you need an undergraduate degree followed by a full year of training, a three-year teaching degree, or two years of on-the-job training with the Teach First program.
To tutor, you just need a client.
Major described it as the "Wild West of education."
"There is very little regulation or focus on protecting minimum standards," he said. "I always advise parents to think very carefully about the tutors they are paying."
Caller also cautioned that lack of regulation was an issue in the industry and that some companies had a tendency to over-promise and under-deliver. He added that he and other industry leaders were currently working to develop the world's first tutoring qualification.
The instructor working in Russia and Monaco told BI that one of her pupils had suffered with learning difficulties but that "the child's issues were completely brushed under the carpet, purely to ensure that the tutoring stayed in the hands of the company."
"I didn't have the training to teach an individual who was struggling like that," she said, "it was heartbreaking."
At the same time, "I liked that I was able to be there for certain kids in a way that they did not have at home," the tutor said.
"Many of the kids I taught were craving proper attention. You could see after a period of time the kids would almost soften with you and actually enjoy the time together."
This tutor also worked for another online agency that catered to more typical lower-middle-class families.
"These kids really needed the help and were keen to learn," she said.
"Although the pay was a lot less, seeing how excited the tutees would be when they made a breakthrough with a concept or problem made the job far more rewarding and enjoyable."
Some gig workers have had to deal with having their accounts deactivated.
AP Photo/David Zalubowski
Some gig workers' accounts have been deactivated for bizarre reasons.
Former workers for Instacart, DoorDash, and Walmart's Spark say even just figuring out why is hard.
It's one reason, along with pay, that some drivers and shoppers are turning away from gig work.
Work can disappear suddenly if you make deliveries as a gig worker.
That's because apps like DoorDash, Instacart, Uber Eats, and Walmart's Spark frequently deactivate the accounts of their drivers over minor issues — or no obvious issue at all, according to delivery workers who have spoken to Business Insider.
Fighting those deactivations and getting back on the apps tends to be tough. Some gig workers have found success thanks to arbitration clauses in the companies' terms for delivery contractors.
Three workers who spoke with BI pointed to particularly bizarre — and, in their views, unjustified — experiences related to the apps closing their accounts. The workers didn't want to be identified in this story, but BI has verified their work for the apps mentioned.
Deactivated without doing a single order
One Ohio delivery worker told BI she signed up for Walmart's Spark delivery service last fall. She wasn't making enough money delivering orders for DoorDash, she said, so she wanted to try other apps.
Before she could start delivering, though, she needed to renew her driver's license. Walmart would not sign off on her account until she uploaded a picture of her new license.
"Finally, I got it in the mail and did the identity verification," the driver recalled. "And they deactivated me immediately."
She spent the next few days trying to get someone on Spark's support line to help. But the driver never got her account reactivated — or even a clear explanation of what went wrong.
"I feel like it's a fairly easy fix," the driver said. "You can look at my account, see that I've not made one delivery for you people, and just reactivate it."
A Walmart spokesperson said: "If a driver's account is not approved, it may be due to a variety of reasons, including failure to meet the eligibility requirements or violation of the platform's Terms of Use."
Two accounts, two deactivation fights
Last summer, a couple who each deliver orders for DoorDash using their own accounts in California found out one of their accounts had been deactivated for "suspicious activity." DoorDash wasn't able to provide a more specific reason for the deactivation, one of the couple told BI.
"I was forced to rely on my DoorDash account, which only has bike mode," the second driver said. As a result, the couple's income fell by roughly half.
Then in January, the second driver said, his girlfriend's DoorDash account was reactivated after she tried contacting DoorDash multiple times. But that same month, DoorDash deactivated his own account, citing "suspicious activity." He hasn't been able to get back on the app, he said.
Finally, in February, DoorDash once again locked the girlfriend out of her account. This time, it was suspended because her identity "couldn't be verified," even though she had been making deliveries for DoorDash for seven years.
"One agent said the account was still active and another agent told her the account was deactivated and there's nothing she can do," the driver recounted. "DoorDash doesn't seem to care and they just keep giving us the run-around."
A DoorDash spokesperson directed BI to a statement that the company released on deactivation and other policies last fall. It says that "serious or egregious conduct" can lead to account deactivation and that DoorDash has an appeals process "driven by human decision-making and oversight."
Deactivated after buying expensive wine
One Instacart shopper in California told BI that he was shopping for a grocery order last summer that included a bottle of wine.
According to the order summary, the wine should have cost around $40. But in the store, it was selling for roughly twice as much.
At the checkout, the shopper said, his Instacart debit card was declined when he tried to pay for the order. After calling Instacart, a support agent was able to add money to the company-issued debit card.
The shopper went on to deliver the order. A day later, his account was deactivated. Instacart's email to him cited a "misappropriation" of the company's money.
The shopper spent the next week on the phone daily with Instacart support to figure out what had gone wrong. "Then, I finally just give up," the shopper said, adding that he decided it was easier to sign up for another app instead of getting his Instacart account reactivated.
An Instacart spokesperson confirmed that "shoppers are restricted to a specific spending amount per batch."
"If a shopper manually adds goods to the order that exceeds the capped amount, Instacart receives an alert and our teams manually review the order to take action as needed," the spokesperson added.
Do you work for Instacart, DoorDash, Walmart Spark, or another gig delivery service and have a story idea to share? Reach out to this reporter at abitter@businessinsider.com
Burger King and McDonald's are launching $5 meal deals.
Paul Weaver/SOPA Images/LightRocket via Getty Images
Burger King and McDonald's are both set to launch their own $5 value meal deal.
Other fast-food and restaurant chains are also getting involved in the value-wars.
Chains are trying to lure diners back in, after high prices of fast food have turned many away.
The fast food wars are heating up, as Burger King is set to launch its own $5 value meal deal.
It's not the only fast food chain to start offering lower-priced deals. So how do the other fast-food and restaurant chains offers stack up?
Burger King's offer is similar to the McDonald's deal. It includes a sandwich, chicken nuggets, fries, and a drink all for $5, Bloomberg reported. But this deal is set to run for over a month, unlike the one from McDonald's.
McDonald's will launch its $5 offering at the end of June. It includes a choice between two of the chain's signature burgers — a McChicken or a McDouble — and a four-piece McNuggets, fries, and a drink.
Other chains are expanding their meal deals. Wendy's has announced that it's adding to its $3 breakfast deal for a limited time. Customers can pair a small portion of seasoned potatoes with a choice between two breakfast muffins — a bacon, egg, and cheese English muffin or a sausage, egg, and cheese English muffin, the company said.
Earlier this year, Taco Bell overhauled its Cravings Value Menu by adding six new "meal-sized" items to the menu, which features items under $3. The menu update came as customers are seeking more value, but have found rising prices at fast food chains.
Restaurant chains like Chili's are also rolling out more deals and portion sizes to capture some of fast-food's lost diners. Chili's launched itsnew Big Smasher burger earlier this year — the burger costs $12.99 but comes down to $10.99 when part of the chain's "3 For Me" meal combo. The cheaper deals hope to capture those diners looking for value as fast-food prices creep up toward restaurant chain prices.
The new iPad Pro comes with an OLED display and a powerful M4 chip.
Apple
Apple's new iPad lineup debuted on May 7 with flashy new features.
The new iPad Pro has a powerful M4 chip, but it's unclear who's buying iPads these days.
Both analysts and owners suggest that the upgrade cycle might be to blame.
Apple launched its latest iPads earlier this month with great fanfare and a host of new bells and whistles.
While it's clearly a move to update the product line and invigorate customers, it's also led many to ask: Who's actually buying new ones?
The tablet computer debuted in 2010 with a price tag of $500, and the lineup has since expanded to include tablets that fit the needs of kids, creatives, and business professionals. Its most recent versions include the thinnest yet, with an impressive OLED screen — if you want to spend $3,000 on a new iPad, that is.
But the overall iPad line "has been in a funk for three years," said Gene Munster, managing partner at Deepwater Asset Management. Apple's most recent earnings showed quarterly revenue of $5.56 billion — down 17% year-over-year and below analysts' estimates.
One major issue, analysts who spoke to Business Insider said, is how regularly owners feel the need to buy a new one.
"They use their iPad, but they don't use it enough that they need to upgrade super often," Munster said.
In fact, Wedbush Securities managing director Dan Ives estimated that 70% of iPad owners haven't upgraded in 4 years — seemingly a lot longer than people keep their iPhones.
One Reddit user recently asked in the r/iPadPro subreddit if 2018 iPad Pro owners were finally ready to upgrade to the latest model, and the responses were mixed.
"My beloved 2018 died last month. I drove that poor iPad into the ground and she held strong. I already ordered the 2024 and plan to keep it for at least another 6 years," one user wrote.
Others weren't so quick to give up on their old iPads, which are still running and can still support current software.
"I'm waiting for some useful 3D model editing app or something that needs something more powerful to make me push my 2018 past its breaking point but haven't gotten there yet," another user replied.
Better computing power could be something that drives sales. Ives said the new M4 chip in the new iPad Pro, which Apple touted as an "outrageously powerful chip for AI," could lead more consumers to buy an iPad over a Mac.
It's key as AI becomes increasingly ubiquitous. Apple CEO Tim Cook has said there are "big opportunities across our products" for generative AI, so the newest iPad should reasonably be compatible with any updates the company could announce at its Worldwide Developers Conference.
Meanwhile, Munster believes education is still the tablet's strongest market. Remote learning prompted by the COVID-19 pandemic grew iPad sales in 2021, and Apple offers deals on devices for students.
Apple execs are optimistic about the tablet, at least in the short term. CFO Luca Maestri said on May 2's earnings call that the company expects iPad revenue growth in the double digits in the current quarter.
But it'll need to bounce back sustainably if Apple hopes to wow analysts.
"This has been a long, slow, downward trend for the iPad," Munster told BI.
After Etienne Constable was told to hide his boat from the street, he hired friend and neighbor Hanif Panni to paint his boat on the new fence.
Courtesy of Hanif Panni / @hanifwondir
Etienne Constable was ordered to hide his boat from the street or face a $100 fine.
Constable asked his neighbor to paint the boat on his city-mandated fence that blocks it from view.
The neighbor, artist Hanif Panni, said he's been inundated with requests to paint similar murals.
SHOULD WE WORK INTO A BULLET THAT THE CITY IS CHANGING/CONSIDERING CHANGING ITS POLICY OR RELEGATE THAT TO THE BODY OF THE STORY?
A fence in California is catching eyes not for its extravagance or scale, but for its playful defiance against a city ordinance.
In July 2023, Senior Applications Manager Etienne Constable received a notice from the city of Seaside, a 30,000-person enclave on the Pacific Coast about 116 miles south of San Francisco. It requested that he build a barrier to shield his boat, parked in his driveway, from street view — and he faced a $100 fine if he didn't comply, with the possibility of it escalating to a maximum of $500.
In a cheekily clever move, he sought the help of his neighbor, artist Hanif Panni, to devise an ingenious workaround: building a fence, yes, but adorning it with a strikingly lifelike mural of his boat.
"He came to me and said, 'Wouldn't it be funny if we did something like this?'" Panni told Business Insider. "He's not a prankster, but he does have some pretty interesting ideas for fighting bureaucracy in a positive way."
Hanif and his son working on the mural.
Hanif Panni / @hanifwondir
Constable, who told Business Insider that he has lived in his home for 29 years, has parked his boat trailer in his driveway without contest for the majority of that time.
The regulation within Seaside's Title 17 Zoning Ordinance Code mandates that boats and trailers be enclosed by a six-foot-high fence along their sides and fronts, but Constable said it wasn't enforced with any regularity.
"Before last July, I was never aware of it," he said.
However, everything took a turn in early 2023 when Seaside stepped up its code enforcement efforts in response to many long-standing complaints.The city started issuing letters to residents, including Constable, as reported by The Washington Post.
"I was certainly surprised and immediately a little bit angry since I've had a different boat trailer parked there almost the whole time I have lived in this neighborhood," he said. "I knew I couldn't fight city hall because I'm not famous or rich, but I thought I could start with my intellect."
Panni said what he was paid to paint the mural was considerably "less than what the city would have charged Constable if he hadn't built the fence."
Constable and Panni's innovative solution was greeted with uproarious laughter and attention on social media. As a result, Panni has been inundated with requests from other Seaside residents who are eager to have their own fences similarly — and defiantly — transformed.
"It's been pretty hilarious," Panni said. "I have a couple inquiries, and I'm meeting with people that have similar letters from the city. It's really refreshing that this public art statement is inspiring so much conversation."
Seaside's city leaders are, surprisingly, quite pleased with Constable's rebellious fence.
In May, Police Chief Nick Borges, who currently serves as the acting city manager, visited Constable's home to discuss the fence's mural.
During their meeting, Borges not only extended his congratulations to Constable but also expressed his admiration with a heartfelt high-five. According to Constable, Borges also mentioned that he was in favor of the city getting rid of some ordinances, including Title 17.
"We're not taking any action," local news outlet KSBW reported Borges said. "The only action I'm going to take is a high five, and that's it."
The International Energy Agency wrote in a recent report that despite EV adoption in China being expected to grow to 45% this year, there are still "far more EV companies in China than can possibly survive in a competitive market."
"In 2014 alone, ten years ago, over 80,000 companies registered in China entered the electromobility sector. In 2023, over 80% of electric car sales in China were concentrated in just over 30 companies," it read.
China's EV market is known for being brutally competitive, with around 123 companies jockeying for customers. Executives and experts are warning that the number of players will likely shrink in the coming years, with economic headwinds piling the pressure on electric vehicle manufacturers.
The IEA report concludes that China's EV market will likely coalesce around a handful of "robust champions."
Some Chinese EV CEOs have echoed that sentiment, and are steeling themselves for what Xpeng boss He Xiaopeng described as a "knockout round" that could end in a "bloodbath" with prices continuing to drop even as growth slows.
"It is not correct for a startup firm to chase idealism," said William Li, CEO of Tesla rival Nio said at a media briefing in December, per The South China Morning Post.
"Nio, as an EV business, has to face the grim reality and try to dodge the bullet as market competition intensifies," he added.
Xpeng boss He Xiaopeng said 2024 will be a "knockout round" for China's EV firms.
Li Auto, meanwhile, saw vehicle sales and net income fall short of analyst targets and cut delivery targets for its new battery-electric van after it failed to sell as well as expected.
Slowing demand has sparked a brutal price war initiated by Elon Musk's Tesla. The automaker started cutting the prices of some of its Chinese models in 2022 and has continued since then, forcing local rivals to retaliate and slash their own prices to keep up.
It has also led to fears of overcapacity, with healthy subsidies for the EV industry leading to a glut of new factories being built over the past few years.
Many of them now sit empty, with China's National Bureau of Statistics estimating that capacity utilization across the auto industry was at 65% in the first three months of this year, down from 75% in 2023 and 80%-plus before the Covid-19 pandemic, according to The New York Times.
This has put increasing financial pressure on China's EV makers, many of whom have accumulated losses as they have rapidly scaled up their businesses.
Regulators have issued their own warnings. Xin Guobin, vice minister of industry and information technology, cautioned against expansion in the face of "insufficient" consumer demand for EVs and said Beijing would take "forceful measures" to address "blind" construction of new EV projects.
"There are a lot of EV companies in China. The average volume per brand is very low, not sustainable, and so there will be eventual consolidation," Stephen Dyer, head of Asia auto and industrials consulting at Alixpartners, told Business Insider.
Dyer said consolidation would likely be a protracted process, with investors and local governments reluctant to let EV companies die.
But he added that only "a handful" of Chinese firms are likely making a profit on their EV business, meaning a crunch is inevitable.
"Among the little over 120 EV brands that are selling EVs in China, we think about 20 to 30 will probably be financially viable in the long term," he added.
The red ocean
There are signs this thinning of the herd has already begun.
Several smaller Chinese EV makers have run into financial difficulties in recent months, with Shanghai-based WM Motor filing for pre-restructuring last October and the company behind the premium EV brand HiPhi suspending production in February for at least six months.
An Aiways EV on display at Sweden's eCarExpo.
Xinhua News Agency/Getty Images
Tencent-backed Aiways, meanwhile, is reportedly moving its operations from China to Germany, with sources familiar with the matter telling Autocar the move was due to intense competition and pricing pressure back home.
EV parts suppliers are also feeling the squeeze as car makers take longer to pay the bills.
Bloomberg reported this month that both Nio and Xpeng are taking longer to clear their receipts payable — something Alvarez & Marsal consultant Lin Zhu warned was pushing smaller suppliers to the brink.
"We've seen more car components producers approaching us to improve their performance and some of them are thinking about offloading unprofitable businesses," Zhu told Bloomberg.
"The weak ones in the supply chain will face a high risk of being kicked out of the game," she added.
"It is a matter of existing at the moment. It's becoming more and more difficult for European manufacturers in China," Linda Jackson, CEO of French brand Peugeot, told the Financial Times Future of the Car Summit. Peugeot did not respond to BI"s request for comment on whether it is currently selling EVs in China.
"To be there, you either enter into what I would call the red ocean (of losses), or you stand back, reduce your volume and wait to see where the market goes," she said.
"There will be consolidation, even in the Chinese market … a large majority of Chinese electric vehicle startups are not making any money," Jackson added.
A fight to survive
A BYD Seagull EV. The Tesla rival reported a fall in sales in its first-quarter earnings.
NurPhoto/Getty Images
Paul Li, the CEO of China-based EV tech firm U-Power, told BI that Chinese EV companies needed to change their business models to become profitable and avoid extinction.
"The carmakers can find a lot of new ways to make a profit rather than just selling the car," Li said.
"Batteries can become a service, charging can become a service, finance, insurance, and autonomous driving can all become a service," he added.
Ultimately, the biggest challenge Chinese EV makers face is differentiating themselves from the hundred-plus other companies fighting for customers — and until they do, the price war will likely continue, Stephen Dyer of AlixPartners told BI.
"Most of the companies are not clearly differentiated. And if your product is not differentiated, it is going to end in a price war," he added.
Tesla is hiring for its Autopilot division following weeks of mass layoffs.
The automaker listed several engineering roles after scrubbing its jobs board earlier in May.
In April, Elon Musk stressed the need for head count and cost reduction.
Tesla is looking to grow its Autopilot division after weeks of mass company layoffs.
The automaker listed over a dozen roles involving its driver-assist software and AI on its careers page over the course of the week. The roles are based out of Tesla's engineering headquarters in Palo Alto, California, and include software engineering job functions for Autopilot's internal and external user interfaces, as well as AI research roles on the Autopilot team.
Tesla, which dissolved its PR team years ago, did not respond to a request for comment.
Earlier in May, Tesla removed over 3,000 job postings on its site, only a few weeks after the company began a series of layoffs. Up until this week, the main roles listed on Tesla's site had been positions within its manufacturing development program, a training program based out of community colleges near the automaker's three US factories. The program is designed to equip workers with the necessary skills to transition to a production associate role at the factory.
Tesla CEO Elon Musk told staff he planned to cut more than 10% of the company's total workforce on April 14. Over the past few weeks, Tesla has continued to lay off staff, even cutting and then reportedly rehiring some of its Supercharger staff. In May, Tesla also began rescinding some offers for incoming full time employees, as well as interns.
Musk told executives in April that Tesla needs to be "absolutely hard core about headcount and cost reduction," according to a report from the Information.
The company has faced headwinds in recent months due to an industry-wide slowdown in EV sales. Musk has said the company is "between two major growth waves" and has promoted Tesla's self-driving technology as a key driver of growth. The CEO said in April that the company would unveil its first robotaxi on August 8.
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