In the recent unveiling of the Fortune Global 500 list for 2022, traditional automotive giants like Mercedes-Benz and BMW found themselves slipping in their rankingsIn stark contrast, companies within the new energy sector, such as Tesla and BYD, showcased remarkable advancements—Tesla surged up 150 places while BYD made its debut on the list, signaling a significant shift in the automotive landscape.

The rise of BYD symbolizes the broader ascent of China's new energy industry, which now commands a substantial presence among the world's leading companies in the sectorFrom 198 entities listed in 2017 to 214 in 2021, the trend is clear: China is rapidly solidifying its foothold in new energy, now accounting for nearly half of the global leaders in this arena.

As new energy companies proliferate globally, a certain wealth effect has come to the forefrontThese emerging enterprises are not just reshaping the automotive sector; they are also creating a new class of wealthy individuals.

On the global rich list, Tesla's founder, Elon Musk, has surpassed the likes of Bill Gates and Jeff Bezos to become the first individual in the new energy sector to reach the pinnacle of wealthIn China, discussions are circulating about whether the country's richest individual might soon hail from this booming realm, given the growing number of billionaires emerging from new energy ventures.

Indeed, among the ten Chinese billionaires who have seen their fortunes grow the most, eight are linked to the new energy sector, with six directly associated with electric vehicles.

Notably, Zeng Yuqun, Chairman of Contemporary Amperex Technology Co., Ltd. (CATL), saw his wealth rocket by 200 billion yuan—positioning him as the second-highest gainer among entrepreneursHis fortunes continue to swell, as highlighted by the recently released 2022 Hurun Global Rich List.

Statistics from Tonghuashun iFind reveal that as of late July, there were 57 chairpersons within China's A-share market whose stock holdings exceeded 10 billion yuan, nearly 20 of whom stemmed from the new energy supply chain

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This means that about one-third of these wealthy individuals are directly tied to the burgeoning new energy sector.

The wealth generated by these industry leaders extends beyond the rich list; it resonates with ordinary investors as wellCompanies like CATL and BYD, with market valuations surpassing one trillion yuan, have significantly altered the composition of the top ten market cap rankings on A-shares, traditionally dominated by financial and conventional energy stocks.

China boasts a staggering 197 million stock market investors, with an even larger mutual fund investor base reaching up to 720 millionTheir demand for wealth increase is intense, compelling some forward-thinking fund managers to invest heavily in new energy, consequently delivering substantial returns to investors.

For example, Yao Zhipeng, Director of Growth Style at Harvest Fund Management, was one of the early advocates of the new energy waveHe foresaw in 2014 that “an energy revolution was imminent,” which made waves in the investment communityWhen the “Ning Combination,” encompassing stocks like CATL, Sungrow Power Supply, and Longi Green Energy, gained traction in 2021, many realized that these key stocks had been in Yao's portfolio for years.

From 2015 to 2017, Yao guided Harvest Fund in launching proactive investment products such as the Harvest Environmental Low-Carbon Fund, Harvest Intelligent Automotive Fund, and Harvest New Energy New Materials Fund—pushing the boundaries of investment focus and uncovering core stocks of the “Ning Combination” ahead of time.

According to the quarterly reports, by the mid-2022, long-term returns for the three funds mentioned have exceeded 200%, with the Intelligent Automotive Fund achieving a remarkable increase of over 300% since inception.

This investment phenomenon is not merely enriching investors; it is empowering the new energy enterprises with capital, enabling them to innovatively compete on a global stage

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Indeed, the synergy between Chinese investment institutions and new energy companies has exhibited a noteworthy model of healthy interaction between capital and industry.

The pressing question remains: can the myth of wealth creation in the new energy sector sustain its momentum? Looking towards the future, failing to invest in new energy today is akin to missing out on real estate opportunities two decades agoEconomist Ren Zeping has strongly endorsed the investment potentials in new energy during a recent lecture.

Back in 2008, investing in new energy was a foreign and elusive conceptThat September, Warren Buffett acquired a stake in BYD, purchasing 225 million shares at HKD 8. At that time, many skeptics boldly predicted BYD's demise within five years.

By early 2014, Tesla’s shareholder communications announced record-breaking automotive sales for the fourth quarter of 2013. This news sent Yao Zhipeng into a frenzy, prompting him to declare within his social circles that an energy revolution was indeed forthcomingHowever, this optimism faced skepticism from naysayers who viewed his outlook as overly ambitious.

Time has invariably dispelled the doubtsToday, BYD stands proudly as a top player in China's new energy vehicle sector, while Tesla has birthed a global revolution in electric mobility, forever altering the automotive industry's landscape.

The emergence of the new energy sector has also catalyzed a transfer of wealthIn October 2021, Tesla's stock skyrocketed, pushing its value beyond one trillion dollars and elevating Musk to the status of the world's richest manIn China, billionaires in the new energy domain are undeniably closing the gap to the top position.

Zeng Yuqun, in the Hurun Chinese Billionaires List of 2021, amassed a fortune of 320 billion yuan, rendering him the third richest individual in ChinaJust a year prior, he was in 24th place with a mere 120 billion yuan—evidence of a staggering increase of 200 billion yuan in a single year.

Zeng Yuqun is not alone; numerous other billionaires from the new energy sector have witnessed exhilarating growth in their fortunes.

Wei Jianjun and Han Xuejuan, pivotal figures at Great Wall Motors, saw their wealth soar by 173 billion yuan in 2021, pushing them into 7th place on the wealth rankings, an astonishing leap of 89 spots

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Meanwhile, Wang Chuanfu’s fortune at BYD surged by 91 billion yuan, landing him the 20th position with an increase of 63 spots.

The Liu family associated with Hesheng Silicon Industry, along with Liu Hanyuan from Tongwei Co., and Liu Jincheng from EVE Energy, are other notable figures experiencing significant wealth accumulation attributed to explosive growth in the new energy sector.

Historically, the wealthiest individuals in China have consistently emerged in relation to prevailing industry trendsBetween 2005 and 2015, real estate boom propelled figures like Wang Jianlin and Xu Jiayin to the forefront of wealth rankings, while the internet era saw Jack Ma ascend to fame between 2008 and 2018.

Against the backdrop of China's dual-carbon policy, new energy-related sectors represent the most explosive segment of the nation’s prospective economyThe transition of global wealth from internet billionaires like Gates to new energy pioneers like Musk heralds the inevitability of a Chinese tycoon in this domain—it's merely a matter of time.

The transfer of wealth indicates the power of the era, a natural consequence of industry trendsWith the carbon neutrality objective announced in September 2020, new energy and its related industries have stepped into the limelight, with continuous advancements visible in the electric vehicle supply chain.

Yao Zhipeng opines that the current era of smart vehicles offers opportunities akin to the smartphone wave witnessed a decade agoThe penetration of electric vehicles remains in the S-curve phase, with projections suggesting it may exceed 70% by 2025. Even without accounting for industry-wide expansion, the potential for growth within the sector seems vast.

Investment professional Tian Guangyuan at Harvest Fund believes that within the realm of carbon neutrality, new energy will emerge as an indelible opportunity for this generation over the next decade to two decades—this is a historical moment that cannot be overlooked.

Mainstream estimates from Chinese institutions suggest that achieving carbon neutrality will require an astounding 150 to 300 trillion yuan in investments, averaging needs of 3.75 to 7.5 trillion annually

The Guanghua School of Management at Peking University provided more specific figures, highlighting a total need of 250 trillion yuan over the next three to four decades.

When gazing at the broader horizon, the current state and accomplishments of the new energy sector feel like only the beginning of an extensive journey toward carbon neutrality, presenting an expansive landscape for investmentsThe curtains on the new energy narrative of wealth creation have only just begun to rise.

As it stands, China has attained a leading stance across multiple domains in the new energy sectorBYD is on a trajectory to potentially surpass Tesla as the world's largest seller of electric vehicles; CATL holds a firm grip on the global power battery sales leaderboard for the first half of 2022, while LONGi Green Energy has consistently ranked as the largest single-crystal silicon manufacturer for years.

Yet, the grand narrative of new energy is tempered by the backstories of the entrepreneurs and their laborious journeysFor instance, BYD transitioned from obscurity to prominence through the unwavering dedication of Wang Chuanfu over two decadesSimilarly, Zeng Yuqun's CATL ascended to the pinnacle of lithium battery production merely seven years after its 2011 inception, with Zeng having ventured into new energy back in 1999.

Reflecting on the evolution of China's new energy landscape, it’s apparent that the monumental strides of individual enterprises hinge significantly on their leaders’ deft guidance, alongside robust capital support that helps propel entire industries forward.

For instance, after its IPO, CATL successfully completed two rounds of private placements, raising a total of 64.7 billion yuan—these billions have been crucial to solidifying its central position in battery production.

Moreover, the emerging forces in the new energy vehicle market, although currently operating at a loss, are still recognized as globally competitive, with this viability backed largely by significant capital influx.

Capital often reveals inherent pricing potential; industries with promising futures draw investment that enables beneficial interactions between funds and physical enterprises—an aspect equity seekers cannot overlook.

Years before 2008, following Buffett’s investment in BYD, Harvest Fund astutely recognized the investment opportunities within the new energy framework

It swiftly formed a research team focused on energy transition, setting itself apart as one of the early institutions dedicated to this sector in depth.

By 2010, while interning at Harvest Fund, Yao Zhipeng diligently explored lithography; upon joining the firm a year later, he emerged as a researcher in the new energy and chemical sectorsHis profound expertise propelled his astute anticipation of market shifts, especially following a surge of Tesla sales in 2014, when Yao discerned the dawn of a new era.

Yao Zhipeng at Harvest Fund

With a philosophy grounded in action, Yao Zhipeng began drafting the frameworks for innovative products like the Harvest Intelligent Automotive and Harvest Environmental Low-Carbon Funds—preparing for their eventual market introduction.

Between 2015 and 2017, Yao spearheaded the introduction of pioneering investment funds such as the Harvest Environmental Low-Carbon Fund, the first dedicated fund for smart automotive investments, and the comprehensive Harvest New Energy New Materials Fund, which curated opportunities across various segments of the new energy industry.

In June 2018, when CATL debuted on the ChiNext Board, its initial performance left much to be desiredHowever, Yao regarded this stock as a gemBy the first quarter of 2019, it had already risen into the top ten holdings of the Harvest Intelligent Automotive FundSubsequently, CATL emerged as the largest holding for three key funds managed by Yao.

Beyond CATL, core stocks like BYD, Sungrow Power Supply, Longi Green Energy, and Enjie were prominent features in Yao Zhipeng’s portfolio throughout his management tenure.

For Yao, investing encapsulates the essence of aligning with prevailing trendsFund managers should operate as keen observers of life and society, continuously scanning potential future trends and societal transformations

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