China’s electric cars: unit of most indebted developer rolls out nine EV models, but no sign of launch

Daniel Ren
·3-min read

Evergrande New Energy Vehicle Group, the carmaking arm of the world’s most indebted developer, unveiled three new models amid ambitions of becoming the world’s largest electric vehicle (EV) maker.

The company, which unveiled six Hengchi-branded EVs in August, followed it up on Wednesday with a Class B luxury saloon, a Class C coupe and a Class B SUV, taking another important step towards making next-generation cars.

The company said in a statement that the unveiling of the three new models shows Evergrande’s determination and confidence in manufacturing great EVs.

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Evergrande New Energy’s Hong Kong-listed shares jumped 19.1 per cent to HK$58.7 on Wednesday, giving it a market capitalisation of HK$517.5 billion (US$66.8 billion), more than double that of its parent China Evergrande Group’s HK$213.2 billion.

Evergrande New Energy’s electric car factory in Tianjin. Photo: Handout
Evergrande New Energy’s electric car factory in Tianjin. Photo: Handout

Evergrande New Energy’s shares have climbed nearly 94 per cent so far this year.

“Evergrande New Energy’s share price has had a strong rally since January 2021,” analyst Kelly Zou of CGS-CIMB Securities wrote in a research note. “We think a further share price breakthrough will hinge on the market response to its official product launches.”

While none of the nine models unveiled so far has been assembled yet, the company said in August that the cars would hit the market either in the second half of this year or the first half of 2022.

Evergrande New Energy is currently designing 14 EV models under the Hengchi brand, which cover major passenger vehicle segments including sedans, SUVs and multipurpose vehicles. It said that the prices of these models will range between 800,000 yuan (US$124,250) and 600,000 yuan.

The company said it was targeting sales of 1 million units in 2025 with the aim of becoming the world’s largest EV builder. The company has set a goal of 100,000 units in 2022.

However, Evergrande’s carmaking capabilities have come under scrutiny from mainland authorities. In November, China’s provincial-level government officials were asked by the National Development and Reform Commission, China’s top economic planner, to investigate construction and production details of NEV projects by Evergrande and Baoneng Group as Beijing tightened its oversight of financial risks in the overheated industry.

Evergrande New Energy has invested a total 45.7 billion yuan in technology acquisition, R&D, production capacity development and component procurement, according to CGS-CIMB Securities.

Global leader Tesla reported sales of 137,459 Shanghai-made Model 3s in 2020, the bestselling EV in the mainland’s premium segment.

Under Beijing’s “Made in China 2025” industrial master plan, 20 per cent of all new cars hitting the country’s roads by 2025 will be new-energy vehicles, which could amount to 4 million units.

Last year, deliveries of new-energy vehicles – pure electric, plug-in hybrid and fuel-cell cars – jumped 12 per cent to 1.17 million units in China.

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