Evergrande Group (HKG: 3333), one of the biggest real estate developers in China, announced its push into the electric vehicle (EV) industry in 2018, when Hui Ka Yan, its chairman, said the company aimed to become the world’s biggest EV maker within three to five years.
Fast forward to today: Evergrande Health (HKSE: 0708), the EV unit of the Chinese conglomerate, has announced that its first EV model, the Hengchi 1, will debut in the first half of 2020, while mass production will start in 2021.
However, the firm saw losses of RMB 4.43 billion (USD 620 million) in 2019, up from RMB 1.43 billion (USD 201 million) in 2018, according to a filing to the Hong Kong stock exchange on March 30.
The firm has invested over RMB 20 billion (USD 2.8 billion) in developing EV models in 2019, with plans to pour in another RMB 15 billion this year and RMB 10 billion in 2021, despite the authorities initial plans for phasing out of NEV subsidies from 2020 onwards.
As the Chinese government has decided to extend NEV subsidies to help the badly hit EV sector, could the real estate tycoon succeed in the EV industry and become another serious competitor to Tesla?
To learn more, check out the fourth episode of China’s Tesla Challengers, a series that looks at the country’s leading EV companies.
Check out our other episodes:
Episode one: Will Nio live up to its hype?
Episode two: These Chinese EV makers are Tesla’s biggest problem
Episode three: Meet the world’s largest EV battery maker powering Tesla’s ambitions
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