Evergrande Health (HKG: 0708), the healthcare unit of Evergrande Group (HKG: 3333), on August 3 unveiled six new energy vehicle (NEV) models, as the deep-pocketed real estate developer plays catch-up with the top-tier Chinese EV upstarts Nio, Li Auto, and Xpeng.
The six models, under the Hengchi brand, include sedans, SUVs, multi-purpose vehicles, and crossovers. The release marks a long-awaited step closer to Evergrande’s goal of “becoming the world’s largest EV manufacturer in three to five years.”
The company said it is on the right track and the plants in Nansha, Guangzhou, Songjiang, and Shanghai will be operating later this year, with a production capacity of 200,000 each. Evergrande Health’s stock rose to a record-high of HKD 37.05 (USD 4.78) per share on the news, valuing the firm at over HKD 302.4 billion (USD 39.02 billion). The stock closed at HKD 34.80 on Tuesday.
Only last week, its board also suggested to rename the company to “China Evergrande New Energy Vehicle Group Limited”—Evergrande Auto for short—in a bid to emphasize its focus on EV manufacturing, according to a filing with the Hong Kong Stock Exchange.
In Evergrande Health’s 2019 annual report, it pledged to start mass production in 2021 and said it has 15 models in the pipeline. Last year, the EV business generated RMB 660 million (USD 93 million), producing losses of RMB 3.3 billion, nearly twice as much as 2018.
Despite Evergrande’s optimism towards its fledgling and cash-burning business, the road ahead is bumpy and packed with a bunch of strong players.
Read this: Video | Will real estate giant Evergrande succeed in the EV industry?
Lixiang, or “Li Auto” (NASDAQ: LI), a Beijing-based SUV EV-maker backed by Meituan-founder Wang Xing and ByteDance, went public last week, soaring nearly 50% on its Nasdaq debut, raising USD 1.1 billion.
Earlier this week, Guangzhou-based Xpeng Motors closed a pre-IPO fundraising round led by Alibaba, with participation of the Qatar Investment Authority. The company is also mulling a USD 700 million US IPO, which reportedly will kick off this month.
Nio (NYSE: NIO) claimed it delivered 3,533 vehicles in July, up 322.2% year-on-year, achieving a new monthly order record. Its stock has been on the rise since the end of June.
Apart from the high-flying EV startups, established manufacturers such as BAIC Group, BYD, and FAW Group, as well as US-rival Tesla, all bet big on the Chinese market. The race, however, has also seen ambitious brands crashing at high speed: Byton filed for bankruptcy and stopped operation in June, and Faraday Future recently bankrupted its founder.