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China's Evergrande unveils six EVs as race to beat Tesla heats up

Indebted developer has five-year goal to become largest maker of electric vehicles

One of the models unveiled by Evergrande as it seeks to further its EV ambitions. (Photo courtesy of Evergrande Group)

HONG KONG -- Chinese property developer Evergrande has given further proof of its goal of making a big shift into electric vehicles, unveiling six different models as it vows to become the world's largest EV producer within five years.

The Shenzhen-based company, one of China's top three property developers, ventured into the EV business two years ago and has spent tens of billions of dollars on acquisitions, research and building factories.

Evergrande's move is also the latest sign of intensifying competition in China's much-hyped EV industry this year, with startups racing for IPOs and traditional carmakers starting to roll out new models to take on industry leader Tesla of the U.S.

In a high-profile manner typical of founder Xu Jiayin, China's third richest man, Evergrande's six models under the name "'Hengchi" cover all major passenger car categories including sedan, sport utility vehicles (SUV) and multi-purpose vehicles (MPV).

"The group strives to become the world's largest and most powerful new energy vehicle group within 3 to 5 years," Evergrande said in a stock filing on Monday.

Evergrande said it would change the name of its Hong Kong listed subsidiary "Evergrande Health" to "Evergrande Auto" to reflect the importance of its EV business.

A spokesperson added that the first model is expected to enter the market in the second half of 2021. The company expects to complete its production facilities in Shanghai and Guangdong Province by the end of this year.

Evergrande announced its intention to diversify its business in 2018 as Chinese authorities attempted to cool an overheating property market.

Unlike most automakers who rely on their own teams for research and development, Evergrande has used acquisitions and partnerships to create an industry chain covering batteries, charging facilities, designs and dealerships in just two years.

Its EV ambitions have caused controversy among investors and analysts. Evergrande spent 15 billion yuan on its EV business in 2019, losing 5.3 billion yuan, according to the group's annual results. The company plans to spend another 20 billion yuan over the next two years. This is despite the fact that Evergrande sat on a debt pile of 800 billion yuan at the end of 2019 -- the highest among any developer, with 372 billion yuan maturing this year, according to regulatory filings.

"Money is of course important in making cars, but the ability of the management team is more important," said Feng Linyan, an analyst at Beijing-based research company EqualOcean, as she believes the property developer lacks the spirit for innovation and the entrepreneurship to make the new generation cars that are appealing to customers.

Fang suggested Evergrande was too late to the game as most emerging EV companies -- including Li Auto, which recently made its trading debut in US, Nio, Xpeng Motors and WM Motor -- have already launched several models.

"Users should have already established their preferences by now," she said, adding that the models launched by Evergrande are not particularly unique.

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