Before debt problems, China Evergrande’s ambitious auto targets stunned the industry

SHANGHAI – At the Shanghai auto show in April, the booth of the China Evergrande Group’s new energy vehicle unit was hard to miss.

One of the biggest exhibits of the event, in a prime location across from BMW, the developer-backed unit showcased nine concept vehicles under the “Hengchi” brand, which translates to “eternal speed “.

“There has never been an automaker capable of delivering such a diverse product line in such a short time,” said Daniel Kirchert, who joined Evergrande NEV a few days before the auto show as a vice. -President, industry executives and journalists. a speech at the event.

Analysts and industry executives say there have long been questions about how Evergrande NEV, founded in 2019, would meet its lofty goals – President Hui Ka Yan had said he wanted to sell a million electric vehicles per year by 2025, a level Tesla Inc. is only expected to hit this year after 18 years of operation.

Six months after the auto show, doubts are stronger than ever as the company’s parent company struggles with more than $ 300 billion in liabilities.

“These goals would be really aggressive, almost impossible to achieve even for established and well-managed auto companies due to the capital and human resources required to even attempt to execute the plan,” said Tu Le, automotive analyst at Sino Auto Insights. .

Between 2019 and 2021, the NEV branch of Evergrande raised more than 50 billion yuan ($ 7.78 billion) from its parent company, as well as from investors such as Sequoia Capital China, the ride-sharing giant Didi Global. Inc. and the fund linked to Alibaba Yunfeng Capital.

It has announced 14 models and plans to have 10 factories in China and Sweden. So far he has built or built six, including one in Shanghai. A recent Reuters visit there found around 20 Hengchi electric vehicles for testing parked outside. But the company has yet to reveal a production model or sell a single vehicle.

In comparison, Nio and Xpeng, two of China’s most successful NEV startups in terms of sales.

Nio has four models and built its second factory. Xpeng has three and is expanding its production sites to four to two now. Tesla sells four models and has two operating vehicle assembly plants around the world, with two more going into service in Germany and Texas, a US state.

Evergrande NEV did not immediately respond to a request for comment.