Evergrande is a business group in the field of real estate in the world. According to the company’s plan, Evergrande has the goal of becoming an extremely ambitious electric vehicle manufacturer but so far they have not yet managed to sell one.
Chinese electric vehicle manufacturer Evergrande is one of the highlights of the 2021 Shanghai Motor Show, displaying nine new models at the same time. The company’s electric models are housed in one of the largest booths, opposite German carmaker BMW. Everything about Evergrande is very impressive, from the way the brand is presented to each car. But behind this flashiness is a strange fact: Evergrande has not sold a car yet.
According to Bloomberg, over the past 12 months, Evergrande’s stake in the Hong Kong Stock Exchange has risen 1,000%, bringing in billions of dollars. As a result, Evergrande’s market capitalization is $ 87 billion, surpassing America’s car giants like Ford and General Motors.
In March 2019, Hua Gia An, president of Evergrande and one of the richest people in China, pledged to beat Elon Musk and become the world’s largest electric vehicle manufacturer in the next 3-5 years. . At the time, the new Tesla Model Y crossover just made its world debut. Two years later, Tesla established a base in China, built its first factory outside the United States and delivered about 35,500 vehicles in March 2021, thereby consolidating its position in the market.
Despite his high ambitions, Mr. Hua has repeatedly lagged behind in achieving his electric vehicle manufacturing goals. Car manufacturing is a difficult field and requires huge capital. For example, the Nio China brand’s business results only turned positive in mid-2020, after years of serious losses.
At the end of March 2021, after Evergrande reported a 67% loss in 2020, Hua said the company would produce electric cars later than originally planned. Delivery is expected to wait until 2022 before it can begin. The expected annual production of 500,000 to 1 million electric vehicles by March 2022 has also changed and is now set for 2025. However, the company has come up with an impressive new forecast of producing 5 million units by 2035.
Evergrande is just a “financial bubble”?
All of these factors remind people of the situation with Tesla: the Chinese electric car company has delayed production plans but investors are still pouring money. Thanks to the enthusiasm of investors, Tesla’s boss became the richest man in the world for an instant and made some fear that it might just be a financial bubble with the risk of breaking down at any moment. .
However, Evergrande’s story is just at the beginning and no one is sure it will end like a financial bubble. Evergrande and its electric vehicle brand Hengchi have the full opportunity to become one of the world’s top electric vehicle manufacturers if they stop disappointing investors with the continual change of plans.