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Evergrande rolls out six new-energy vehicles

Hu Yumo
The Chinese property developer unveiled its first batch of green cars on Monday. Lofty ambitions aside, analysts say Evergrande faces a tough road into the auto market.
Hu Yumo

Chinese property developer Evergrande unveiled six new-energy car models on Monday as the company aims to further develop its business in China's green car market.

The company said it's developing new-energy vehicle business at full speed and the six models are the first batch under its car brand, Hengchi. The models cover passenger carmakes such as sedan, sport-utility vehicle and multi-purpose vehicle.

Evergrande, best known as a property developer, entered the field of new-energy vehicles two years ago. In June of 2018, Evergrande Health Industry Group Ltd acquired 45 percent of new-energy vehicle startup Smart King Ltd, as part of the company’s diversification into the sector. 

Evergrande has ambitious goals in the new-energy vehicle sector, but industry insiders point out challenges ahead.

On July 27, the Hong Kong-listed company announced that it had changed the name of Evergrande Health Industry Group Ltd to China Evergrande New Energy Vehicle Group Limited, or simply Evergrande Auto. The company said the change reflects its new business focus on vehicles.

The company said it strives to become the world’s largest and most powerful new-energy vehicle group within three to five years. It has built an industry chain covering power battery, motor powertrains, advanced vehicle manufacturing, vehicle sales and smart charging.

In August last year, Evergrande announced its new-energy vehicle brand named Hengchi. According to the plan, vehicles under this brand will be mass-produced starting from 2021. In November last year, the company said it will invest a total of 45 billion yuan (US$6.4 billion) by 2021 into electric vehicles. The goal is to become the world's largest new-energy carmaker in three to five years, with annual sales reaching 1 million units in five to 10 years.

According to its latest announcement, the firm has implemented a global integrated research and development model to coordinate research and development work in China, Sweden, Germany, the United Kingdom, the Netherlands, Austria, Italy, Japan, South Korea and other countries.

Industry analysts say that Evergrande faces challenges when it comes to consumer choice, market performance and future profitability.

Li Yanwei, an analyst at the China Automobile Dealers Association, said that among the six new energy models unveiled on Monday, four of them are large vehicles which are not suitable for battery drive. Li said that the other two models are A-class cars but need to compete with Chinese automaker such as BYD, Geely, and BAIC BJEV.

Zhang Xiaofeng, an independent market analyst, said that Evergrande will need to invest heavily in the six models, while future profitability is uncertain. Market competition in the future is also fierce and it's hard to say whether Evergrande can become a winner.

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