Despite his lofty ambitions and Evergrande NEV’s rich valuation, Hui has repeatedly pushed back car-production targets. The tycoon’s coterie of rich friends, among others, have stumped up billions, but making cars – electric or otherwise – is hard, and hugely capital intensive. NIO’s gross margins only flipped into positive territory in mid-2020, after years of heavy losses and a lifeline from a municipal government.

Speaking on an earnings call in late March after Evergrande NEV’s full-year loss for 2020 widened by a yawning 67 per cent, Hui said the company planned to begin trial production at the end of this year, delayed from an original timeline of last September. Deliveries aren’t expected to start until some time in 2022. Expectations for annual production capacity of 500,000 to 1 million EVs by March 2022 were also pushed back until 2025. Still, the company issued a buoyant new forecast: 5 million cars a year by 2035. For comparison, global giant Volkswagen delivered 3.85 million units in China in 2020.

It’s not just Evergrande’s delayed production schedule that’s raising eyebrows. A closer look under the company’s bonnet reveals practices that have industry veterans scratching their heads: from making selling apartments part of car executives’ KPIs, to attempting a model line-up that would be ambitious for even the most established carmaker.

A closer look at Evergrande NEV’s operations reveals the extent of its unorthodox approach. While it established three production bases – in Guangzhou, Tianjin in China’s north, and Shanghai – the company doesn’t have a general car assembly line up and running. Equipment and machinery is still being adjusted, according to people who have seen inside the factories but don’t want to be identified discussing confidential matters.

In a response to questions from Bloomberg, Evergrande NEV said it was preparing machinery for trial production, and would be able to make “one car a minute” once full production is reached.

Its workers are also being asked to help sell real estate, the backbone of the Evergrande empire.

New hires are required to undergo internal training and attend seminars that drill them on the company’s property history and have nothing to do with car making. In addition, employees from all departments, from production-line workers to back-office staff, are encouraged to promote the sale of apartments, whether through posting ads on social media or bringing relatives and friends along to sale centers to make them appear busy. Managerial-level staff even have their performance bonuses tied to such endeavors, people familiar with the measure said.

Meanwhile, the ambitious targets have Evergrande NEV turning to outsourcing and skipping procedures seen as normal practice in the industry, people with knowledge of the situation say.

While it’s hiring aggressively and recently scored Daniel Kirchert, a former BMW executive who co-founded EV start-up Byton, the firm has contracted most of the design and R&D of its cars to overseas suppliers, some of the people said. Contracting out most design and engineering work is an unusual approach for a company wanting to achieve such scale.

One of those companies is Canada’s Magna International, which is leading the development of the Hengchi 1 and 3, one of the people said. Evergrande NEV has also teamed with Chinese tech giants Tencent Holdings Ltd. and Baidu Inc. to co-develop a software system for the Hengchi range. It will allow drivers to use a mobile app to instruct the car to drive via autopilot to a certain location and use artificial intelligence to switch on appliances at home while on the road, according to a statement last month.

A spokesperson for Evergrande said it was working with international partners including Magna, EDAG Engineering Group and Austrian parts maker AVL List in developing “14 models simultaneously.” Representatives from Magna didn’t immediately respond to a request for comment. A Baidu spokesperson said the company had no further details to share, while a representative for Tencent said the software venture is with a related firm called Beijing Tinnove Technology that operates independently. Tinnove didn’t respond to requests for comment.

Rather than staggering model releases, Evergrande NEV appears to be rolling out every type of car all at once under its Hengchi brand, which sports a roaring gold lion on the badge and translates loosely to ‘unstoppable gallop.’ The nine models being launched span almost all major passenger vehicle segments from sedans to SUVS and multipurpose vehicles. Prices will range from about 80,000 yuan (US$12,000) to 600,000 yuan, although the final costs could change, a person familiar said.

That’s a completely different product development strategy to EV pioneers like Tesla, which only has four models on offer. NIO and Xpeng have also chosen to focus on just a handful of marques, and even then are struggling to break into the black.

“The market has proved the effectiveness of the ‘one product in vogue at one time’ strategy,” said Zhang Xiang, an automobile industry researcher at the North China University of Technology. “Evergrande is offering many products and expects a win. There’s a question mark over whether this will work.”

Without any long-term carmaking nous, Evergrande has issued uncompromising directives to meet its latest production targets, according to the people. Two models, including the Hengchi 5, a compact SUV that rivals Xpeng’s G3, are targeting mass production in a little over 20 months. To hit that timing, certain industry procedures, like making mule cars, or test bed vehicles equipped with prototype components that require evaluation, may be skipped, people familiar with the situation said. Evergrande told Bloomberg it has entered a “sprint stage toward mass production.”

As it is, Bloomberg could only find one instance where the Hengchi 5 has been showcased in public, in photos and grainy footage released by Evergrande in February as the cars drove around a snow-covered field in Inner Mongolia. The company’s shares surged to a record.

Glossing over those steps is unusual, said Zhong Shi, a former automotive project manager turned independent analyst.

“There’s a standard engineering process of product development, validation and verification, which includes several laboratory and road tests” in China and everywhere else, Zhong said. “It’s hard to compress that to shorter than three years.”

While there’s no suggestion Evergrande’s approach violates any regulations, its stock-market run could be in for a reality check. After similarly hefty market gains, some EV start-ups in the US that have yet to prove their viability as revenue-generating, profitable entities have lost their shine over the past few months amid concern about valuations and as established carmakers like VW move faster into EV fray.

The industry’s multibillion-dollar surge also hasn’t escaped Beijing’s attention. Evergrande NEV shares dipped lower last month after an editorial from the state-run Xinhua news agency highlighted concerns about how the EV sector is evolving. Of particular worry are companies that are shirking their responsibility to build quality cars, a blind race by local governments to attract EV projects, and high valuations by companies that have yet to deliver a single mass-produced car, according to the missive, which named Evergrande specifically in that regard. “The huge gap between production capacity and market value shows there is hype in the NEV market,” it said.

Still, Evergrande NEV’s stock has gained 18 per cent since then, buoyed by the outlook for China’s electric-car market. EVs currently account for about 5 per cent of China’s annual car sales, BloombergNEF data show, with demand forecast to soar as the market matures and electric-car prices fall. EV sales in China may climb more than 50 per cent this year alone, research firm Canalys said in a February report.

With competition also on the rise, some outside Evergrande NEV’s loyal shareholder base remain sceptical.

“The market is getting crowded but unless you have a preferred lane, there’s not much chance to win,” Automobility’s Russo said. “Maybe there’s some synergy with the property businesses but right now it’s an EV story, and a pretty expensive one.”