Evergrande Health vows to challenge the likes of Tesla, become the world’s biggest electric vehicle maker
- Company to continue investing in business despite reported net loss of 1.43 billion yuan for 2018
Evergrande Health Group, a unit of Chinese developer Evergrande Group, said on Friday it aims to become the world’s largest maker of new generation vehicles, and will continue to plough money into the business amid a reported net loss of 1.43 billion yuan (US$213.6 million) for 2018, down from a profit of 301 million yuan the previous year.
“New generation cars replacing petroleum-fuelled ones will be the inevitable trend, and Evergrande has chosen the right path,” said Peng Jianjun, the vice-chairman of Evergrande Health. “We’ve acquired top-notched resources and that saves us a lot of time growing from scratch.”
Evergrande Health, which aims to take on the likes of Tesla, said it will put its first electric vehicle, which has been tested, into mass production in June at its Tianjin plant. It will aim to boost its production capacity up to a million cars within three years; its Shanghai and Guangzhou factories are under construction.
“We have so far invested over 20 billion yuan in new generation cars and we have acquired another 10 billion yuan in financing recently. With Evergrande [Group] backing the business firmly, we will break even earlier than industry peers,” said Pan Darong, the company’s chief financial officer.
But the officials did not provide a specific date for when the new business would start making money.
Electric carmaker Faraday Future gets opportunity to rebuild after settling dispute with main investor Evergrande
Evergrande Health said in a filing to the Hong Kong stock exchange that a net loss of 1.73 billion yuan in the new energy vehicle segment was the main reason for its poor result.
“The group has accounted for losses in its investment in Smart King,” the company said in the statement, referring to an investment by Evergrande Group chairman Hui Ka Yan in California-based carmaker Faraday Future.
In June 2018, Evergrande announced it had bought a 45 per cent stake in Smart King, which fully controls Faraday, for a total investment of US$2 billion over three years through Evergrande Health.
Evergrande pays US$853.85 million for stake in troubled electric vehicle maker Faraday Future
However, in October Evergrande accused Faraday of manipulating it into paying US$700 million ahead of schedule, while the carmaker said Evergrande was deliberately delaying investment to starve it of funds and obtain its intellectual property.
After a legal dispute, in January this year Evergrande agreed to a reduced stake and 32 per cent stake in Faraday. It has so far invested US$800 million in the company.
In March, the company paid 500 million yuan for a 70 per cent stake in Netherlands-based in-wheel motor maker e-Traction.
