China Evergrande billionaire takes early losses in plans to overtake Tesla, dominate global electric car market
- Evergrande New Electric Vehicle Group losses widen in the first half as billionaire readies plants for mass production in 2021
- Company aims to produce up to 1 million units within three to five years to become ‘the biggest and strongest’ in the world
The venture posted a pre-tax loss of 2.68 billion yuan (US$389 million) in the first half this year, widening from 1.96 billion yuan a year earlier, based on China Evergrande New Electric Vehicle Group’s exchange filing on Thursday. That contributed to an interim net loss of 2.3 billion yuan, versus 1.5 billion yuan in the same period last year, for the listed unit.
“We had no technology or experience when we first entered the sector two years ago, but now with partnerships and acquisitions, we are aiming to become the world’s biggest and strongest EV maker in three to five years with much lower cost,” he said. “We are confident our cars will grab market share quickly.”
Sales of new-energy vehicles could hit 1.1 million units this year in the local market currently dominated by Tesla’s Model 3, before tripling by 2025, according to the China Association of Automobile Manufacturers.
Tesla starts delivery of made-in-China cars
Evergrande’s car plants in Shanghai and Guangzhou will be capable of producing 200,000 units a year each at the beginning, the company said, before reaching the target of 1 million units by the fifth year.
“The century-old global automobile industry is on the verge of major changes,” chairman Shi Shouming said in the exchange filing. “Many countries have started to turn to vehicle electrification one after another, which once again validates China’s forward-looking vision of the national directive on new energy vehicle development.”
China Evergrande, the nation’s third-largest developer based in Shenzhen, owns about 75 per cent of the Hong Kong-listed new energy vehicle and health care services entity. Hui is worth US$30.7 billion, according to Forbes.
The home builder has invested 3 billion yuan in the listed car entity, Liu said. The auto group itself has raised 10.3 billion yuan in capital in the first half this year and expects to get 22 billion yuan in fresh capital in the second half, he added.