One of the largest Chinese developers, Evergrande, has released its first electric car as part of the company’s reorientation towards the automotive business.
Evergrande posted a one-minute video on the Chinese Weibo social network showing the process of assembling the Hengchi 5 all-electric SUV at its Tianjin plant. The company said that the new product was released ahead of schedule – 12 days ahead of schedule.
The electric car has a range of about 700 km on a single charge, and it will cost customers about $31,450. As the South China Morning Post notes, this is cheaper than the models of Evergrande’s main competitors in China – NIO, Xpeng Motors and Li Auto. Hengchi 5 can also replace compact SUVs with internal combustion engines such as the Audi Q3 and BMW X1.
Shares in the automotive division of China Evergrande New Energy Vehicle Group rose 9.83% on January 14, up 50.20% in the month.
In October, the head and founder of Evergrande, Hui Ka Yan, said that the company intends to make the car business the main one over the next 10 years. The company plans to supply the market with 1 million electric vehicles annually by 2025 and 5 million by 2035. For comparison, Tesla, the largest manufacturer of electric cars, delivered 936,172 vehicles to the market last year.
Evergrande is the world’s most indebted developer, with debt in excess of $300 billion. This includes about $19 billion in international bonds that ratings agencies declared defaulted in December after the company defaulted on two coupon payments after the grace period expired.
The Chinese authorities demanded that Hui Ka Yan pay off his debts from his own funds. In November, the founder of the company paid off $1.1 billion of its debts. To do this, he sold off part of his assets, including luxury real estate and works of art. In December, Reuters reported that Chinese authorities had begun checking the assets of the entrepreneur and his company to find out if the developer needed help from the state.
Prior to this, Evergrande had set up a risk management committee, which included representatives from several Chinese state-owned companies, to interact with their creditors. The day before, the developer’s bondholders agreed to grant him a $707.5 million deferral of payments. Evergrande was to pay coupons and redeem the bonds on January 8.
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