Tesla's Chinese challenger Evergrande slams brakes on electric car investments amid slowing sales

By Pearl Liu pearl.liu@scmp.com / https://www.scmp.com/business/companies/article/3037435/teslas-chinese-challenger-evergrande-slams-brakes-electric-car?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | November 26, 2019 11:57 AM SGT
China Evergrande plans to slow down its pace of investments in electric vehicles as sales of the environmentally friendly cars continue to fall in the mainland, but the company says it is on track to debut its "Hengchi 1" model next year.
The company, which sees itself as Tesla's main challenger in China, will invest a total of 45 billion yuan (US$6.4 billion) by 2021, chairman Hui Ka-yan said at a conference organised by Evergrande that brought together global car-related companies in Guangzhou on Tuesday.
The investments will be reduced from 20 billion yuan this year to 15 billion yuan next year and will be further cut to 10 billion yuan in 2021.
The company said that initial investments in the manufacturing industry are usually high as it involves setting up the plant and machinery and it begins to taper once the business is on track.
Hui, China's third wealthiest individual, said on Tuesday that the Hengchi 1, the first car developed by the company, will debut in the first half of next year and will go into mass production in 2021.
Hui Ka-yan, chairman of China Evergrande, is betting big on electric cars. Photo: Nora Tam alt=Hui Ka-yan, chairman of China Evergrande, is betting big on electric cars. Photo: Nora Tam
The company had already invested 16 billion yuan in EVs by June this year, officials said during the interim results briefing in August.
The country's third largest home builder has stated that its aim is to become the world's largest maker of new energy vehicles.
"We aim to become the world's largest and strongest maker of new energy vehicles in three to five years," Peng Jianjun, Evergrande's vice-chairman said in August.
And as part of that plan, the company's subsidiary Evergrande Health has gone on a shopping binge this year, acquiring controlling stake in National Electric Vehicle Sweden (Nevs) for US$930...