Evergrande’s bizarre plan to beat Tesla

The real estate giant has been collapsing for months. But now it’s planning a shocking comeback — and looking to beat Elon Musk at its own game.

Controversial Chinese real estate giant Evergrande hopes to put months of chaos behind it with the launch of a surprising new product.

In 2021, the real estate heavyweight earned the unwelcome title of the world’s most indebted real estate company after pile up huge debts of about $A408 billion.

For months, it teetered on the brink of collapse, with some pundits claiming the company was heading into its “Lehman moment” and fearing it could spark a global financial crisis given the company’s sheer size.

Since Evergrande’s woes began, a slew of other high-profile companies have also found themselves in trouble, including Fantasia, Modern Land, Kaisa Group Holdings and more, with insiders growing concerned that Evergrande led to an “contamination”.

But so far, it’s managed to defy the odds and avoid a collapse — and now it’s launched its first vehicle after bragging that it would take over billionaire Elon Musk’s Tesla company as the largest electric car maker. in the world.

China Evergrande New Energy Vehicle Group Ltd – which is owned by parent company China Evergrande Group – is now taking pre-orders for the Hengchi 5 electric SUV, following an online pre-sale presentation earlier this week.

It is the company’s first vehicle since the car factory launched in 2018, promising to acquire Elon Musk’s Tesla within five years.

The Hengchi 5, which is designed to cover 602 kilometers on a single charge, comes with a price tag of 179,000 yuan ($A39,346) – significantly cheaper than Tesla’s Model Y, which is priced from $A72,300 excluding costs for use on the road .

“We aim to produce world-class smart luxury SUV electric cars with a price tag of less than 300,000 yuan,” said Evergrande Auto President Liu Yongzhuo during the presentation, adding that the company has “made tremendous efforts over the past three years” to “integrate a high-quality Chinese EV through global wisdom”.

“Hengchi 5 will be the best electric SUV car in this category.”

The vehicles will be available from October, with a target to sell 10,000 by 2023.

But Chen Jinzhu, chief executive of vehicle consultancy Shanghai Mingliang Auto Service, told the South China Morning Mail it was a risky move by the company.

“The price is attractive. Evergrande aims for a large sales volume [of the Hengchi] to improve the group’s financial conditions,” he told the publication.

“If it can’t make its first production car a success, Evergrande Auto is unlikely to survive the fierce competition.”

Other pundits have also speculated that the car gamble for Evergrande could turn into a pear-shaped one as it is overdue for the electric vehicle lot and launches at a time of rising costs and serious supply chain disruptions.

Evergrande in crisis

The surprising announcement comes after months of turmoil for Evergrande, which has struggled to repay its massive debt since mid-2021 and has missed a string of payments to creditors.

At the end of last year, it emerged that Evergrande founder Hui Ka Yan had a billionaire lost a whopping $17.2 billion of his own wealth after diving into his fortune to repay debts and keep the company afloat.

Chinese creditors have also sued Evergrande for more than $13 billion in alleged arrears, with insiders claiming it was a key sign that local creditors had lost confidence in the company’s ability to cope with the ongoing crisis.

In January of this year, Evergrande continued to send shockwaves through global markets abruptly announcing that its shares would be withdrawn from trading.

The company is tipped to announce its debt restructuring plan at the end of July.

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