For a company whose forays into the world of electric vehicles has been marked by upheaval and disappointment, China’s Evergrand Group certainly has bold plans. According to Chinese news source EV Partner, company head Hui Ka Yan announced earlier this year that the objective is “to become the world’s largest and most powerful new energy vehicle group within 3-5 years.”
At present, it is the owner of NEVS, the successor to Saab automobiles which plans to introduce an electric car this summer. It has also purchased a 20% interest in Swedish performance company Konigsegg. A few years ago, it backed mercurial entrepreneur Jia Yueting, founder of Faraday Future, with a healthy dollop of cash, which Jia promptly blew through, leaving ruffled feathers and damaged feelings on all sides. Evergrande is now effectively Faraday Future’s biggest creditor, for whatever they may be worth.
Undaunted by all this, the company now says it is prepared to invest $23 billion to construct three factories in the city of Guangzhou. One factory will be capable of producing a million electric cars a year while the other two will manufacture battery cells, electric motors, and the other bits and pieces that go into making an electric car. It says the battery factory will have a capacity of 50 GWh of batteries per year.
Earlier this month, NEVS announced that it has acquired Protean Electric, a British company that specializes in building in-wheel hub motors. Those motors will provide the motive power for NEVS vehicles as well as any new cars forthcoming from Evergrande, according to Electrive.
Evergrande has been one of China’s largest builders of residential homes over the past decade and has generated a significant supply of ready cash from that business. With the Chinese government strongly supporting the transition to zero emissions electric cars, the company expects EVs will rapidly become a new profit center as the Chinese real estate market cools somewhat from its previous record-setting year over year performance. Much like Tesla, Evergrande is focusing on vertical integration which will allow it to control all the major components of the manufacturing process.
For instance, the province of Hainan has already announced it will ban the sale of fossil fueled cars by 2030 and completely upgrade its public service vehicle fleet to electric cars within the next year or two. Evergrande expects to benefit from the demand for electric vehicles that will result in just that one province alone, expecting other provinces will follow suit shortly.
Of course, that assumes other companies both foreign and domestic in China will allow room in the marketplace for the new kid on the block. The struggles of Faraday Future, Nio, and Lucid should provide a note of caution for those who think they can jump in to the EV game, spend a lot of cash, and emerge on top. The car business has made paupers of many entrepreneurs before and will do so again. Can Evergrande defy the odds? “We’ll see,” said the Zen master.
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