The world’s most indebted property developer is seeking escape from its enormous liabilities through unusual means: a new line of budget electric vehicles (EVs).
Embattled Chinese real estate company Evergrande delivered its first 100 Hengchi 5 electric SUVs over the weekend, Reuters reported.
The company has pitched its pivot to the EV market as a means of getting out from under its $300 billion in debt, according to Beijing-based tech news site Pandaily.
At about $26,000, Evergrande’s new SUV is about half the price of Tesla’s competing Model Y.
But the company’s move to EVs reflects the simmering turmoil in China’s housing market and larger economy, which threatens to spill far beyond China.
Evergrande entered China’s burgeoning EV market in mid-2018 but began to view it as a lifeline after the country’s real estate crisis began in 2022, the South China Morning Post reported.
Over the next 10 years, the company aims to become primarily a carmaker, with its real estate business relegated to auxiliary status, according to Pandaily.
That’s a tough road, Chinese vehicle consultancy head Chen Jinzhu told the Morning Post.
“If it cannot make its first production car a hit, Evergrande Auto is unlikely to survive the fierce competition,” Jinzhu added.
Evergrande became a watchword last year for the slow collapse of China’s property sector, which had relied on two decades of steadily increasing prices, The…
