Evergrande Hengchi 5 electric SUV rolls off the production line after long delay7. July 2022
The first full-electric car from China’s Evergrande Group left the production line in mid-January. This marks an important step for the estate developer, which doubled its investment in its EV business since last year. The Hengchi 5 is an all-electric compact SUV with a range of up to 700 kilometers on one battery charge. Evergrande New Energy Vehicle, which is responsible for building the vehicle, announced on January 2022 that it would begin mass production at its Tianjiin plant. Priced below 200,000 yuan (about $31,440), the EV is cheaper than the 300,000 yuan price mark, where Tesla’s strongest competitors from China, NIO, Xpeng Motors and Li Auto, are located. The Hengchi 5 is also being promoted by Evergrande as an alternative or replacement to internal combustion engine compact SUVs like the Audi Q3 or BMW X1. Vehicles and components must be awarded a CCC certificate in order for the products to be exported to China or manufactured locally.
“If the Hengchi 5 sells well, it would be a glimmer of hope for Evergrande after the company has just managed to stay afloat for the past few months,” said Eric Han, a senior manager at Shanghai-based business consultancy Suolei. The long-delayed sales launch of the SUV marks a year of concern for Evergrande investors. Those had put up an additional $3.85 billion in funding on top of the IPO, in an effort to, as company founder Hui Ka-yan said, beat Tesla to the world’s biggest EV sales market. Still, Evergrande fell short of the second-half 2021 business figures it had targeted a year earlier.
To get to mass production of the Hengchi 5, Evergrande needed a large sum of cash. In mid-2021, the EV business had to suspend production after failing to pay suppliers. The Shanghai plant, one of three in China, was temporarily shut down and shares were sold to employees to finance it. Evergrande then unveiled three more models in February 2021, in addition to the six vehicles already unveiled in August 2020. The automaker plans to produce between 500,000 and 1 million EVs annually at its Shanghai, Tianjin and Guangzhou plants. Due to a lack of funding, Evergrande is initially focusing only on the Hengchi 5 and Hengchi 6 models.
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