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China Evergrande sticks to its world's biggest EV maker pledge

Hong Kong

CHINA Evergrande Group didn't manage to make good on its promise to deliver a first "pure battery" electric vehicle (EV) by June. But the property behemoth isn't backing away from its claim that it can become the world's largest EV manufacturer in three to five years.

Addressing media in Hong Kong following the release of first-half earnings for Evergrande Health Industry Group Ltd, chief financial officer Pan Darong said that was still the plan.

Evergrande has spent more than US$3.6 billion since late last year on an array of EV-related companies, including an interest in a maker of in-wheel motors, a stake in a battery manufacturer, part of a Swedish firm focused on intelligent cars and even a car sales network. Although Evergrande is China's second-largest developer by sales, in March it said it wants to be the world's biggest maker of electric cars. Most of its EV investments have been done through Evergrande Health.

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Peng Jianjun, an executive director of the medical unit, said on Friday that one focus would be on self-driving cars and another on the mid- to ultra-luxury end of the market. Evergrande also plans to spend another 6 billion yuan (S$1.2 billion) this year on EV development and expects R&D costs to rise in the second half.

The company also isn't concerned by the reduction in government EV subsidies. It's "a big positive factor for the industry", Mr Peng said. "It helps to make the industry fairer and more market-oriented."

Evergrande Health reported revenue for the six months ended June 30 of 2.6 billion yuan and a loss of 2 billion yuan versus a 200.3 million yuan profit in the first half of 2018. The company earlier this month forecast the plunge into the red and said it was primarily due to the development of its new energy vehicle business. BLOOMBERG