China’s Evergrande New Energy Group started deliveries of its Hengchi 5 EV. The company’s first 100 customers received their cars on Saturday according to its official Wechat account. The company is a unit of the heavily indebted property-developed China Evergrande Group.
The product was launched at a plant in the northern city of Tianjin last month. Evergrande is aiming to shift the group’s primary business from real estate to the automobile venture over the next decade, with plans to make 1 million vehicles by 2025. It has said it would start mass production of its second EV model in the first half of 2023 and a third in the latter half of next year. The Hengchi 5 sport-utility vehicle sells for 179,000 yuan ($24,690.00).
Last month, the company started mass production of its first EV model. The vehicle was first unveiled last year. Chairman Hui Ka Yan has vowed to shift within 10 years the group’s primary business from real estate to the automobile venture, which has itself struggled for capital. The company previously said it aimed to make 1 million vehicles a year by 2025. It started taking non-binding pre-orders for the Hengchi 5 sport-utility vehicle in July after delaying mass production from June to the third quarter.
In July, the company stated that it received 37,000 pre-orders. The electric vehicle (EV) unit of Evergrande started to accept non-binding pre-orders two weeks ago, with buyers paying 1,000 yuan ($148.13) as a deposit for the pure-electric sport-utility vehicle priced from 179,000 yuan.
Mass production of the Hengchi 5 was delayed to the third quarter from June, according to company executives’ recent statements. While its parent Evergrande Group has been reeling under more than $300 billion worth of liabilities. The automaker also released the names of its suppliers, which include Chinese battery powerhouse Contemporary Amperex Technology, or CATL, as well as foreign players like Germany’s Bosch — the world’s top auto parts maker and Japan’s Jtekt and industrial robot maker Fanuc.
Its electric vehicle arm has been preparing for mass production and sales with backing from Chinese tech group Tencent Holdings and numerous other investors. But big names like BYD and Tesla already control much of the Chinese EV market, and it is unclear how Evergrande can set itself apart from the other emerging players all fighting for a piece of the pie. Evergrande also faces headwinds in its mainstay real estate business. More would-be homebuyers are holding off as Evergrande and other major developers grapple with a cash crunch following China’s clampdown on the real estate market.