Eyebrows raised as Evergrande says EVs will hit the road in 2022

China Evergrande New Energy Vehicle (0708) exhibited nine electric car models in a car show for the first time as its president pledged mass deliveries by next year.

Although the car subsidiary of developer China Evergrande (3333) has a huge presence at the Shanghai Auto Show which opened Monday, media could not get up close and personal with its Hengchi models on display as the cars were contained within glass fences and only security and company personnel were allowed in.

That set social media abuzz with some netizens questioning whether the models are available to drive, as their chassis design is much flatter than traditional cars. But others said Tesla's models have similar designs.

Evergrande NEV president Liu Yongzhuo said at a briefing that mass deliveries of Hengchi cars will start next year and executive vice president Daniel Kirchert said the Hengchi 1 will have a range of 760 km, while the Hengchi 9, a pure electric mid-sized SUV, will have an extra-long range of 810 km.

Though it is yet to sell a single vehicle, shares of Evergrande NEV have more than doubled to HK$68.60 so far this year and its market value is HK$670.15 billion, greater than Ford Motor and General Motors.

Its shares dipped last month after the state-run Xinhua news agency highlighted concerns about how the EV sector is evolving.

Chairman Hui Ka-yan has repeatedly pushed back car-production targets.

Speaking in late March after Evergrande NEV's full-year loss for 2020 widened by a yawning 67 percent, Hui said the company planned to begin trial production at the end of this year, delayed from an original timeline of last September. Expectations for annual production capacity of 500,000 to 1 million EVs by March 2022 were also pushed back until 2025. Still, the company issued a buoyant new forecast: 5 million cars a year by 2035.

"It's a weird company," said Bill Russo, the founder and chief executive officer of advisory firm Automobility in Shanghai. "They've poured a lot of money in that hasn't really returned anything, plus they're entering an industry in which they have very limited understanding. And I'm not sure they've got the technological edge of Nio or Xpeng," he said.