- China Evergrande Group is one of the country’s largest real estate companies. Like several of its peers, Evergrande has sought to expand to all kinds of industries, ranging from soccer clubs and schools to pig farming and solar energy.
- In 2015, Evergrande Health Group was formed via a backdoor listing on the Hong Kong exchange to consolidate Evergrande’s investments in healthcare services, and per its chairman’s mission statement, expand them with “cloud computing and big data…featuring Internet + Health” and other gobbledygook.
Evergrande Health invested in electric cars in 2018 with an agreement to inject $2 billion into Faraday Future, a much-hyped electric car startup. But Evergrande Health could not get on with the charismatic and now bankrupt founder of Faraday Future, and by early 2019, the deal had fallen apart in acrimony.
- Undeterred, Evergrande Health “spent more than 20 billion yuan to develop an entire new energy vehicle industry chain, complete with vehicles, batteries, motors and power systems” in 2019 and 2020, per Caixin. A new brand was formed: Héngchí 恒驰.
- In July this year, the company changed its name to Evergrande New Energy Vehicle Group, as it sees its main line of business shifting to the electric vehicle sector.
- In August this year, the company promised to deliver six new models, starting next year. The six models are all fully electric, and include a sedan, an SUV, and a seven-seater van.
What to make of the investment?
Tencent, Sequoia Capital, Yunfeng Fund, and Didi Chuxing are run by some of the smartest investment minds on the planet: Surely they know what they are doing. But those companies and funds also like to have their fingers in every single pie that’s on the table in China.
Given the checkered history of Evergrande’s electric car ventures, it’s hard to be confident in the company’s future. The market was not particularly impressed: After today’s news, Evergrande New Energy Vehicle Group’s share price declined slightly.