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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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The $87 Billion Chinese Car Maker That Hasn’t Sold A Single Car

EV plant

When Nikola, the EV and hydrogen truck maker, blew up last year, nobody outside China had heard about Evergrande Auto—the brainchild of China’s biggest real estate developer, Xu Jiayun. Evergrande is listed on the Hong Kong exchange, and to date, has a market cap of $87 billion

And it hasn’t even sold a single car yet. A flurry of electric carmakers have gone public in the United States over the past year through the new favorite of many investors—special-purpose acquisition vehicles—in strong proof that thousands want to get a piece of the EV pie in hopes, fueled by dozens of forecasters, that the pie is going to become enormous.

Evergrande Auto’s story is proof that this trend is not just a U.S. phenomenon. And no wonder: the upbeat reports about EV sales that fuel investor interest are global, and China features heavily in them.

The biggest EV car market in the world is far ahead of the United States and even Europe in terms of EVs as a percentage of all cars on the roads. And Beijing wants to boost this number further, turning the country into a true EV leader. Perhaps it was this strong government support that helped Xu Jiayun make its foray into electric vehicles in hopes of making Evergrande Auto the “largest and most powerful” EV maker in the world by 2025—and more successful than Tesla, because it’s always about beating Tesla in the EV space.

The car showcased as many as nine models at the China 2021 Auto Show last month. Yet, they were all mock-ups, not real vehicles. Since first announcing its plans to take on Tesla, Evergrande Auto has pushed back production deadlines several times, and it reported a 67-percent increase in its annual loss for 2020, Bloomberg reported in April. Taking on Tesla, it appears, is not as easy as it seems. Neither is manufacturing electric cars.

Yet despite the absence of any working EV models, and despite the loss, Evergrande Auto’s market cap gained about a thousand percent in 2020 to hit $87 billion in April. Now, the company is saying it will begin trial production of EVs at the end of this year and start deliveries in 2022. However, initial plans to have a production capacity of half a million cars next year were delayed to 2025. Still, the shares are trending higher.

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Under normal circumstances, this would be a paradox: when a company makes public huge delays to its production and sales plans, this tends to hurt share prices. Yet what is happening with Evergrande Auto is proof that circumstances are anything but normal. 

Forecasts boldly state that in two decades, more than half of all car sales in the world will be electric vehicles. Yet to date, despite generous government subsidies, these represent less than 10 percent of all sales except in parts of Europe such as Norway. Even in China, the share of EVs in total car sales is expected to be 6.3 percent at the end of 2020. Canalys forecasts suggest that this will increase to 9 percent this year.

This will certainly be impressive growth—if it materializes. Beijing is phasing out its generous subsidies instead of obliging carmakers to include more EVs in their model lineups, so things could go either way. The same is true for Evergrande Auto.

When Nikola went public last June, it took the market by storm, seeing its shares soaring in the first days of trading. But information soon began to surface, such as that it did not, in fact, have a working model of its flagship semi-truck, and its chief executive had misled investors on several issues.

When Evergrande Auto went public, its shares soared because it was promising millions of EVs on the road in a few years. Then things began to surface, such as that the company made its employees sell apartments to hit their key performance indicators and that the carmaker planned more models than even a global industry leader would find challenging, according to Bloomberg’s report.


The parallels are hard to miss, and they speak to one and the same: that while the future of electric vehicles may be bright and shiny, their present is that of a minor part of total car sales. There are undoubtedly many legitimate EV makers that do sell cars, and Tesla is only one of them. Most of the rest come from China, but whether Evergrande Auto will become one of these successful Chinese EV makers remains an open question that will continue fuel worry about an EV bubble.

By Irina Slav for Oilprice.com

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Leave a comment
  • brad meyer on May 27 2021 said:
    Tesla was much the same - especially on the not making money side. to this day, Tesla doesn't profit with cars but other financial shenanigans.
  • Terry Bradbury on May 31 2021 said:
    Battery vehicle production is just another automotive production process and a successful marketing stratagem. Solar power generation leaves us in the dark without battery storage. Wind power is in the hands of the Gods. Hydrogen depends on the use of our already strained water supplies. I hope I am wrong but I feel both Battery and Hydrogen vehicles will go the same way as biofuels.

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