Three years, ¥45 billion.
5 million vehicles in annual sales in 10 years.
10 production bases globally in China, Sweden and countries in the “One Belt One Road” corridor, each with annual output capacity of 500,000 vehicles.
60 Chinese and global suppliers, 60 strategic cooperation agreements.
15 globally renowned designers working with 5 global automotive engineering companies to develop 15 new models covering cars, SUVs, MPVs and more in segments from entry level to super luxury.
Hengchi 1 unveiling in the first half of 2020 with SOP slated in 2021.
And a draw-dropping signing table some 60-meter long, good for a new Guinness World Record.
These were the highlights from the Evergrande New Energy Auto Global Strategic Partners Summit held on November 12 in Guangzhou, where Chairman Hui Ka Yan laid out his plans to expand his company from a real estate conglomerate into a new automotive empire with a strategic goal of creating the world’s biggest and strongest new energy automotive group in 3 to 5 years with annual vehicle sales hitting 5 million units in 10 years.
Representatives from 206 automotive companies came to hear Hui talk about his company’s grand auto ambitions and the Chinese Billionaire’s unique path to get there: a path that Hui described as “overtaking the incumbents via a different route.” That path has five ingredients: acquiring technologies through acquisitions, working together with partners, forming cross-industry ecosystems, having sheer scale and just building good quality vehicles at competitive prices.
Hui Ka Yan is going big. Really big.
One thing that Hui has that all the other Chinese smart EV startups are drooling for is money, and he has loads of them. Evergrande as a group had revenues of ¥227 billion and net profit of more than ¥27 billion in the first half of 2019. Full year numbers are expected to be twice as much. Hui knows nothing about cars, so he has assembled a dream team of suppliers, engineering companies and designers. The Electric Drive System 3.0 IPR that he purchased from Benteler and FEV, basically a complete chassis assembly, is expected to underpin many of the 15 models Evergrande will develop. Earlier this year, Hui plowed down some ¥280 billion to build three production sites each in Guangzhou and Shenyang.
As Pininfarina CEO Silvio Angori told me in an interview, all the ingredients are there for success, but the goals that Hui has set for his company are rather lofty, if attainable at all. His grand auto ambitions come against the backdrop of the worst slump the industry has ever witnessed, a slew of companies on death watch and the recent decision by Dyson to kill its EV project. Evergrande is also building massive production capacity when there is already capacity glut. It will also take a lot of chemistry for Hui’s “dream team” to deliver on the promise of “building good quality vehicles at competitive prices.”
The pieces are now in place. Now comes the hard part of executing Hui’s ambitious plans.
As the saying goes, success leads to money, but money rarely leads to success. Time will tell if Hui can deliver on his promises.