Evergrande Electric Car Unit Gets Funding to Compete with Tesla, Nio in China

GUANGZHOU, China – Shares in the electric vehicle unit of Chinese real estate giant Evergrande jumped 67% on Monday after the company raised large funds through a new sale of shares.

China Evergrande New Energy Vehicle Group hit an all-time high of HK $ 50 before slashing some of those gains. The company’s shares closed at 45.35 Hong Kong dollars.

The action exploded after the Chinese electric car company issued 952.38 million shares to six investors at a price of HK $ 27.30 and raised net proceeds of HK $ 26 billion ( $ 3.35 billion).

The funding is another sign that the Chinese electric car market is heating up, and Evergrande could pose a challenge for Tesla as well as its domestic rivals such as Nio and Xpeng Motors.

Last year, Evergrande introduced six new electric vehicles under a brand called Hengchi, hoping to start production this year. The company has yet to sell a single car.

In September, the company raised around HK $ 4 billion through the sale of shares to investors, including Chinese internet giant Tencent and the Didi helpline.

China Evergrande New Energy Vehicle Group is also preparing for listing in the Shanghai Nasdaq-style Science and Technology Innovation Council, or the Star Market.

Chinese electric car companies have aggressively raised capital to increase production and take the lead in the competitive market.

Xpeng Motors raised $ 1.5 billion in an initial public offering in the United States last year and secured a 12.8 billion yuan (1.98 billion yuan) line of credit this month. of dollars).

This month, BYD – the Chinese electric car maker backed by US billionaire Warren Buffett – said it had raised HK $ 29.9 billion through the issuance of new shares.