The huge showroom of China Evergrande New Energy Vehicle is located in the heart of Shanghai National Exhibition and Convention Center. With nine models on display, it’s hard to go unnoticed. The electric car newcomer has one of the biggest display stands at the China Auto Show 2021 (Shanghai Auto Show 2021), which started on Monday, in front of the famous German company BMW. However, its daring presence masks an uncomfortable truth: Evergrande hasn’t sold a single car of its own.

The largest real estate developer in China has a range of investments outside of the sector, from football clubs to retirement homes. But it is the recent entry of electric cars that has caught the attention of investors. Evergrande NEV shares traded in Hong Kong have risen more than 1,000% in the past 12 months, allowing the company to raise billions of dollars in new capital. The company now has a market cap of $ 87 billion, more than Ford Motor and General Motors.

So much of the exuberance about the manufacturer that has repeatedly delayed predictions about when it will mass-produce a car is a symbol of the growing appreciation of electric car companies in the past year, as investors bet on a rally that made Elon Musk briefly the world’s richest and growing Concerns about the bubble. Perhaps this is not more evident in China, with the world’s largest market for electric cars, where a remarkable 400 manufacturers of electric cars are now competing for consumer attention, led by higher-value startups than well-known manufacturers but not yet profitable. .

Evergrande NEV entered the field relatively late.

In March 2019, Hui Ka Yan, president of Evergrande and one of the richest men in China, pledged to confront Musk and become the world’s largest electric vehicle manufacturer in three to five years. Tesla’s Model Y crossover had just made its world debut. In the following two years, Tesla gained an enviable position in China, setting up its first factory outside of the United States and delivering around 35,500 cars in March. Chinese rival Nio earlier this month reached a milestone with the production of 100,000 electric cars, prompting Musk to congratulate the company via a tweet.

Despite his ambitions and the high market value of Evergrande NEV, Hui has repeatedly slipped into auto production targets. a Circle of rich friends A billionaire, among others, has accumulated millions, but making cars – whether electric or not – is difficult and requires a lot of capital. Nio’s gross margins only entered positive territory in the mid-2020s, after years of heavy losses and assistance from the municipal government.