Evergrande takes on Tesla, rolling out its first electric vehicle as the embattled Chinese real-estate developer seeks to make EVs its core business

• Evergrande New Energy Vehicle Group started production in December.
• It rolled out the first Hengchi 5 all-electric compact SUV from its Tianjin assembly line Wednesday.

On Wednesday, the embattled Chinese real-estate giant Evergrande rolled its first electric vehicle off the assembly line as the company pivots toward the automotive market.

The Hengchi 5 all-electric compact SUV was completed 12 days ahead of schedule, marking a milestone for the Evergrande New Energy Vehicle Group, the company said on its Weibo microblog account. It also posted a video from the production line at its Tianjin plant in northern China.

The EV unit of the cash-strapped China Evergrande Group ramped up mass production last month, Reuters reported.

Evergrande's EV ambitions come as the property developer grapples with a $300 billion debt pile and is in default, according to S&P Global and Fitch Ratings. The Chinese government has also stepped in to help with the company's restructuring.

In October, Evergrande CEO Hui Ka Yan said the company wanted to make electric vehicles its core business within 10 years, according to 21st Century Business Herald, citing Hui's comment at an internal meeting.

Evergrande has introduced several EV models, but Hengchi 5 is the only one that has entered mass production so far. The vehicle has a driving range of about 700 kilometres, or 435 miles, on a single charge and is priced at less than 200,000 Chinese yuan, or $31,450, according to the South China Morning Post.

Evergrande has bold ambitions for its EV business. The company said in August 2020 that it wanted to become "the largest and most powerful new energy automobile group in the world" within three to five years. Later that year, it announced plans to deliver 1 million cars a year by 2025 and 5 million by 2035.

Tesla, the world's most valuable automaker, delivered about 936,000 cars in 2021.

China is the world's largest EV market, but Evergrande's Hengchi is entering a competitive arena where international players like Tesla compete with a host of leading homegrown brands such as BYD, Nio, Xpeng and Li Auto.

"If the Hengchi 5 vehicles sell well, it will be a ray of hope for Evergrande after months of efforts to keep its businesses afloat," Eric Han, a senior manager at Suolei business advisory, told the SCMP. "It was an important step taken by Evergrande to wade through its funding crisis."