(Economic Observation) Why is the real estate giant Xu Jiayin keen to build cars across borders?

　　China News Service, Beijing, February 4th, title: Why is the real estate giant Xu Jiayin keen to build cars across borders?

　　China News Agency reporter Pang Wuji

　　Xu Jiayin, chairman of the board of directors of Evergrande, appeared on the 3rd in one of the coldest places in China in winter—-35 degrees Celsius in Yakeshi, Hulunbuir, Inner Mongolia Autonomous Region, to supervise the winter test of Hengchi.

　　This three-week test will comprehensively test the reliability, safety, and stability of Hengchi cars in extreme cold environments.

　　New cars need to go through a series of tests before mass production to simulate the situations that users may encounter in extreme environments. Winter tests are regarded as the key node before mass production of new cars.

This also means that Evergrande has taken another step forward from mass production.

　　In fact, this is not Xu Jiayin's first time to build a car.

As early as the first year of entering new energy vehicles, Xu Jiayin began to travel around the world.

He has traveled across 23 countries and 47 cities, and has inspected 58 leading companies in various fields of the global automotive industry.

Last year, he went to Shanghai, Guangzhou and other places many times to inspect the Evergrande Automobile Production Base, Evergrande Global Battery Research Institute, and Evergrande Automobile Global Research Institute.

　　The intensive schedule brought results.

In August last year, the first six cars of Hengchi were released in Shanghai and Guangzhou at the same time. This is only two years after Xu Jiayin's first "knock" in the field of new energy vehicles.

　　Although his personal wealth has won the title of China's richest man several times, Xu Jiayin can be called "one poor and two white" in terms of car building. He has no talents, no production base, and no experience.

　　How does the "outside man" counterattack?

　　Evergrande’s answer is: "If I have money, I will buy it."

According to Xu Jiayin's words: "Buy all the core technologies that you can buy, and cooperate in all aspects if you can't."

　　Over the past two years, Evergrande has successively acquired NEVS, a Swedish electric vehicle company; announced design strategic cooperation with German FEV, German EDAG, German IAV, Austria AVL, and Canada MAGNA; acquired new energy vehicle 3.0 chassis from German BENTELER Group and German FEV Group Structure; shares in power battery company Canai New Energy, etc.

　　Through a series of large-scale international mergers and acquisitions and cooperation, Evergrande has obtained world-leading core technologies in 3.0 chassis architecture, vehicle R&D and manufacturing, powertrain, and power batteries.

In addition, Evergrande also announced that it will invest 160 billion yuan (RMB, the same below) and 120 billion yuan to build new energy vehicle bases in Nansha District, Guangzhou and Shenyang, respectively.

According to rough statistics, Xu Jiayin has invested about 300 billion yuan in new energy vehicles.

　　Selling a house also makes money, why does Xu Jiayin want to build a car?

　　Since last year, new energy vehicles have become the hottest "track" in the capital market.

With a market value of over US$800 billion, Tesla is firmly in the position of "the world's first car company by market value", especially since its Shanghai plant was put into production early last year, Tesla's stock price has risen from US$92 to US$850, an increase of 9 times many.

　　Evergrande Auto also made a lot of waves in the capital market.

On January 24, Evergrande Automobile announced that it had issued 952 million new shares to six investors, attracting a total of 26 billion Hong Kong dollars, making it one of the largest equity financings in China's new energy automobile industry.

　　I haven't seen Evergrande on the road, and its market value has exceeded HK$400 billion.

Also belonging to the Evergrande Group, the market value of Evergrande Auto is close to twice that of Evergrande Real Estate.

After the news of Hengchi Auto’s winter test came out, Evergrande’s share price rose again by more than 13% on the 4th, breaking through the 50 Hong Kong dollar per share mark.

　　The major technology giants are gearing up

　　Evergrande is not only eyeing new energy vehicles.

Real estate companies such as China Fortune Land Development, Wantong Real Estate, and Baoneng have entered the market one after another, and technology giants such as Baidu, Apple, and Huawei are also gearing up.

　　According to the data of the professional version of Tianyancha, there are currently about 200,000 businesses in China including "new energy vehicles, electric vehicles, plug-in hybrid vehicles, and fuel cell vehicles", and the status is active, existing, moving in, moving out Of new energy vehicle-related companies.

Among them, nearly 30% of related companies have registered capital of more than 10 million yuan.

In 2020, the number of new energy-related companies will be the largest, exceeding 65,000.

　　While the bigwigs from all walks of life outside the "siege" desperately squeezed in, the new car-building forces in the "siege" were not to be outdone.

In January, the delivery volume of new domestic automakers achieved substantial growth.

For example, Ideal, NIO, and Xiaopeng Auto's monthly deliveries all increased by more than 300% year-on-year.

　　The "New Energy Automobile Industry Development Plan (2021-2035)" officially released in November last year stated that China's new energy vehicle sales will reach about 20% of the total sales of new vehicles in 2025.

In 2019, the market penetration rate of China's new energy vehicles was 4.7%.

Industry insiders pointed out that this means that in the next 5 years, the annual compound growth rate of the industry will reach more than 30%.

Compared with the new home development business where the growth space is peaking, the development prospects of new energy vehicles are undoubtedly broader.

　　Evergrande Auto has gained a lot of favors from investors, rising market value, frequent mergers and acquisitions, and huge room for imagination, but none of them can conceal its biggest challenge-mass production.

Xu Jiayin once said that Evergrande Motors is taking a road that has not been taken by car companies in the world.

Can Evergrande break through the bottleneck and "change lanes and overtake"?

I believe the future market will give the answer.

(Finish)