The Chinese property developer that reckons it can take on Tesla

SHANGHAI: A Chinese developer known for its investments in everything from soccer clubs to spring-water companies is taking on Elon Musk in the electric vehicle arena, declaring it can be the biggest manufacturer in the world within three to five years.

China Evergrande Group, the nation’s second largest property developer, has been moving further away from its real estate roots for years, but this may be its boldest departure yet.

The firm said in a statement on its website Tuesday that it plans to start selling EVs “soon.”

“Evergrande has positioned across the electric-vehicle industry chain and is now armed with advanced technology,” chairman Hui Ka Yan was cited by the company as telling a supply-chain conference held by the group in Tianjin on Saturday. “Evergrande will strive to become the world’s biggest, and the strongest, electric vehicle group within three to five years.”

Musk, the chief executive officer of Tesla Inc, has been churning out electric vehicles for years and has only recently been able to make a profit.

Besides Tesla, Evergrande will come up against all the world’s major car makers, which are plowing tens of billions of dollars into EV production and research.

Tesla’s latest Model Y crossover, unveiled earlier this month, has rekindled concerns about the company’s cash position and analysts are skeptical of executives’ claims they can service debt obligations.

Nissan Motor Co, meanwhile, unveiled a new version of its Leaf plug-in electric car in January, while Daimler AG in December announced plans to buy US$23bil worth of battery cells by 2030 to bring electric and hybrid vehicles to market.

Evergrande will feel the pressure too from local players, like BYD Co, which is backed by Warren Buffett and which has been a big beneficiary of electric-car subsidies from Beijing. (Those handouts are expected to be heavily cut in 2019, however.)

Still, it’s not the first time the property developer has dabbled in automotive technology.

This year alone units associated with Evergrande’s health division have spent more than US$1.1bil buying stakes in an array of EV-related companies, including an interest in a maker of in-wheel motors, a stake in a battery maker, and part of a Swedish firm focused on intelligent cars.