[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Evergrande Auto, a subsidiary of China's Evergrande Group which has fallen into default, has started mass production of electric vehicles.

According to local media China Daily Economic News on the 14th, Evergrande Auto recently posted a video on social media (SNS) Weibo showing the delivery ceremony of the first mass-produced unit of the Hengtze 5 sport utility vehicle (SUV) at the Tianjin factory.

The Hengtze 5 is the first electric vehicle model that Evergrande has begun mass-producing, with the price expected to be set below 200,000 yuan (approximately 37 million KRW). This is considered competitively priced compared to the 300,000 yuan (approximately 56 million KRW) price of established electric vehicle market leaders such as Chinese EV startups Nio, Xpeng, and Li Auto.

Eric Han, an analyst at Shanghai-based business consultancy Shuolei, said, "If the Hengtze 5 sells well, it will be a ray of hope for Evergrande, which has been striving for months to sustain its business."

However, Evergrande Auto is already a latecomer in the Chinese electric vehicle market, and its successful market entry remains uncertain. Additionally, the negative image caused by the parent company's default situation may also have an impact.

Xu Jiayin, chairman of Evergrande Group, established Evergrande Auto in 2019 with capital of 2 billion dollars (approximately 2.4 trillion KRW) to enter the electric vehicle market.

Since then, Evergrande aggressively expanded its business, even attracting investment from local governments, and set an ambitious goal to produce over 1 million electric vehicles annually at factories in China and overseas by 2025. However, the mass production schedule was delayed compared to the original plan due to the parent company's liquidity crisis.

According to industry sources, Evergrande Group is estimated to have invested 29.4 billion yuan (approximately 5.5 trillion KRW) in the electric vehicle business since the establishment of Evergrande Auto until last year.

This content was produced with the assistance of AI translation services.