[special topic on SMM] Chronicle of Evergrande car Building: the Transformation of banknote capacity and Standard Tesla

On July 27, Evergrande Health announced that it officially changed its name to "Evergrande Automobile", which indicates that Evergrande Health's main business has become a new energy vehicle. Evergrande's dream of building a car has a long history. Since it was announced to enter the new energy vehicle track since 2017, Evergrande has made a lot of money, in the continuous promotion of all kinds of explosive buyings. at present, the company has built the whole industry chain of new energy vehicles covering power batteries, powertrain, advanced vehicle manufacturing, car sales and smart charging.

According to the strategic goal set by Xu Jiayin, chairman of Evergrande Group, Evergrande strives to become the largest and strongest new energy automobile group in the world within 3-5 years. Evergrande's healthy name change may also be understood as a sign of a raise of hands similar to that of gymnasts before the competition. however, in the face of the new energy car market environment in which there are tigers inside and hungry wolves outside, how can Evergrande, as a laggard, find a way out of sha?

The branch of new energy vehicles with high hopes and no shortage of money

Evergrande Health's business is currently divided into two parts, one is the Health Management Division, which aims to create an omni-directional all-age health membership mechanism around the health needs of the people. build a multi-level graded medical care, highly accurate health management, full-age health care, diversified pension system, and comprehensively improve the national healthy living standards.

The second is the division of new energy vehicles, which is different from some car companies that focus on the industrial chain. Evergrande Health intends to build a whole industry chain of new energy vehicles covering vehicle manufacturing, motor electric control, power batteries, car sales, smart charging, shared travel and other fields. At the same time, Evergrande New Energy vehicle Global Research Institute has been set up to implement the global integrated R & D model.

As a department with high expectations of the group, the new energy vehicle division is still in the investment stage. according to the 2019 annual report, Evergrande recorded a net loss of 4.95 billion yuan, mainly because the new energy vehicle business is still in the expansion investment stage. the purchase of fixed assets and equipment, research and development and other related expenses and interest expenses increased. Evergrande Health Management said at the performance conference that the automotive industry has a long chain and a long return cycle, and it is normal for the automotive industry to have temporary operating losses at the initial stage of expansion, and the company is full of confidence in the future development of the new energy vehicle business.

Pan Darong, chief financial officer of Evergrande Health, said, "this state (refers to losses) is phased and temporary, and after the full mass production of Hengchi's full range of products is achieved in 2021, our report data will be significantly improved." He specially emphasized the Evergrande Group behind Evergrande Health, saying that Evergrande Group, as a company with "total assets of 2.1 trillion yuan, annual sales of more than 600 billion and ranked 138th in the world's top 500s, has sufficient financial strength to invest in the new energy vehicle business."

In addition, the company's goal for the new energy vehicle industry is to build it into the largest and strongest new energy vehicle group in the world in 3-5 years. In the future, 10 major production bases will be built, with an investment of 45 billion yuan in 3 years, an investment of 20 billion in 2019, an investment of 15 billion in 2020 and an investment of 10 billion in 2021.

Explosive buying mode rapidly expands the layout of industrial chain

In June 2018, Evergrande Health announced that it had acquired 45% stake in Faraday Future Faraday Future for US $800 million, becoming its largest shareholder. It has been rumored that Evergrande's plan to invest in FF to enter the new energy vehicle industry was finally confirmed, but the follow-up development was unexpected to all parties. From the honeymoon period to going to court, the two sides finally reconciled at the end of the year, and the past gambling and arbitration were finally written off. A new restructuring agreement was reached.

Although the final outcome is not as originally thought, but Evergrande's next series of big money did not hesitate or suspend. In September of the same year, Evergrande bought a stake in Guanghui Group, a passenger car distribution and service company, for 14.49 billion yuan, acquiring a stake of nearly 41 per cent, making it the company's second largest shareholder, with the aim of maximizing the company's auto sales channels.

In January 2019, Evergrande Health bought another 51 per cent stake in NEVS, a global Swedish electric vehicle company, for $930 million. NEVS is the main acquirer of Saab Automobile Company in Sweden, with perfect electric vehicle manufacturing and R & D facilities, which is equivalent to the inheritor of Saab. Saab has rich experience in the research and development of electric vehicles and began to develop electric vehicles as early as the 1960s.

Also in January, Evergrande bought a stake in Kanai New Energy, a power battery company, for 1.06 billion yuan, and Evergrande will become the largest shareholder with a 58 per cent stake in Kanai New Energy. In addition to vehicles, in March, Evergrande acquired a 70 per cent stake in e-Traction, the Netherlands' most advanced hub motor technology. In July, it set up a joint venture with State Grid to focus on new energy vehicle business such as community smart charging.

"either don't do it or do it best. from the beginning of the layout of new energy vehicles, Evergrande's goal is very clear. In three to five years, Evergrande will build Evergrande New Energy vehicles into the largest and strongest new energy vehicle group in the world." Perhaps as Xu Jiayin said, Evergrande's series of large-scale investments rapidly expanding the capacity of the entire car industry chain has also provided the strength for its goal of being ahead of the pack in the new energy vehicle market with numerous competitors.

The difficult road of transformation

In recent years, under the influence of factors such as the slowdown in economic growth, the decline in market demand and the tightening of housing policies, the real estate industry is under great pressure. with the advent of winter, many real estate enterprises began to find a way out and seek transformation. Vanke, which shouted "live", set up a food business department, which mainly laid out the three major areas of pig farming, vegetable cultivation, and enterprise catering, while country Garden intended to develop into the field of construction robots and robotic restaurants. Many other real estate companies prefer the health care industry.

The new energy vehicle market has continued to flourish in recent years, such as Evergrande, country Garden, Baoneng, Agile, Wanda, Huaxia Happiness, Guancheng Chase, and Li Ka-shing's Yangtze River system. At the same time, with the financing ability and financial strength, they are not stingy in providing financial support for car construction.

Among them, Evergrande has taken the biggest step in building cars. Xu Jiayin expressed his car-building philosophy in his 2019 speech: "Buy!" Close! Circle! Big! All right! " "Buy" means to buy all the core technologies and enterprises that can be bought, "cooperation" means cooperation with technologies that cannot be bought, and "circle" is the "circle" of "moments". To establish a world-class "circle of friends" with leading companies in all fields of the global automobile industry. "Big" is a big pattern and strategy, and there is also a large scale. "good" refers to the cars built in the future, first of all, of good quality, then of good shape, and of good price.

However, after gradually stripping off the core main business of real estate development, the real estate enterprises in the track-changing race are directly facing the challenge from the aborigines of the new industry. As Xu Jiayin, chairman of Evergrande, said when talking about the new energy vehicles the company is involved in, "if we want to build a car without technology, if we want a team without a team, we will have nothing at all." Yu Liang, chairman of Vanke, also shouted that "the road to diversification is not enough for a decade." On the one hand, the golden moment of the real estate industry is gradually fading, on the other hand, the new track competitors are becoming more and more crowded, which also makes the road of diversification of real estate enterprises more difficult.

In the new energy vehicle market, there is never a shortage of entrants, and the whole market is like a "besieged city". People inside the bureau know that they are cold and warm, and outsiders are rubbing their hands, coupled with the covetous foreign contestants and Tesla, who is rushing all the way. Industry reshuffle is gradually strengthened. Superimposed by the special causes of the epidemic and the decline in subsidies this year, the production and sales of new energy vehicles in China declined significantly in the first half of the year, and many track runners have been in a state of loss.

Conclusion: the Battle of carrying Water

On July 27th, Evergrande Health announced its renaming announcement as well as its development plan for the next stage. at present, Evergrande is developing 14 new models at the same time. The initial production capacity of each base is 100000 vehicles / year, the planned total production capacity of 2-3 years is 1 million vehicles / year, and the planned total production capacity of 10-15 years is 5 million vehicles / year. This means that it will far exceed Tesla in the number of models and production capacity. At the same time, its first model, "Hengchi 1", is scheduled to be unveiled in the second half of this year, and the full range of Hengchi products will be mass-produced one after another from 2021.

In the second half of the year, the state's support policy for new energy vehicles is still relatively large, and the slowing down of the subsidy policy is expected to prompt car companies to launch new energy vehicles more smoothly and rhythmically, and the improvement of the trend of new energy vehicles is expected to be effective. However, this may not give domestic car companies much confidence. In the common new energy vehicle market in the future, whether old car companies or new car-making forces, it will be a war of carrying water.

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