Evergrande launches first vehicle amid plans to take on Elon Musk’s Tesla after months of chaos

The property giant has been on the brink of collapse for months. But now, it’s planning a shock comeback – and wants to beat Elon Musk at his own game.

Embattled Chinese real estate titan Evergrande is hoping to put months of chaos behind it with the launch of a surprising new product.

In 2021, the property heavyweight earned the unwelcome title of the world’s most indebted real estate firm after racking up staggering debts of around $A408 billion.

For months on end it teetered on the brink of collapse, with some experts claiming the firm was facing its “Lehman moment” and fearing it could trigger a worldwide financial crisis, given the sheer scale of the company.

Since Evergrande’s woes began, a string of other high-profile companies have also hit the skids, including Fantasia, Modern Land, Kaisa Group Holdings and more, with insiders growing increasingly concerned Evergrande had sparked a “contagion”.

In 2021, Evergrande became the world’s most indebted real estate firm. Picture: Qilai Shen/Bloomberg via Getty Images

But so far, it has managed to defy to odds and avoid a collapse – and now, it has launched its first vehicle after boasting it would take over billionaire Elon Musk’s Tesla company as the biggest electric car manufacturer on the planet.

China Evergrande New Energy Vehicle Group Ltd – which is owned by parent company China Evergrande Group – is now taking preorders for the Hengchi 5 electric sport utility vehicle, following an online presale presentation earlier this week.

It’s the company’s first vehicle after its car manufacturing arm launched in 2018, vowing to take over Elon Musk’s Tesla within five years.

The Hengchi 5, which is designed to run 602 kilometres on a single charge, comes with a 179,000 yuan ($A39,346) price tag – significantly cheaper than Tesla’s Model Y, which is priced from $A72,300 before on-road costs.

“We aim to manufacture world-class smart luxury SUV electric cars priced below 300,000 yuan,” Evergrande Auto president Liu Yongzhuo said during the presentation, adding that the firm had “invested huge efforts in the past three years” to “build a quality Chinese EV by integrating global wisdom”.

Evergrande NEV wants to take over Tesla. Picture: AFP

“Hengchi 5 will become the best SUV electric car in this category.”

The vehicles will be available from October, with a goal of selling 10,000 by 2023.

But Chen Jinzhu, chief executive of vehicle consultancy Shanghai Mingliang Auto Service, told the South China Morning Post it was a risky move by the company.

“The price is attractive. Evergrande is aiming for a big sales volume [of the Hengchi] to improve the group’s financial conditions,” he told the publication.

“If it cannot make its first production car a hit, Evergrande Auto is unlikely to survive the fierce competition.”

Other experts have also speculated that the vehicle gamble could go pear-shaped for Evergrande, given it is late to the electric vehicle party and is launching at a time of soaring costs and severe supply chain disruptions.

Evergrande in crisis

The surprising announcement comes after months of turmoil for Evergrande, which has struggled to repay its massive debt since mid-2021 and missed a series of payments to creditors.

Late last year, it emerged that Evergrande’s billionaire founder Hui Ka Yan had lost a massive $17.2 billion of his own wealth after he dipped into his fortune to help pay back debts and keep the business afloat.

Evergrande chairman Hui Ka Yan lost billions of his own wealth last year. Picture: Paul Yeung/Bloomberg via Getty Images

Chinese creditors have also sued Evergrande for more than $US13 billion in allegedly overdue payments, with insiders claiming it was a major sign that local creditors had lost confidence in the firm’s ability to handle the ongoing crisis.

In January this year, Evergrande also sent shockwaves through global markets after abruptly announcing its shares would be suspended from trading.

The company is tipped to announce its debt-restructuring plan by the end of July.