SHANGHAI/HONG KONG – It was difficult to miss the China Evergrande Group’s booth at the Shanghai Auto Show (April) displaying its new energy vehicle (NEV).

The property developer-backed group displayed nine concepts vehicle models in one of the most prominent spots at the event. It was located opposite BMW.

Daniel Kirchert joined Evergrande NEV just days before the show to serve as vice-president. He spoke at the event and told reporters that no other car manufacturer has ever been able “to deliver such diverse product lines in such a brief amount of time.”

Industry executives and analysts say that Evergrande NEV was founded in 2019. Chairman Hui Ka Yan stated it had vowed to achieve its ambitious sales goals by 2025. This is a goal Tesla (NASDAQ) Inc cannot expect to reach this year.

Six months later, the doubts seem stronger than ever. After all, more than $300 Billion in liabilities has been incurred by the parent of the company.

“Those targets would be really aggressive, nearly impossible to achieve even for established, well-managed automotive companies because of the capital and human resources required to even attempt executing on the plan,” said Tu Le, an auto analyst at Sino Auto Insights.

Evergrande raised more than 50 million yuan ($7.78billion) in NEV funds from its parent and investors, including Sequoia Capital China (ride-hailing firm Didi Global Inc), Yunfeng Capital (linked to Alibaba) and Sequoia Capital China.

It announced 14 new models and has plans for 10 factories to be built in China and Sweden. It has constructed or plans to construct six models, one of which is in Shanghai. Reuters recently visited the site and found around 20 Hengchi electric cars parked out front. However, the company has not yet revealed a production model nor sold a single vehicle.

Xpeng and Nio (NYSE) were two of the most popular NEV startups in China by their sales. They raised $7.3 billion each through preIPO fundraising and stock market listing.

Nio already has four models. It is currently building its second plant. Xpeng already has three vehicles and is increasing the number of production locations to four, from two. Tesla currently sells four models, and there are four auto plants.

Evergrande NEV didn’t immediately reply to our request for comment.

“CARS ON PAPER”

Evergrande NEV was able to increase its market capitalisation by more than HK$700billion ($89.99billion) in March thanks to investor optimism and lofty goals. This value is greater than Ford Motor (NYSE.) Co. However, it has fallen to HK$38billion.

It has been able to attract top auto executives such as Walter De Silva, a designer from SK and Junesoo Lee, SK’s battery scientist. Kirchert was previously chief executive of Byton, a Chinese EV startup that struggled in crowded markets. A request for comment was unsuccessfully received by him. 

The rapid expansion drew the ire of Beijing. Xinhua (the Chinese state news agency) highlighted the company in March as an example of problems within the industry.

“The huge market potential has given birth some ‘powerpoint cars companies’ that make cars’ on papers,” Xinhua reported in a report regarding the high valuations for electric carmakers.

Evergrande NEV, in stock exchange filings last week, warned that it was still searching for investors and sales of assets and that without these it could struggle to pay its salaries or cover other expenses.

In an exchange filing it also stated that it was ending plans to issue shares in China’s continental mainland. Reuters saw a memo indicating that contract workers were to cease working in the Shanghai factory starting September.

However, three people familiar with the matter claim that the company does not intend to abandon the project. Instead, it is in negotiations with outside investors to fund the project.

Monday was the day it informed suppliers and authorities of Tianjin on the coast that its car plant is under construction, that its management will ensure mass production.

National Electric Vehicle Sweden AB, the Swedish unit that makes its vehicle, said last week to Reuters that it was in discussions with U.S. venture capital firms as well as industrial partners, about finding new owners. According to Reuters, the unit may be worth as high as $1 billion according to a source who is familiar with the matter.

($1 = 6.4262 renminbi)

($1 = 7.7786 Hong Kong dollars)