恒大新能源汽车的危机：行业竞争下的自身短板凸显

恒大新能源汽车集团在曾经号称投入3000亿构建产业链后，如今却面临着严重的财务危机。从新年伊始宣布无资金支持2024年财报专业审计开始，阐述其在港交所的文件显示难以吸引投资者解决流动性危机和重组。并通过与中国电动汽车市场投资变化对比，分析其面临困境不只是行业竞争加剧的原因，还包括自身低估行业复杂性、领导和执行方面的挑战、房地产纠葛带来的信誉问题以及销售不佳导致的经销商消失和工厂停工等多方面因素，最后指出在其债务高企、营收下降、净亏损增加的情况下，随着中国电动汽车行业进入整合阶段，其生存希望愈发渺茫。

Evergrande New Energy Auto Group, which was once among the most ambitious players in China's electric vehicle industry with a reported investment of 300 billion yuan in building an industrial chain, is still mired in severe financial difficulties. At the beginning of the Chinese New Year, the company announced that it didn't have the funds to support a professional audit of its 2024 financial statements, which further emphasized the deepening of its crisis.A recent filing on the Hong Kong Stock Exchange has confirmed that Evergrande Auto has been constantly struggling to find investors who are willing to relieve its liquidity crisis and promote restructuring. In the past six months, the company has taken extreme cost - cutting measures, such as further layoffs and reducing operational expenditures, in an attempt to deal with its financial turmoil.This announcement came more than 300 days after the collapse of a long - awaited strategic investment deal that was expected to bring much - needed capital. Evergrande Auto attributed its failure to attract investors or buyers to the increasingly challenging market conditions in China's EV market, citing a highly competitive environment.However, while industry competition has indeed become fiercer, this does not fully account for Evergrande Auto's plight.Market caution reveals deeper structural problems. China's EV market has moved beyond its initial growth stage. With the primary market cooling down, uncertain commercial prospects, and profitability challenges, automakers are finding it more difficult to attract investment. Compared to the investment boom in previous years, recent market adjustments have made investors more cautious.According to Xu Yanhua, secretary - general of the China Intelligent and Connected Vehicles Industry Innovation Alliance, in 2021, China's smart vehicle sector had 168 investment deals with a total amount of over 100 billion yuan. By 2023, the number of deals had nearly halved to 81, and the total funding had shrunk to approximately 45 billion yuan. This trend reflects a broader risk - reduction in the market and a shift towards companies with stronger fundamentals.Weaker EV brands are facing increasing difficulties in obtaining financing. Zhang Yichao, a partner at AlixPartners' Greater China automotive practice, noted that the EV sector is becoming more competitive. Given the increased risk and lower probability of success, investors are shifting their focus to opportunities with clearer paths to profitability.The key issue is Evergrande Auto's inability to establish itself as a reliable car manufacturer. While the investment climate has become more cautious, it has mainly exposed the company's underlying weaknesses rather than being the root cause of its challenges. 恒大新能源汽车的危机：行业竞争下的自身短板凸显 At a Hengchi dealership in Chongqing on August 9, 2023, a salesperson was promoting sales via live streaming. Photo from CFP.Underestimating the complexity of the industry. According to an industry analyst interviewed by Jiemian News, Evergrande Auto failed to recognize the complexity of the automotive industry. The company's approach focused on land acquisition and real - estate expansion, which overshadowed its core focus on car production.Evergrande entered the EV market just as China's real - estate sector was transitioning away from aggressive expansion. As real - estate firms were looking for alternative growth opportunities, many turned to EVs, a sector seen as having strong potential despite broader economic uncertainties. In 2017, Evergrande chairman Xu Jiayin aimed to use financial resources to enter the industry, admitting that the company lacked technology, talent, and experience. Instead of a gradual entry into the industry, he pursued an aggressive acquisition - driven strategy.Xu summarized Evergrande's approach in 15 characters: "Buy, buy, buy; merge, merge, merge; enclose, enclose, enclose; big, big, big; good, good, good." The company attempted to acquire available technologies and companies, creating a vast EV ecosystem through partnerships.However, this approach underestimated the technical and operational requirements of car manufacturing. Unlike real - estate, where capital investment can yield relatively quick returns, EV production requires long - term investments in research, development, and supply - chain integration. Even acquired technologies must be properly integrated into a cohesive production system, which Evergrande struggled to achieve.Leadership and execution challenges. Evergrande Auto's reliance on acquisitions and partnerships also left it with limited in - house R & D capabilities. This weakened its competitive position, especially in an industry where proprietary technology is a key differentiator.Moreover, the company's leadership was mainly drawn from Evergrande Group's real - estate and financial departments, with very little automotive expertise. Among its ten vice - presidents, only Gao Jingshen, who was in charge of manufacturing, had prior industry experience, having worked at Faraday Future. The lack of industry knowledge among top executives led to delays in production facilities in Shanghai and Guangzhou, and the launch of its first model, the Hengchi 5, faced repeated setbacks. Despite Xu Jiayin's order for rapid production ramp - up, the model continuously missed its deadlines.Evergrande's overly ambitious expansion further strained its resources. The company planned to develop 15 models and build ten production bases, aiming for an annual capacity of 5 million vehicles within a decade. However, without a single successful model launch, such a plan significantly increased execution risks and inefficiencies.Real - estate entanglements and credibility issues. While struggling to develop its EV business, Evergrande acquired a large amount of land in the name of automotive projects. According to LatePost, from September 2019 to September 2020, Evergrande acquired 11.33 million square meters of land, of which only half was for industrial use, with 35% for residential and 13.34% for commercial projects.Evergrande's growing real - estate crisis continued to undermine consumer confidence in its EV business. Customers became skeptical about whether the company could deliver vehicles when it was having trouble fulfilling its real - estate obligations. A former Hengchi dealership manager confirmed that the real - estate turmoil had a severe impact on sales, as buyers were afraid that they might not receive their vehicles.To regain confidence, Evergrande introduced a "notarized purchase" scheme, where payments were held in escrow by the Tianjin Notary Office. However, this did little to ease concerns, as the fundamental issue was still the company's credibility.Sales figures further illustrate these struggles. As of mid - 2023, Evergrande had delivered a total of 1,429 electric vehicles. Sources within Evergrande Auto indicated that most of the Hengchi 5 vehicles were actually sold at a discount to internal employees.Vanishing dealerships and empty factories. A Shanghai Hengchi dealership manager told Jiemian News that the Hengchi 5 had failed to gain market acceptance, and sales staff found it difficult to sell even one unit per month. Despite a high commission structure of 3,000 to 4,000 yuan per car, the difficulty of convincing skeptical customers made it extremely hard to expand the customer base.The difficulties in attracting franchisees further highlight Evergrande Auto's problems. Although company representatives claimed that all dealership slots in 18 cities were filled, Jiemian News found that none of the 21 automotive dealers and 33 car trading companies in seven of these cities had confirmed any cooperation with Evergrande. 恒大新能源汽车的危机：行业竞争下的自身短板凸显 A look of Evergrande’s Tianjin factory. Photo by Yang Shihan.These challenges have led to dealership closures and factory shutdowns. A visit to Evergrande's Tianjin factory showed an overgrown site with little activity. A source close to Hengchi Auto said that the factory, which once had hundreds of employees, now had only about 40 employees, half of whom were security guards. Many offices had been cut off from electricity, and production had effectively ceased.As of mid - 2024, Evergrande Auto's financial statements showed total liabilities of 74.35 billion yuan. The company had a revenue of only 38.38 million yuan in the first half of the year, a 75% decrease year - over - year. Net losses reached 20.26 billion yuan, nearly three times the previous year's figure.As Evergrande Auto continues to search for investors or buyers, its fundamental weaknesses make a successful turnaround increasingly improbable. With China's EV industry entering a phase of consolidation, the company's prospects for survival are diminishing.