Chinese media outlet Shangyou News reported on Monday that real estate developer Evergrande’s first pure electric SUV, the Hengchi 5, has seen 50,000 units ordered within the 10 hours of blind booking during Labor Day holiday. “Blind booking” refers to the practice in which consumers pay a desposit before knowing what the actual price will be.
For Evergrande Group, which is heavily in debt, the automobile arm is very important. The company has already set itself a sales target for the new EV, aiming to sell more than 1 million units in 2025 and 5 million units by 2035.
On March 22 this year, Evergrande unveiled a batch of photos of founder Xu Jiayin presiding over a conference that day. Xu mentioned that the mass production of Hengchi 5 should be in full swing within the next three months.
On April 2, Xu led a group of Evergrande executives to visit Evergrande Auto’s experience center in Guangzhou, where three Hengchi 5 models were showed.
On May 7th, Evergrande officially announced that it had recruited authorized agents in 18 cities including Beijing, Shanghai, Guangzhou and Shenzhen. Judging from the sales model released by Evergrande Auto, the national unified retail price will be adopted for new car sales in the future to ensure sales profits.
Evergrande Auto’s requires agents to have a registered capital of over 5 million yuan, a venue for business needs in addition to an exhibition hall that covers 200-300 m², and the ability to form a qualified management team.
Judging from the above conditions, Evergrande Auto’s idea of recruiting dealers is similar to that of some electric vehicle startups. Their stores are opened in business districts with high traffic. However, the difference is that Evergrande Auto is adopting a system of franchise agents like traditional cars to reduce the financial pressure in building out its EV sales network.
In addition, Evergrande’s hope for its auto arm is not only to vehicle manufacturing. The main business scope of Hengchi New Energy Vehicle Sales Co., Ltd., established in March this year, includes charging, battery swapping, and online car-hailing.