Evergrande, another Chinese in difficulty: the government aims to consolidate electric car manufacturers. Xiaomi like Apple

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Evergrande, Xu Jiayn’s real estate empire, is in danger of collapsing and also burying the Chinese billionaire’s automotive adventure. Just a few months ago, the subsidiary Evergrande New Energy Vehicle Group had reached 87 billion in capitalization on the Hong Kong Stock Exchange. The subsidiary also reached an agreement with the Indian-controlled Italian Pininfarina for the design of a range of zero-emission vehicles. The company had invested in Faraday Future, a not-so-brilliant operation, then falling back on Nevs, born from the ashes of the Swedish Saab. The leader admitted to being under pressure: the debt amounts to 300 billion dollars. In April, on the occasion of the inauguration of a spectacular temporary showroom in Shanghai, Evergrande had anticipated to aim for a production of 5 million electric by 2035.

Pininfarina flies to China after agreement

The first goal, made official in 2019, was to reach one million within three years. The target has slipped (if not gone forever), but it was done by Lei Jun, the founder of Xiaomi, the third largest mobile phone manufacturer in the world that obviously aims to compete with Apple. The hi-tech giant would have planned for 2024 the launch of the first zero-emission car which should be followed by a new model the year in the following 36 months. The Chinese billionaire has already formed a specific company with $ 1.5 billion in capital and 300 employees. Xiaomi had announced that it wanted to invest the equivalent of 10 billion dollars in the development of electric cars over the next two decades.

However, the promise dates back to March, when the Chinese government had not yet decided on the crackdown summarized in recent days by industry minister Xiao Yaqing, who is also responsible for market surveillance. After supporting the birth of dozens of companies engaged in the electric vehicle segment with approximately $ 100 billion in ten years, the executive is now aiming to consolidate them. Experts estimate that of the segment’s 300 automotive companies will end up with around 100 remaining. Some brands – from Qoros to Borgward to Byton to HAAH’s operation to import Chinese vehicles into the US – are already gasping.

The merger through mergers and acquisitions is not good news for other Asian and Western manufacturers, who are faced with competition that has now reached, if not exceeded, certain qualitative and technological parameters.

Meanwhile, in August, the Chinese car market suffered a new decline, the fourth in a row: -17.8%. Since the beginning of the year, growth has been reduced to 13.7% (the ACEA data for the European Union speak of a + 11.2% in 8 months and a -19.1% last month) and the country’s producers’ association, CAAM, has revised down the forecasts for 2021: “only” + 6.5%. Volumes of alternative fuel vehicles are an exception, including plug-in hybrid and fuel cell vehicles: around 321,000 vehicles were marketed in August, almost double compared to the same month in 2020.

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