Tesla Inc (NASDAQ: TSLA) and challengers Nio Inc (NYSE: NIO) and Xpeng Inc (NYSE: XPEV) will have to face the emergence of a potential new rival in China’s growing electric vehicle market.
What happened: Listed in Hong Kong China Evergrande New Energy Vehicle Group Ltd increased 913.7% over the course of a year. Since the beginning of the year, the company’s shares have risen 83.3%.
By comparison, Tesla’s shares have risen 871.4% in one year and have fallen 0.5% in 2021 so far.
The last hype in Evergrande’s stock price came after the company said it would collaborate with Tencent Holdings Limited (OTC: TCEHY) in a joint venture to develop an intelligent operating system for automobiles with intellectual property rights, Reuters reported.
So far, Evergrande’s shares were trading 0.27% lower in Hong Kong.
Why does it matter: Evergrande has not yet sold any vehicles, but has introduced six new EVs under the Hengchi brand, CNBC reported earlier this year.
Despite the lack of sales, Evergande managed to emerge as the largest listed auto company in China after Warren Buffett supported BYD Company Limited (OTC: BYDDF) and Nio.
While BYD’s market capitalization is HKD 582.4 billion ($ 75 billion), Nio’s is HKD 532 billion ($ 68.5 billion). Evergrande has a market capitalization of HKD 649.7 billion (US $ 83.67 billion).
In January, Evergrande raised HKD 26 billion ($ 3.35 billion) after selling 952.38 million shares to HKD 27.30 each to six investors, noted CNBC.
In September, the company also reportedly raised HKD 4 billion ($ 0.52 billion) through a sale of shares to investors that included companies like Tencent and Didi.
Evergrande is not alone in capitalizing on the excitement generated by EVs. This week Nikola Corporation (NASDAQ: NKLA) said it was raising $ 100 million through a sale of shares to investors, according to a filing with the United States Securities and Exchange Commission.
In January, Nio had raised $ 1.3 billion through convertible notes. Tesla, however. priced its stock offering from $ 2 billion to $ 767 per share in February.
Share price: Tesla shares closed nearly 3.7% higher at $ 701.81 on Wednesday and fell 0.29% in the after-hours session. On the same day, Nio’s shares closed 2.47% higher, at US $ 44.76, and appreciated 0.69% in the trading session.
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