Why did Evergrande, who was "complained" by the outside world, receive "love hugs" from Cao Dewang?

"New energy was invented by Edison, and now it is called electric vehicles. That is the direction. It is done by rich people like Xu Jiayin. Capital bosses can do this. It depends entirely on state subsidies. Waiting to die, we must do it without relying on state subsidies.”

At a recent automobile forum, Cao Dewang, founder and chairman of Fuyao Glass, said that car manufacturing is the work of wealthy people like Xu Jiayin. Things like this cannot be accomplished with state subsidies.

Since Evergrande announced the construction of a car, Cao Dewang is probably the first big boss to "support" Xu Jiayin in public. Xu Jiayin, who was "left out" in the outside world, received support from the Glass King, which puzzled the outside world. But if you think deeply, many things cannot be understood one-sidedly based on simple textual expressions.

Is Evergrande’s car-making a “big deception”?

There are currently three forces on China's new energy vehicle track. One is the players in the transformation of traditional enterprises such as Great Wall, Geely, Volkswagen, and Toyota; the other is the players in the Internet field such as Weilai, Ideal, and Xpeng; and the other is Evergrande, Baoneng, and Gree. A player who is a complete layman.

Needless to say, the transformation of traditional enterprises, their own good foundation and capital reserves can well support their transformation. The latter two are more questionable, among which the real estate industry is even more despised by the outside world.

There are three main reasons why the outside world is not optimistic about Evergrande:

First of all, it is a complete layman entering the real estate field and has no basis in car manufacturing. Even compared with founders such as NIO Li Bin, Li Xiang, and WM Chen Hui who have been in the automobile industry for more than ten years, Evergrande Xu Jiayin can really be said to have entered the automobile industry with zero foundation.

Secondly, the transformation of traditional car companies in the same field as Evergrande got off to a bad start. In the past, Baoneng acquired Qoros, but suffered from various "poor management"; later, Gree entered the market with a high profile. But "the thunder is loud but the rain is small", and nothing substantial has been produced so far. It inevitably wears away the patience of the outside world. The outside world does not have high expectations for Evergrande.

Finally, it has to do with the overly low-key character of Evergrande founder Xu Jiayin. Unlike Li Xiang, Li Bin and other flag-waving people, Xu Jiayin and Evergrande have almost zero publicity in building cars. Even until Evergrande released 6 models a few days ago, people outside the industry did not know that Evergrande had entered the automotive field. Evergrande just keeps busy, but the outside world doesn't know what it is doing.

This has also caused many misunderstandings about Evergrande's car manufacturing. It wasn't until Cao Dewang publicly "supported" that the issue of Evergrande's success or failure in building cars was raised again.

Where is Cao Dewang’s “point” of “supporting” Xu Jiayin?

What the outside world questions is why a big boss like Cao Dewang supports Xu Jiayin, who is disliked by everyone? You know, the real estate industry that Cao Dewang criticizes the most in public is Xu Jiayin's real estate industry. Why did he suddenly switch sides this time?

If you read Cao Dewang’s original words several times, you may be able to hear the hidden meaning. Cao Dewang may have landed among rich people instead of Xu Jiayin, and Xu Jiayin happened to be a rich person and happened to be building cars. I just used it as an example.

Combined with what Cao Dewang added later, nothing can be done with subsidies. We may be able to understand Cao Dewang's words more comprehensively. When it comes to building cars, Xu Jiayin is just richer and more qualified than other new car-making forces, but whether he can succeed is a matter on another level.

As Cao Dewang said, building a car is a very expensive thing. In this regard, Xu Jiayin has indeed shown his strong family background.

On June 11, 2020, Evergrande signed an agreement with the Guangzhou government, planning to invest 160 billion yuan to build three major R&D and production bases for new energy vehicles, power batteries and motors in Nansha District, Guangzhou.

On June 15, Evergrande signed an agreement with the Shenyang Municipal Government, announcing that it would invest 120 billion to build three major production bases for vehicle manufacturing, wheel hub motors, and power batteries. The two projects together require an investment of 280 billion yuan.

Earlier, Xu Jiayin, Chairman of the Board of Directors of Evergrande Group, and his delegation visited Zhengzhou to visit key provincial and municipal leaders, and signed cooperation agreements with the Zhengzhou Municipal Government on projects such as new energy vehicles and power batteries. Evergrande will obtain 2,000 acres of supporting land.

In addition, Evergrande NEVS’s production base in Songjiang, Shanghai is also under preparation. Public information shows that Evergrande National Energy’s Shanghai factory plans to roll off the first vehicle on September 28 this year.

Excluding the Zhengzhou project and Shanghai base, looking only at the Guangzhou and Shenyang projects, Evergrande has invested 280 billion yuan.

In March this year, media statistics calculated that the financing scale of China’s new car-making forces had exceeded 170 billion yuan. Among them, the total value of 10 companies including NIO, WM Motor, Xpeng, Byton, FF, Singularity, Chehejia, AIWAYS, Dianka and Qiantu has exceeded 100 billion. However, excluding the Zhengzhou project, the investment amount of the two projects finalized by Evergrande in just 5 days has far exceeded the historical cumulative financing amount of all other new car-making forces.

In terms of "confidence" in building cars, Evergrande is indeed much more arrogant than all new domestic car-making forces.

The key to Evergrande’s success or failure lies in management

However, building a car does not only require money. It is recognized in the industry that the first half of new energy vehicles is electrification, and the second half is intelligence. Well, maintaining good direction and rhythm in the process is key.

Li Xiang, the founder of Li Auto, once said, “Ideal works hard to build and sell cars just to get a ticket for autonomous driving in 2035.”

Nio Automotive Li Bin even bluntly said that there is no mistake in building a car, otherwise it will be very passive.

How to lead the company in the general direction is the key to Evergrande’s car-making. If the founder knows nothing, leaving it entirely to professional managers may not be a foolproof solution.

So far, although Evergrande has released 6 new cars, it has not mentioned a word about its corporate strategic thinking and planning. How to plan autonomous driving, how to layout the Internet of Vehicles, and a series of issues such as after-sales and charging have not been disclosed to the outside world.

The only official information that the outside world knows is that "Evergrande plans to build a production capacity of 500,000 to 1 million vehicles within three years and strive to become the world's largest and most powerful company in 3 to 5 years." One of the new energy vehicle groups. "

Of course, it is not ruled out that Evergrande is holding back a big move, and it is not convenient to disclose too much to the outside world for the time being. But it must be emphasized that when it comes to building cars, how to make itself more professional and logical is a question that Evergrande must think about.

In general, Cao Dewang’s speech has confirmed Evergrande’s financial strength in car manufacturing. Moreover, Evergrande is building a base and releasing new cars. All aspects of the process are also progressing normally, and everything is going smoothly. Be good. As for what happens next, it depends on Evergrande’s next move.

This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.