(Yicai Global) April 17 -- With Jia Yueting’s Faraday & Future Inc. winning a bid for a land plot in Guangzhou, the new investor behind the troubled electric car maker has finally emerged.
Though Faraday & Future has not disclosed the source of its funding, a company insider told Yicai Global in February that Faraday & Future did get financing, though not from a Hong Kong consortium as widely speculated, but from Chinese real estate giant China Evergrande Group.
However, Evergrande may not be interested in the car maker’s electric vehicles, which cost CNY2 million (USD318,000) per unit.
Ruichi Smart Car Guangzhou Co. won the bid on about 40 hectares of industrial land in Guangzhou's Nansha district for CNY364 million on April 8, Guangzhou Public Resources Trading Center said in a recent statement on its website. Ruichi is an affiliate of Faraday & Future.
“Xu (Jiayin) is not interested in electric cars, but he hopes to grab land by partaking in the production of such vehicles,” the source told Yicai Global. “However, it remains uncertain whether Evergrande or Xu himself has invested in Faraday & Future.” Evergrande Group founder Xu is China’s richest man, as Time Inc.’s Fortune news site reported in October.
Ruichi met the bidding requirements for the land plot, which is earmarked for electric vehicle projects, per an announcement by the Land Resources and Planning Bureau of Nansha Development Zone.
The winner (Ruichi) needs to bring in an all-electric car assembly project with world-class all-electric vehicle development, research and manufacturing capabilities within one month after winning the bid, begin construction within one month and put the plant into operation within 24 months after acquiring the land, per the announcement.
Evergrande has invested heavily in key, strategic industries, like electric cars, that the government supports to find new areas of growth of late.
Evergrande also signed a cooperative agreement with the Chinese Academy of Sciences April 9 to spend CNY100 billion building three science and technology research bases over the next decade, with research encompassing life sciences, aerospace, integrated circuits, quantum technology, new energy, artificial intelligence, robotics and modern agriculture, a sign that the property developer is staging incursions into high-tech sectors.
Evergrande has announced its foray into emerging technology areas including new energy. Its investment in Faraday & Future is in line with its overall strategy, Michael Cole, a senior property analyst, told Yicai Global. However, given Jia’s poor credit record, Evergrande’s investment suggests that it may need to focus more on its core real estate business.