A New Rival To Tesla And Nio? This Lesser-Known Chinese EV Stock Has Surged 924% In A Year

Tesla Inc TSLA and challengers Nio Inc NIO and Xpeng Inc XPEV have to contend with the emergence of a new potential rival in China’s booming electric vehicle market.

What Happened: Hong Kong-listed China Evergrande New Energy Vehicle Group Ltd has run up 913.7% over the course of a year. Since the beginning of the year, the company’s shares have risen 83.3%.

In comparison, Tesla shares have risen 871.4% in a year and fallen 0.5% in 2021 so far.

The latest splurge in Evergrande’s share price happened after the company said it would collaborate with Tencent Holdings Limited TCEHY on a joint venture to develop an in-car intelligent operating system with proprietary intellectual property rights, Reuters reported.

At press-time, Evergrande’s shares traded 0.27% lower in Hong Kong.

Why It Matters: Evergrande has yet to sell any vehicles but has showcased six new EVs under the Hengchi brand, CNBC reported earlier this year.

Despite the lack of sales, Evergande has managed to emerge as the largest-listed car company in China after Warren Buffett-backed BYD Company Limited BYDDF and Nio.

While BYD’s market cap is HKD 582.4 billion ($75 billion), Nio’s is HKD 532 billion ($68.5 billion). Evergrande enjoys a market cap of HKD 649.7 billion ($83.67 billion).

See also: How to Buy Electric Vehicle (EV) Stocks

In January, Evergrande raised HKD 26 billion ($3.35 billion) after it sold 952.38 million shares priced at HKD 27.30 each to six investors, noted CNBC.

In September, the company reportedly also raised HKD 4 billion ($0.52 billion) through a share sale to investors which included the likes of Tencent and ride-hailing firm Didi. 

Evergrande isn’t alone in capitalizing on the excitement generated by EVs. This week Nikola Corporation NKLA said it was raising $100 million through a sale of stock to investors, as per a filing made with the United States Securities and Exchange Commission. 

In January, Nio had raised $1.3 billion through convertible notes.  Tesla, meanwhile. priced its $2 billion equity offering at $767 per share in February. 

Price Action: 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 shares closed 2.47% higher at $44.76 and gained 0.69% in the after-hours trading.

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