HONG KONG -- China's Evergrande Group plans to prioritize growth of its nascent electric-vehicle business over its troubled core real estate operations.
An announcement by its Chairman, Hui Ka Yan, reported by Chinese state media on Friday, that it would make its new electric vehicle venture its primary business, instead of property, within 10 years, cheered investors on Monday.
Evergrande rose as much as 6 percent while China Evergrande New Energy Vehicle Group as much as 17 percent, although both later trimmed their gains. The benchmark Heng Seng Index climbed 0.1 percent.
Evergrande, which is reeling under more than $300 billion in liabilities, averted a costly default last week with a last-minute bond coupon payment, buying it more time to head off a looming debt crunch with its next major payment deadline on Friday.
Evergrande's new vehicle business, founded in 2019, has yet to reveal a production model or sell a single vehicle.
The company's first electric car -- called Hengchi -- will be delivered from its Tianjin factory at the start of next year, according to an Oct. 11 statement on Evergrande's website, which also referred to a "three-month war" to tackle the main challenges in EVs.
In August, the company said it might have to delay mass production of cars unless it can secure more capital in the short term.
The reported shift to the electric car business will be a challenge, despite Hui's ambitions to take on industry giants such as Tesla.
Evergrande is struggling with a cash crisis that has led it to consider selling stakes in units including Evergrande NEV, which owns the assets of Saab.