Dubai company to invest $500m in Chinese EV maker

Hengchi

• NWTN deal with Evergrande to serve growing demand
• UAE electric vehicle market expected to grow 25%
• Affordable Chinese brands gaining market share

UAE company NWTN has announced a deal to invest $500 million in the Chinese manufacturer of electric vehicles including the Hengchi brand.

The investment in China Evergrande New Energy Vehicle Group aims to accelerate NWTN’s development in the EV space as it establishes an assembly plant in UAE capital Abu Dhabi. 

Headquartered in Dubai, the eco-conscious mobility and tech company will acquire 27.5 percent of the ordinary shares of Evergrande and the right to nominate a majority of its board. 

The proposed transaction is expected to close in the fourth quarter of 2023, subject to regulatory and shareholder approvals.

• Abu Dhabi bids to become electric vehicle manufacturing hub
• Gulf rivals jostle for position as EV test beds
• Emirates drives growth in electric vehicle adoption

Last year NWTN completed the full vehicle assembly facility in Abu Dhabi, which has an annual capacity of up to 10,000 units for the assembly of semi-knocked-down (partly assembled) electric vehicles.  

In phase two NWTN plans to introduce several new electric vehicle models and expand capacity to 50,000 units annually.

Evergrande was established in 2019 and has released nine electric vehicle models, of which the first mass-produced model, Hengchi5, was delivered in October 2022.

NWTN said it believes a partnership with Evergrande will enable synergies between the two companies, while facilitating Evergrande’s research and development and mass production of new car models for export overseas. 

China’s traditional export sectors – such as clothing, home appliances and furniture – have now been surpassed by electric vehicles, lithium-ion batteries and solar batteries as the primary drivers of foreign trade growth.

These industries contributed to a 61.6 percent year-on-year increase in total export value during the first half of 2023, according to data from the General Administration of Customs. 

Together they added 1.8 percentage points to China’s overall export growth.

NWTN

Growth of UAE EV market

According to the NWTN research, the UAE EV market is expected to grow at an annual rate of more than 25 percent over the next five years.

Earlier this month analysts at BMI, formerly Fitch Solutions, said the UAE is forecast to witness a 32 percent increase in sales of passenger electric vehicles this year after the government launches a national policy to support the sector’s growth.

Sales are expected to reach almost 22,000, up from an estimated 16,442 in 2022.

Longer-term calculations suggest the total number of EVs will exceed 370,000 by 2032, representing 11 percent of the UAE’s passenger vehicles.

BMI said Tesla vehicles remain popular in the UAE, along with traditional brands such as BMW, Mercedes, Volvo and Chevrolet.

However, more affordable Chinese EV brands such as BYD, Geely, Hongqi, Nio and Xpeng are also expected to gain market share over the short term.

Last month Suhail bin Mohammed Al Mazrouei, UAE minister of energy and infrastructure, outlined the details of the new National Electric Vehicles Policy. 

The policy aims to help the UAE achieve its objectives of reducing energy consumption by 40 percent and carbon emissions by 10 million tonnes in the transport sector by 2050, as well as increase the share of electric vehicles to 50 percent of total vehicles on our roads by 2050.