Evergrande Group Photo: CFP

China's industry regulator has given China Evergrande New Energy Vehicle Group approval to begin sales of its first electric car model, according to an official document . Vehicle sales and delivery are expected to be completed within the year, though it still faces fierce competition from rival automakers, experts claimed.

The Ministry of Industry and Information Technology (MIIT) included the Hengchi 5 model made by indebted property developer China Evergrande Group in a recommended promotion and application catalogue of electric vehicles, meaning that they are eligible for government subsidies and for general sale to the public.

In order to prepare for the launch of the new car, Evergrande NEV has published a recruitment advertisement for high-paid sales consultants and invested 100 million yuan ($15.68 million) to establish a sales company that covers the new energy vehicle sales and an online car hailing service.

The model is priced less than 200,000 yuan and is scheduled to begin accepting pre-orders in the second quarter of this year, National Business Daily reported on Tuesday, citing people familiar with the matter.

"It is delightful to see China Evergrande has finally yielded results in car building after years of hard work," Feng Shiming, an auto analyst with Shanghai-based Menutor Consulting, told the Global Times. "However it will face significant challenges. Whether it can survive in the market amid intense competition remains to be seen and tested by users' experience."

Data released by the China Automobile Association show that sales of new energy vehicles are gaining momentum in China.

From January to February this year, the production and sales of new energy vehicles hit 820,000 and 765,000 units, 1.6 times and 1.5 times higher than the same period last year.

Evergrande has invested 47.4 billion yuan in the new energy vehicle industry since 2018, including 24.9 billion yuan in acquiring core technologies and research and development, and a further 22.5 billion yuan for factory construction and equipment procurement, according to media reports.

The company is aiming to become the largest and strongest new energy vehicle group in the world, achieving annual production and sales of more than 1 million vehicles by 2025 and more than 5 million vehicles by 2035.

Global Times