(Yicai Global) March 16 -- Shares of China Evergrande New Energy Vehicle Group surged after the country’s second-most valuable listed automaker, which has not yet sold any cars, said it will develop a smart vehicle operating system with tech giant Tencent Holdings.

After gaining as much as 11.6 percent in Hong Kong earlier today, Evergrande NEV [HKG:0708] ended 10.8 percent up at HKD59.25 (USD7.63). That gives the Guangzhou-based company a market cap of HKD528.9 billion (USD68.1 billion) versus BYD [SHE:002594] at CNY497 billion (USD76.5 billion).

Evergrande NEV, the vehicle arm of property giant China Evergrande, has penned an agreement with a subsidiary of Shenzhen-based Tencent to establish a joint venture, it said in a statement yesterday. Evergrande NEV will own 60 percent of the JV. State-owned Chang’an Automobile has a 37.1 percent stake in the Tencent unit.

Chinese internet giants Baidu and Alibaba Group Holding are also striving to develop their own smart car OS by cooperating with vehicle manufacturers.

Evergrande NEV and Tencent, which took a small stake in the electric carmaker via a private placement last September, will make use of their advantages in artificial intelligence, Big Data, and cloud computing to develop the OS to create a world-leading smart vehicle ecosystem, the statement added.

Evergrande NEV has big ambitions. Last November, it started trial output at plants in Shanghai and Guangzhou in preparation for mass production of the six Hengchi brand models it unveiled in August 2020. The plan is to have 10 factories in China with each of them adding output of 100,000 cars per year after their first phases. 

China Evergrande started its foray into the automotive field in 2018. The following year group founder Xu Jiayin said Evergrande NEV will try to surpass Tesla and become the world's largest and most powerful electric carmaker within three to five years.

Editor: Emmi Laine, Xiao Yi