Shares of Evergrande’s electric car unit pop 67% after raising billions to compete with Tesla in China

GUANGZHOU, China — Shares of the electric vehicle unit of Chinese property giant Evergrande surged as much as 67% on Monday after the company raised significant funding through a new share sale.

China Evergrande New Energy Vehicle Group surged to an all-time-high of 50 Hong Kong dollars before paring some of those gains. Shares of the company closed at 45.35 Hong Kong dollars.

The stock rocketed after the Chinese electric car company issued 952.38 million shares to six investors at a price of $27.30 Hong Kong dollars and raised net proceeds of 26 billion Hong Kong dollars ($3.35 billion).

The funding is another sign that China’s electric car market is heating up, and Evergrande could pose a challenge to Tesla as well as domestic rivals such as Nio and Xpeng Motors.

Last year, Evergrande showed off six new electric vehicles under a brand called Hengchi, with the hope of starting production this year. The company has not sold a single car yet.

In September, the company raised around 4 billion Hong Kong dollars through the sale of shares to investors including Chinese internet giant Tencent and ride-hailing service Didi.

China Evergrande New Energy Vehicle Group is also preparing for a listing on Shanghai’s Nasdaq-style Science and Technology Innovation Board, or the Star Market.

China’s electric car companies have been aggressively raising capital to ramp up production and take a lead in the competitive market.

Xpeng Motors raised $1.5 billion in an initial public offering in the U.S. last year and this month secured a credit line of 12.8 billion yuan ($1.98 billion).

This month, BYD — the Chinese electric carmaker backed by American billionaire Warren Buffett — said it raised 29.9 billion Hong Kong dollars through the issuance of new shares.