(Bloomberg) -- China Evergrande New Energy Vehicle Group Ltd.’s expansive pop-up showroom sits at the heart of Shanghai’s National Exhibition and Convention Center. With nine models on display, it’s hard to miss. The electric car upstart has one of the biggest booths at China’s 2021 Auto Show, which starts Monday, opposite storied German automaker BMW AG. Yet its bold presence belies an uncomfortable truth -- Evergrande hasn’t sold a single car under its own brand.China’s largest property developer has an array of investments outside of real estate, from soccer clubs to retirement villages. But it’s the recent entry into electric cars that’s captured investors’ imaginations. Shareholders have pushed Evergrande NEV’s Hong Kong-listed stock up more than 1,000% over the past 12 months, allowing it to raise billions of dollars in fresh capital. It now has a market value of $87 billion, greater than Ford Motor Co. and General Motors Co.Such exuberance over an automaker that has repeatedly pushed back forecasts for when it will mass produce a car is emblematic of the froth that has been building in EVs over the past year, with investors plowing money into a rally that briefly made Elon Musk the world’s richest person and has some concerned about a bubble. Perhaps nowhere is that more evident than in China, home to the world’s biggest market for new energy cars, where a mind-boggling 400 EV manufacturers now jostle for consumers’ attention, led by a cabal of startups valued more than established auto players but which have yet to turn a profit.Evergrande NEV was a relatively late entrant to that scene.In March 2019, Hui Ka Yan, Evergrande’s chairman and one of China’s richest men, vowed to take on Musk and become the world’s biggest maker of EVs in three to five years. Tesla Inc.’s Model Y crossover had just had its global debut. In the two years since, Tesla has gained an enviable foothold in China, establishing its first factory outside the U.S. and delivering around 35,500 cars in March. Chinese rival Nio Inc. earlier this month reached a significant milestone when its 100,000th EV rolled off the production line, prompting Musk to tweet his congratulations.Despite his lofty ambitions and Evergrande NEV’s rich valuation, Yan has repeatedly pushed back car-production targets. The tycoon’s coterie of rich friends, among others, have stumped up billions, but making cars -- electric or otherwise -- is hard, and hugely capital intensive. Nio’s gross margins only flipped into positive territory in mid-2020, after years of heavy losses and a lifeline from a municipal government.Speaking on an earnings call in late March after Evergrande NEV’s full-year loss for 2020 widened by a yawning 67%, Yan said the company planned to begin trial production at the end of this year, delayed from an original timeline of last September. Deliveries aren’t expected to start until some time in 2022. Expectations for annual production capacity of 500,000 to 1 million EVs by March 2022 were also pushed back until 2025. Still, the company issued a buoyant new forecast: 5 million cars a year by 2035. For comparison, global giant Volkswagen AG delivered 3.85 million units in China in 2020.It’s not just Evergrande’s delayed production schedule that’s raising eyebrows. A closer look under the company’s hood reveals practices that have industry veterans scratching their heads: from making selling apartments part of car executives’ KPIs, to attempting a model lineup that would be ambitious for even the most established automaker.‘Weird Company’“It’s a weird company,” said Bill Russo, the founder and chief executive officer of advisory firm Automobility Ltd. in Shanghai. “They’ve poured a lot of money in that hasn’t really returned anything, plus they’re entering an industry in which they have very limited understanding. And I’m not sure they’ve got the technological edge of Nio or Xpeng,” he said, referring to the New York-listed Chinese EV makers already deploying intelligent features in their cars, like laser-based navigation.A closer look at Evergrande NEV’s operations reveals the extent of its unorthodox approach. While it’s established three production bases -- in Guangzhou, Tianjin in China’s north, and Shanghai -- the company doesn’t have a general car assembly line up and running. Equipment and machinery is still being adjusted, according to people who have seen inside the factories but don’t want to be identified discussing confidential matters.In a response to questions from Bloomberg, Evergrande NEV said it was preparing machinery for trial production, and would be able to make “one car a minute” once full production is reached.The company is targeting mass production and delivery next year of four models -- the Hengchi 5 and 6; the luxe Hengchi 1 (which will go up against Tesla’s Model S); and the Hengchi 3, according to people familiar with the matter. The company has told investors it aims to deliver 100,000 cars in 2022, one of the people said, roughly the number of units Nio, Xpeng Inc. and Li Auto Inc., the other U.S.-listed Chinese EV contender, delivered last year, combined.Its workers are also being asked to help sell real estate, the backbone of the Evergrande empire.New hires are required to undergo internal training and attend seminars that drill them on the company’s property history and have nothing to do with car making. In addition, employees from all departments, from production-line workers to back-office staff, are encouraged to promote the sale of apartments, whether through posting ads on social media or bringing relatives and friends along to sale centers to make them appear busy. Managerial-level staff even have their performance bonuses tied to such endeavors, people familiar with the measure said.Meanwhile, the ambitious targets have Evergrande NEV turning to outsourcing and skipping procedures seen as normal practice in the industry, people with knowledge of the situation say.While it’s hiring aggressively and recently scored Daniel Kirchert, a former BMW executive who co-founded EV startup Byton Ltd., the firm has contracted most of the design and R&D of its cars to overseas suppliers, some of the people said. Contracting out the majority of design and engineering work is an unusual approach for a company wanting to achieve such scale.14 Models At OnceOne of those companies is Canada’s Magna International Inc., which is leading the development of the Hengchi 1 and 3, one of the people said. Evergrande NEV has also teamed with Chinese tech giants Tencent Holdings Ltd. and Baidu Inc. to co-develop a software system for the Hengchi range. It will allow drivers to use a mobile app to instruct the car to drive via autopilot to a certain location and use artificial intelligence to switch on appliances at home while on the road, according to a statement last month.A spokesperson for Evergrande said it was working with international partners including Magna, EDAG Engineering Group AG and Austrian parts maker AVL List GmbH in developing “14 models simultaneously.” Representatives from Magna didn’t immediately respond to a request for comment. A Baidu spokesperson said the company had no further details to share, while a representative for Tencent said the software venture is with a related firm called Beijing Tinnove Technology Co. that operates independently. Tinnove didn’t respond to requests for comment.Rather than staggering model releases, Evergrande NEV appears to be rolling out every type of car all at once under its Hengchi brand, which sports a roaring gold lion on the badge and translates loosely to ‘unstoppable gallop.’ The nine models being launched span almost all major passenger vehicle segments from sedans to SUVS and multi-purpose vehicles. Prices will range from about 80,000 yuan ($12,000) to 600,000 yuan, although the final costs could change, a person familiar said.That’s a completely different product development strategy to EV pioneers like Tesla, which only has four models on offer. Nio and Xpeng have also chosen to focus on just a handful of marques, and even then are struggling to break into the black.“The market has proved the effectiveness of the ‘one product in vogue at one time’ strategy,” said Zhang Xiang, an automobile industry researcher at the North China University of Technology. “Evergrande is offering many products and expects a win. There’s a question mark over whether this will work.”Without any long-term carmaking nous, Evergrande has issued uncompromising directives to meet its latest production targets, according to the people. Two models, including the Hengchi 5, a compact SUV that rivals Xpeng’s G3, are targeting mass production in a little over 20 months. To hit that timing, certain industry procedures, like making mule cars, or testbed vehicles equipped with prototype components that require evaluation, may be skipped, people familiar with the situation said. Evergrande told Bloomberg it has entered a “sprint stage toward mass production.”As it is, Bloomberg could only find one instance where the Hengchi 5 has been showcased in public, in photos and grainy footage released by Evergrande in February as the cars drove around a snow-covered field in Inner Mongolia. The company’s shares surged to a record.Glossing over those steps is unusual, said Zhong Shi, a former automotive project manager turned independent analyst.“There’s a standard engineering process of product development, validation and verification, which includes several laboratory and road tests” in China and everywhere else, Zhong said. “It’s hard to compress that to shorter than three years.”While there’s no suggestion Evergrande’s approach violates any regulations, its stock-market run could be in for a reality check. After similarly hefty market gains, some EV startups in the U.S. that have yet to prove their viability as revenue-generating, profitable entities have lost their shine over the past few months amid concern about valuations and as established carmakers like VW move faster into EV fray.Read more: The End of Tesla’s Dominance May Be Closer Than It AppearsThe industry’s multi-billion dollar surge also hasn’t escaped Beijing’s attention. Evergrande NEV shares dipped lower last month after an editorial from the state-run Xinhua news agency highlighted concerns about how the EV sector is evolving. Of particular worry are companies that are shirking their responsibility to build quality cars, a blind race by local governments to attract EV projects, and high valuations by companies that have yet to deliver a single mass-produced car, according to the missive, which named Evergrande specifically in that regard. “The huge gap between production capacity and market value shows there is hype in the NEV market,” it said.Still, Evergrande NEV’s stock has gained 18% since then, buoyed by the outlook for China’s electric-car market. EVs currently account for about 5% of China’s annual car sales, BloombergNEF data show, with demand forecast to soar as the market matures and electric-car prices fall. EV sales in China may climb more than 50% this year alone, research firm Canalys said in a February report.With competition also on the rise, some outside Evergrande NEV’s loyal shareholder base remain skeptical.“The market is getting crowded but unless you have a preferred lane, there’s not much chance to win,” Automobility’s Russo said. “Maybe there’s some synergy with the property businesses but right now it’s an EV story, and a pretty expensive one.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.