Evergrande’s first EV may roll out in 2022 with local government aid, a year behind schedule and after losing US$84 billion in value

Carmaking arm of distressed developer said it will make sure the first EV is ready for delivery early next year
Evergrande Auto said the Tianjin Binhai High-tech New Zone had pledged its support

Electric & new energy vehicles

Iris Ouyangin Shenzhen

Published: 10:12pm, 11 Oct 2021

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China Evergrande Group’s electric vehicle arm said it still planned to have its first Hengchi-branded car ready for delivery early in 2022, even as the parent company battles to stay afloat amid a cash crisis that has crippled production.

Liu Yongzhuo, president of Evergrande New Energy Vehicle, said that with the help of local government support, the carmaker will make sure that its first EV has been built and tested at its Tianjin factory and is ready for sale to the public early next year. The company, also known as Evergrande Auto, had launched a three-month campaign to tackle its problems, he said.

According to a report posted on the company’s website late on Monday, Evergrande Auto managers held a meeting today with partners and local officials in Binhai, a district of Tianjin. At the meeting, the Communist Party head of the Binhai High-Tech Area in Tianjin said the local government will provide the necessary help.

The bulletin came as the company – which once had grand ambitions of becoming the largest electric car manufacturer in the world – reels from production halts and volatile price movements in the stock market, as its parent desperately grapples with about US$300 billion of liabilities.

The crisis at Evergrande, one of the largest property developers in China, is unnerving investors who are concerned about its effect on the stability of China’s property market and economic growth.

“The hi-tech district and the Evergrande New Energy Vehicle Group have their fates intertwined. We need to face the difficulties, seek opportunities, and provide help in financing policy, review and coordination among related departments and financial institutions to support the company to step out of this difficult situation as soon as possible and help Evergrande to achieve its goal of mass production early,” said Xia Qinglin, the district Communist Party chief.

Evergrande Auto recently halted some of its EV operations after failing to pay suppliers. It has been trying to find new funding while using share option incentives to keep talent on board even as its Shanghai car plant sits idle amid the debt woes of its parent.

The carmaker, which briefly topped the century-old Ford Motor in market capitalisation in February after raising HK$10 billion (US$1.3 billion) in a top-up stock sale in Hong Kong a month earlier, is yet to deliver a single car.

While it has stopped paying nearly all suppliers and some of its employees because of the cash squeeze, existing staff have been told to get the assembly line ready to produce its first model.

Evergrande Auto had set itself the lofty goal of building a million electric vehicles a year by 2025 as part of its journey to global domination. Earlier this year, before its troubles spiralled, it set a goal of delivering 100,000 units in 2022.

In August, when Evergrande was reportedly in talks with smartphone maker Xiaomi over the sale of a stake in the EV unit, two prototypes of its Hengchi cars were seen by the South China Morning Post conducting a road test.