June 29, 2022

Evergrande NEV delays mass production again, denies it’s indefinitely delaying

(Yicai Global) May 19 — Struggling Chinese Evergrande New Energy Vehicle Group, which has yet to produce a single car, postponed mass production of its Hengchi 5 model to September from June due to the impact of recent Covid-19 outbreaks, said the electric vehicle arm of indebted property developer China Evergrande Group.

Deliveries will begin on September 20 instead of June 22 as previously announced, the Guangzhou-based company said on its WeChat account yesterday, denying rumors that the cash-strapped automaker would indefinitely postpone vehicle manufacturing. Pre-sales are continuing as normal and the company has started hiring sales agents in 18 cities from the end of last month, he added.

Production of the Hengchi 5 model has already started in Tianjin, National Business Daily reported today, citing a company insider. Presales are expected to begin in the second quarter, although Evergrande NEV has yet to set a date. A final launch date will be set depending on the Covid-19 situation and product readiness, he added.

Whether Hengchi 5 will ever see the light of day has long been in question, as it’s unclear where the huge investment needed to fund it will come from. Evergrande NEV is already deep in the red and its parent company, engulfed in its own financial crisis with debts of around 2 trillion yuan ($313.3 billion), is no longer in a position to help. Evergrande NEV’s deficit nearly doubled in the first half of last year from the same period a year earlier to CNY 4.8 billion (USD 746 million) on revenues of just CNY 37 million (5. $7 million).

Trading in Evergrande NEV shares has been suspended on the Hong Kong stock exchange since April 1 after the automaker failed to submit its 2021 financial report on time due to an investigation into a $13 security deposit. 4 billion yuan ($1.9 billion). by sister company Evergrande Property Services Group.

Editor: Kim Taylor