Evergrande plans to launch electrical vehicles in 2022 and enhance the shares of its auto unit by 6%
People walk past an unopened Evergrande electric car shop on the last day of National Day and Golden Week on October 7, 2021 in Wuhan, Hubei Province, China. Evergrande, China’s largest real estate developer, is facing a liquidity crisis with total debt of around $ 300 billion. The company’s problems could affect China’s economy and the world economy at large.
GUANGZHOU, China – The electric vehicle division of competitive Chinese real estate developer Evergrande said its first cars will roll off the assembly line next year.
The indebted company said it had met with vendors and the local government in Tianjin, where its manufacturing base is located, and pledged to mass-produce its Hengchi-branded cars.
China Evergrande New Energy Vehicle Group stocks rose over 10% in morning trading, but detracted from some of those gains. During the lunch break in Hong Kong, they were around 6% higher.
Evergrande has not yet delivered a single vehicle to customers – but it has high ambitions. Previously, the company had promised to produce and sell 1 million cars annually through 2025.
Tianjin’s local government said it would coordinate with financial institutions to support Evergrande and help the company achieve mass production.
Parent company Evergrande Group is struggling to pay off $ 300 billion in debt. She is the world’s most heavily indebted property developer and has already missed several bond payments. Fears that the company could default have rocked global markets as some investors fear it could be contagious and hurt the global economy.
Confidence in Evergrande has fallen.
Last month, Evergrande NEV said that suppliers to its electric vehicle division had been experiencing delays and that some projects across the group had been suspended. Evergrande is looking for new investors.
The Chinese company said it had tested different models of its Hengchi car throughout the year.
But the automaker is entering an extremely competitive electric car market in China and will take on upstart players like Nio and Xpeng and established players like BYD and Tesla.
The US-listed start-up Xpeng announced on Monday that it had produced 100,000 cars six years after the company started.