People walk past an unopened Evergrande electric car store in Wuhan, Hubei Province, China, on the last day of the National Day and Golden Week holidays on October 7, 2021. China’s largest real estate developer Evergrande is facing a liquidity crisis with a total debt of approximately US$300 billion. The problems facing the company may affect the Chinese economy and even the global economy.
Guangzhou, China – The electric vehicle unit of the troubled Chinese real estate developer Evergrande said its first cars will roll off the assembly line next year.
The debt-laden company said it had met with suppliers and the local government in Tianjin, where its production base is located, and promised to promote mass production of Hengchi brand cars.
China Evergrande New Energy Automobile Group’s share price rose more than 10% in early trading, but gave up some of the gains. During the lunch break in Hong Kong, their stock price rose by about 6%.
Evergrande has not delivered a car to customers yet-but it has great ambitions. It previously promised to produce and sell 1 million vehicles per year by 2025.
The Tianjin local government stated that it will coordinate with financial institutions to support Evergrande and help the company achieve mass production.
The parent company Evergrande Group is working hard to repay US$300 billion in debt. It is the most indebted real estate developer in the world and has missed several bond payments. Concerns about the company’s possible default have disrupted global markets, as some investors worry that it may have a contagious effect and harm the global economy.
Confidence in Evergrande plummeted.
Last month, Evergrande New Energy stated that there were delays in suppliers of its electric vehicle division, and some projects across the group had been suspended. Evergrande said it is looking for new investors.
The Chinese company said it has tested various models of its Hengchi cars throughout the year.
However, the automaker is entering the highly competitive Chinese electric vehicle market and will face upstarts such as Weilai and Xiaopeng, as well as established companies such as BYD and Tesla.
Xiaopeng Motors, a US-listed startup, said on Monday that it has produced 100,000 vehicles six years after the company was founded.