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Debt-hit Evergrande to roll out EVs from next year; hopes to sell 1 million units by 2025

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Evergrande’s electric dreams have been hurt by the low confidence and the soaring debts of its parent company. However, this 'Hengchi' EV venture will be supported by the local government in Tianjin, where its production facilities are located.

Debt-hit Evergrande to roll out EVs from next year; hopes to sell 1 million units by 2025
The electric vehicle unit of Chinese real estate developer Evergrande has said the company’s first EVs will be rolled out by 2022. Evergrande New Energy Vehicle will be selling its EVs under the brand name Hengchi.
It will be receiving support from the local Tianjin government, where its production facilities are located, to achieve mass production as soon as possible. The local government will be coordinating with financial institutions to achieve that goal.
While the news sent shares of the China Evergrande New Energy Vehicle Group Ltd rising by over 10 percent, the stock managed to close only 4.5 percent higher. The company is expected to compete against sector giants Tesla and BYD, and successful startups like Nio and Xpeng.
The company had said it wants to sell one million units annually by 2025, and reach similar production levels to keep up with the hot EV market. But with the $300-billion debt of its parent company and group, confidence in Evergrande NEV is at a record low.
Evergrande’s $300-billion debt has caused a liquidity crisis in the company, with the company already missing several debt repayments. The situation is being closely monitored by Chinese authorities and global players, as the fall of Evergrande could have disastrous consequences both for China and the world. India, with its low exposure to Chinese markets, is expected to weather the storm without much fuss.
Evergrande’s EV ambitions have been hurt by the low confidence and the soaring debts of its parent company. The company had announced that there were delays to suppliers of its EV unit and that it had been seeking new investors as well.
Whether Founder and Chairman Hui Ka Yan, a self-made billionaire, will be able to save the company and its EV dreams, is yet to be seen.
 
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