Electric-Vehicle Maker Gets Bailed Out After Spending $1 Billion and Making No Cars

A local government in eastern China’s Anhui province plans to bail out a cash-guzzling electric-car startup which has spent more than $1 billion and is yet to produce a single vehicle.

Singulato Motors has reportedly burned through all of the funding it has raised since it was founded in 2014, a total of about 7 billion yuan ($1.02 billion).

Now, the local government of Tongling, a city south of Anhui’s capital of Hefei, is stepping in to help the company obtain a regulatory permit and build its second factory, according to a filing (link in Chinese). The filing didn’t give any financial details.

The company headquarters will relocate from Beijing to Tongling under the bailout deal, and the city government will help the company seek a public listing in the future, the filing said.

Founded in 2014 by internet entrepreneur Shen Haiyin, Singulato was among dozens of Chinese startups that attempted to cash in on generous subsidies provided by Beijing to the electric car industry.

Early this year, it announced it had raised 3 billion yuan, taking the total amount raised to 7 billion yuan.

The Tongling government has been a major backer of the company since late 2016 when it participated in a $600 million funding round. The same year, Singulato agreed to build a factory in the city with a planned investment of 8 billion yuan.

The company previously announced it had spent 5 billion yuan to build a production facility in Central China’s Hunan province to make electric commercial vehicles.

Such massive spending left the company strapped for cash. Early in December it was forced to deny reports it had squandered all the 7 billion yuan it has raised and could not afford to pay staff.

All this despite the fact Singulato had only planned to deliver its first electric car — the model iS6 — to the market in 2018. It now says it will be delayed until next year.

This delay will see it fall further behind larger rivals such as Nio Inc., which has delivered more than 10,000 vehicles as of this month. Nio become China’s first electric vehicle startup to go public after it was listed in New York in September, raising $1 billion.

Contact reporter Mo Yelin (yelinmo@caixin.com)