Caixin
Jun 14, 2024 05:31 AM
BUSINESS

Evergrande Auto Ordered to Repay $262 Million of Government Subsidies

00:00
00:00/00:00
Listen to this article 1x
Shares of Evergrande Auto fell 27% Wednesday, its worst drop in nearly nine months
Shares of Evergrande Auto fell 27% Wednesday, its worst drop in nearly nine months

The electric vehicle (EV) unit of the embattled property developer China Evergrande Group was hit by a fresh blow after authorities ordered the company to repay about 1.9 billion yuan ($262.2 million) in government subsidies due to its failure to meet contractual obligations.

Hong Kong-listed China Evergrande New Energy Vehicle Group Ltd. (Evergrande Auto) said in a Tuesday filing, that it had received an order that the money be repaid within 15 days.

loadingImg
You've accessed an article available only to subscribers
VIEW OPTIONS

Unlock exclusive discounts with a Caixin group subscription — ideal for teams and organizations.

Subscribe to both Caixin Global and The Wall Street Journal — for the price of one.

Share this article
Open WeChat and scan the QR code
DIGEST HUB
Digest Hub Back
Explore the story in 30 seconds
  • Evergrande Auto was ordered to repay 1.9 billion yuan ($262.2 million) in government subsidies for failing to meet contractual obligations.
  • This financial strain could lead to compulsory repossession of assets; shares fell 27% Wednesday.
  • Despite past high ambitions and partnerships, the company faces severe financial woes, including a net loss of nearly 12 billion yuan in 2023, with a bleak production outlook.
AI generated, for reference only
Who’s Who
China Evergrande Group
China Evergrande Group is a struggling property developer whose EV unit, Evergrande Auto, faces financial difficulties. The company was recently ordered to repay 1.9 billion yuan in government subsidies due to unfulfilled contractual obligations, risking the repossession of assets. Despite initial high ambitions and strong valuation, Evergrande Auto has ceased production and faces a significant net liability. An investment deal with NWTN Inc. fell through after founder Hui Ka Yan was placed under police control.
China Evergrande New Energy Vehicle Group Ltd.
China Evergrande New Energy Vehicle Group Ltd. (Evergrande Auto) is the electric vehicle unit of China Evergrande Group. Founded in 2019, it aimed to be a leading EV-maker. The company has production facilities in Tianjin, Shanghai, and Guangzhou, with Tianjin being the only operational plant. Financially troubled, it reported a net loss of nearly 12 billion yuan in 2023 and faces significant liabilities. Production has halted, and the company is seeking new investment and facing administrative penalties.
AI generated, for reference only
What Happened When
Since April 2019:
Evergrande Auto signed a series of investment partnership agreements with local authorities.
April 2021:
Evergrande Auto reached its peak valuation, worth more than Ford Motor Co. and General Motors Co.
September 2022:
Evergrande Auto's Tianjin plant started producing its only available model, the Hengchi 5.
Late 2022:
Evergrande Auto began delivering electric sport utility vehicles.
Early 2023:
Evergrande Auto halted production due to a liquidity crunch.
August 2023:
Dubai-based NWTN Inc. announced an investment of $500 million in Evergrande Auto.
September 2023:
Hui Ka Yan, the founder of China Evergrande, was put under police control.
By the end of the year 2023:
Evergrande Auto had a net current liability of about 38.08 billion yuan.
Early 2024:
Evergrande Auto’s Tianjin plant became idle.
April 2024:
The investment agreement with NWTN Inc. was terminated.
Late May 2024:
Evergrande Auto disclosed that a potential buyer was considering taking a 29% stake in the company and extending a new line of credit.
Tuesday, June 11, 2024:
Evergrande Auto filed that it received an order to repay about 1.9 billion yuan in government subsidies within 15 days.
Wednesday, June 12, 2024:
Shares of Evergrande Auto fell 27%, its worst drop in nearly nine months.
AI generated, for reference only
Subscribe to unlock Digest Hub
SUBSCRIBE NOW
NEWSLETTERS
Get our CX Daily, weekly Must-Read and China Green Bulletin newsletters delivered free to your inbox, bringing you China's top headlines.

We ‘ve added you to our subscriber list.

Manage subscription
PODCAST