Evergrande New Energy Vehicle Group, the ambitious electric vehicle (EV) arm of Chinese real estate giant Evergrande, is on the brink of disaster. The company’s latest filing reveals a dire situation, with the automaker struggling to deliver on its production targets, facing a liquidity crisis and cutting costs by reducing its workforce headcount.
The filing highlights that Evergrande NEV delivered only around 900 units of its flagship Hengchi 5 model since production began in mid-September 2022, a major setback for the company’s EV ambitions. To make matters worse, the automaker has had to cut 931 jobs in a bid to shore up finances, and the filing warns of the risk of shutdown if new funding is not secured.
Despite these challenges, Evergrande NEV is not giving up on its goal of becoming a leading player in the EV market. The company has outlined plans to secure financing worth over ¥29 billion ($4.2 billion) to develop new flagship models and achieve mass production. But the company’s ability to secure these funds remains uncertain.
The filing suggests that Evergrande’s once ambitious plans to sell more than one million EVs annually by 2025 and five million annually by 2035 are now highly unlikely. However, the company is not the only player in the EV market facing tough times, with industry watchers pointing out that Evergrande’s woes could signal broader challenges for China’s EV industry.
The current situation facing Evergrande NEV highlights the challenges facing even the biggest players in the highly competitive and rapidly evolving EV market. As the industry continues to mature and evolve, success will likely be driven by those companies that can remain agile and adapt to changing market conditions, rather than relying on big, ambitious plans that may prove challenging to execute.
