China Evergrande New Energy Vehicle Group warned it may have to stop making electric vehicles if it can’t obtain new financing, having delivered just 900 of its much-delayed flagship model.
The company said it is seeking to cut costs by further reducing staff levels and improving management efficiency. However, “in face of the inability to obtain additional liquidity, the group is at risk of discontinuing production,” it said in a statement to the Hong Kong Stock Exchange.
While Evergrande had flagged as early as August 2021 that it was running short of cash, this is the starkest warning yet that founder Hui Ka Yan’s dream of taking on Elon Musk’s Tesla Inc. as the world’s biggest maker of electric vehicles is unlikely to be realized. Once one of China’s richest and most influential titans, Hui has lost most of his wealth after his property empire became embroiled in a debt crisis.