Evergrande’s EV unit suspends mass production due to lack of orders

Evergrande Hengchi 5 model

China Evergrande Group’s electric vehicle unit has suspended mass production of its only model due to a lack of new orders, Reuters news report said.

China Evergrande New Energy Vehicle Group said in mid-September that it had started mass production of the Hengchi 5 model at a plant in the northern city of Tianjin and in late October said it had delivered its first 100 cars.

Evergrande has paused production as there are not enough new orders for the electric sport-utility vehicle.

Many employees have yet to receive salaries for October and November.

The unit planned to lay off 10 percent of workers and would suspend salary payments to 25 percent of its workers for 1 to 3 months.

Evergrande, once China’s top-selling property developer, touted the EV unit as key to its transformation plans, with Chairman Hui Ka Yan vowing to shift the group’s primary business within 10 years from real estate to the automobile venture, and to make 1 million vehicles a year by 2025.

Evergrande in July said it had received non-binding pre-orders for more than 37,000 units of the Hengchi 5.