Evergrande Auto can no longer keep to schedule

Production should actually have started in the 3rd quarter of 2021. In 2022, Hengchi brand electric cars should have been produced and sold in large numbers. The schedule can no longer be kept, as the Evergrande Group announced on Monday. Liquidity is tight. Without fresh capital there will be no production. The competitors show how to raise liquidity in an elegant way.

Zeekr 001 - the newest EV from the Geely Group
Zeekr 001 - the newest EV from the Geely Group

It's no surprise that Evergrande Auto's schedule rejects. The automotive start-up is currently not receiving any new funds from the group. That still has some liquid reserves, but is only financed for a reasonable period of time. According to the company's own statements, liquidity is not sufficient for all obligations entered into up to the end of the year.

Ambitions just too big?

Future funding from the Evergrande mother seems impossible. New investors or a major shareholder are still not in sight. Perhaps the bet on the Hengchi brand, with more than a dozen new electric cars, was just too big. Even the largest auto companies do not trust themselves to be able to carry out parallel developments of this magnitude in such a tight time frame. Not to mention a newbie who has no expertise in the auto business.

It could be that you have simply gambled yourself away at Evergrande, and that no investor wants to get into the existing obligations in an unknown amount. Because normally it is not a big problem to advertise new liquidity for an electric car adventure.

Others show how to do it

The Geely Group provides an example. Their new electric car brand "Zeekr" got off to an ambitious start, but one size smaller than Evergrande and Hengchi. The purely electric "Zeekr 001" was originally intended to be a high-end offer from the Geely and Volvo brands Lynk & Co. In China, a decision was made at short notice and another new car brand was born.

For the future development of the brand, which is now valued at US $ 9 billion, US $ 500 million has been raised in the last few days. Prominent investors are Intel and the battery manufacturer CATL. the Investors hold 5,6% of the shares in "Zeekr". If “Zeekr” becomes a successful model, the investment has paid off.

Of course, the comparison is not entirely correct. In contrast to Evergrande Auto, the Geely Group successfully builds cars and the orientation of “Zeekr“Is relatively clear. Which makes it easier for investors to give money and accept a high rating than for a brand with the name "Hengchi", whose philosophy has not yet been revealed to anyone and whose planned numbers are at least questionable.

With images from "Zeekr"

3 thoughts on "Evergrande Auto can no longer keep to schedule"

  • As before, what counts is what you can successfully sell on the market and what you earn money with. If I want to raise money now I have to show that my product has what it takes. It has already been written in the comments, where are the crash test results, the verifiable test drives with a long range, ... ok, park out, the interior is luxurious, but somehow the unique selling point that triggers a "want" reflex is missing. Premium would be an autopilot that does not drive into the police car, or the robotaxi that drives safely through the village faster than 20km / h.
    Well, thank you from me for the information about the business crime, Tom is the only one who has Evergrande on his radar.

  • Evergrande for ever?

    At first I didn't like the topic at all. The relationship to Saab was far too thin for me. Today I have to say that Tom has shown a good nose. Evergrande's relationship to Saab is as poor as ever, but what a great thriller ...

    I really appreciate the topic now. Sure, it's entertaining. But the information and insights into economic, economic, political and social processes in China are what ultimately captivate me. Even if Evergrande is just one example of many possible, it is damn exciting to be able to follow such an example over a longer period of time as if under a magnifying glass.
    This is pretty much unique in Germany in terms of journalism and media. And it's damn exciting and revealing. What should you say? Again, thank you Tom?

    I don't think that's enough, but I can't think of an award for which I could suggest the Saabblog with the prospect of a deserved success. The blog is just like Saab itself and flies under the radar ...
    So it stays that way. Again! Thanks Tom, the blog is really big cinema.

  • That with "too big" has something. The question will be which contracts have to be fulfilled in the background. The development costs for 10 or 14 electric cars should not have to be paid from the current account.

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