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The money for help is in place! Xu Jiayin's Dream of making cars is hopeful again.

2024-02-24 Update From: AutoBeta autobeta NAV: AutoBeta > News >


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On August 21, according to the Financial Associated Press, the first transition fund newly introduced by Evergrande Motor Co., Ltd. has arrived on schedule today.


Last week, Evergrande announced that it had received the first strategic investment of about US $500 million (about 3.6 billion yuan) from the Dubai-based Newton Group in the United Arab Emirates. Another 600 million yuan of transition funds will be received one after another five working days after the announcement. According to the plan, all the war investment funds obtained this time will be used in Evergrande Automobile Tianjin Factory to ensure the normal production of Hengchi 5 and the mass production of Hengchi 6 and 7 one after another.

At that time, Evergrande also stressed that holding hands with Middle Eastern capital would effectively solve the financial difficulties facing Evergrande's development. In addition, in addition to large financial assistance, Newton Group will also help Evergrande to open up overseas markets and export 30,000 to 50,000 Hengchi vehicles to the Middle East market every year.

Compared with traditional car companies, Evergrande cut into the new energy car track through a series of overseas mergers and acquisitions, which can be called "unprecedented" in the automobile circle, and was once regarded by the industry as "RMB players" and "not short of money", giving people a feeling of "profligacy and profligacy". However, even so, Evergrande can not escape the fate of "lack of money". The "lack of money" has also repeatedly hit a brick wall in Evergrande's mass production process.


In August 2020, Evergrande released a total of six new models of Hengchi 1-6, and further released a total of three models of Hengchi 7-9 the following year, that is to say, Evergrande has laid out a total of nine models since it entered the auto circle. As a new car track brand, Evergrande layout product speed can be called "amazing", but its new car mass production is full of twists and turns. So far, only one Hengchi 5 model under Evergrande has achieved mass production. The car was mass produced at the Tianjin factory in September 2022 and began delivery in October of the same year, but by the end of May 2023, Hengchi 5 delivered only more than 1000 vehicles. And it was forced to suspend production for a short time due to financial constraints.

In April this year, Evergrande issued a notice revealing that the Tianjin factory had suspended production of the Hengchi 5 due to lack of funds. Before that, Evergrande suspended other factories and concentrated its resources on production in Tianjin. In short, Evergrande fell into a total suspension of production. At that time, in order to ease the financial pressure, China Evergrande planned to buy Evergrande Automobile related projects for 2 yuan and acquired about 24.8 billion yuan in debt to help Evergrande get out of trouble. It was not until May 23 that the Tianjin factory resumed full production.


All the funds invested by the Newton Group strategy will be used for the normal production of Hengchi 5 and the successive mass production of Hengchi 6 and 7. Among them, Hengchi 6 is a compact SUV owned by Evergrande New Energy, which was originally scheduled to go offline at the end of 2022 and mass production in the first half of 2023, while Hengchi 7 is a B-class luxury car, which is expected to be offline in the first half of 2023 and mass production in the second half of 2023. However, due to financial problems, both models failed to advance as scheduled. With the arrival of the funds, Evergrande may soon have a new car on the market.

Of course, although Newton's strategic investment can alleviate Evergrande's urgent needs to some extent, it is far from being able to pull Evergrande, which is mired in financial crisis, out of the quagmire. Evergrande Automotive reported huge losses for two consecutive years, with a cumulative loss of 84.008 billion yuan, including a net loss of 56.344 billion yuan in 2021 and a net loss of 27.664 billion yuan in 2022. As of December 31, 2022, Evergrande had a cumulative loss of 98.906 billion yuan, of which from 2018 to 2020 Evergrande lost 1.429 billion yuan, 4.426 billion yuan and 7.394 billion yuan respectively. In addition, as of the end of 2022, Evergrande's total debt was 183.872 billion yuan, excluding 3.314 billion yuan in advance, the debt was 180.558 billion yuan, while Evergrande's total assets were 115.22 billion yuan. In other words, Evergrande is seriously insolvent.


Car building is a costly task, and Evergrande has not yet improved in its automobile business, and the financial crisis is still an unavoidable problem in the process of Evergrande car building. Evergrande wants to continue to operate normally and mass produce more new cars, which means that a large amount of "blood transfusion" is still needed. As for whether Evergrande can build a car under the renewal of Newton Group in the short term, the answer will soon emerge.

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