Embattled Evergrande road-tests five electric cars as it looks to offload new-energy vehicle unit to ease debt mountain

The indebted developer said the testing of its Hengchi models marked a key step towards mass production

It is a ‘statement by Evergrande that operations at its carmaking unit remain normal’, says Ding Haifeng of financial advisory firm Integrity

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Chairman Hui Ka-yan admitted this week that the group faces risks of default on loans. Photo: Nora Tam

Published: 8:00pm, 3 Sep 2021Updated: 11:55am, 15 Sep 2021

Embattled China Evergrande said its electric vehicle (EV) business has taken a big step forward by road-testing five models, in an apparent attempt to lift some of the gloom surrounding its prospects ahead of a potential sale.

Evergrande, the heavily indebted property developer chaired by one of China’s richest people, Hui Ka-yan, said that a fleet of 53 cars comprising five EVs – the Hengchi 1,3,5,6 and 7 models – have completed a 70-day road test covering half a million kilometres. The tests were carried out in Turpan in China’s northwestern Xinjiang province and Qinghai in the southern island province of Hainan, according to a post on the company’s official WeChat account on Friday.

Hengchi is a brand name under Hong Kong-listed Evergrande New Energy Vehicle Group. Literally translated, it means “never stop”.

The announcement of the tests comes just three days after Evergrande New Energy Vehicle warned in its interim earnings report that production of electric cars may be delayed due to a cash squeeze.

“News about the road test is a statement by Evergrande that operations at its carmaking unit remain normal,” said Ding Haifeng, a consultant at Shanghai-based financial advisory firm Integrity. “But investors and market watchers are still worried about the car company’s future because of its parent’s financial woes.”

Evergrande said that the summer road test marked a key milestone ahead of the mass production of the cars, proving the safety and stability of Hengchi’s engine performance, battery capability and thermal management.

“The test, with the fleet of cars travelling a total 20,000 hours and 500,000 kilometres, has fully shown Hengchi’s quality and capability under extreme weather, and the success marks a new era for Evergrande’s carmaking plans,” said the company.

In its interim results report on Tuesday, Evergrande said: “If the group lacks capital in the short term, the mass production timetable of new energy vehicles may have to be delayed.”