She seems to have been rescued from the abyss into which her mother is falling. But not much, as Reuters reports that the New Energy Vehicle division is also suffering from the liquidity crisis of Evergrande, the Chinese real estate giant, which is grappling with the industry’s difficulties in its home country.

After launching an electric car in 2021 with the unveiling of the Hengchi 5 SUV, the Asian giant’s sustainable mobility automotive division is likely to soon you have to put the key under the door. At best, it could just temporarily stop production of its SUV, but that’s not necessarily the scenario that seems to be developing.

Four billion euros are needed

With almost 300 billion euros of debt, Evergrande is not necessarily in a very favorable situation. Therefore, the New Energy Vehicle division is also forced to cut all of its costs through staff and salary cuts, as well as through a general restructuring of its organization.

For the automotive division, the only real solution to date would be financing of more than 29 billion yuan (almost 4 billion euros) to re-issue the company. But getting such funding looks like a mission impossible given the parent company’s balance sheets.

“Faced with the inability to find additional liquidity, the group risks stopping production”can be read in the note.

And other models?

Meanwhile, plans for electric cars have advanced. Aiming to produce one million vehicles a year from 2025, Evergrande New Energy Vehicle began shipping its first model, the Hengchi 5 SUV, at the end of October 2022.

More than 900 models are already on the way, while other cars are planned. However, the manufacturer’s strategy should quickly fall apart if funds are not released soon.

As a reminder, the Hengchi 5 is an SUV with a battery capacity of 72.8 kWh, which provides the model with a range of approximately 605 km according to the Chinese CLTC approval cycle. The power is 204 hp, and the torque is 345 Nm, the car is sold in China for the equivalent of 42,000 euros.