Evergrande's EV Unit Sells Undeveloped Land For $200M

China Evergrande New Energy Vehicle Group returned several undeveloped tracts of land to the Chinese government in exchange for 1.28 billion yuan ($200 million) to alleviate its cash crunch and keep operations afloat, Zhang Sidong reported for the South China Morning Post (SCMP) late.

Photo Insert: An Evergrande Auto EV on display at a car show in China

The proceeds – some of which have been confiscated by the government – will be used to fund construction projects, pay wages to migrant workers, and pay for any unreturned land parcels, the Hong Kong-listed company, also known as Evergrande Auto, said in an exchange filing Friday night.

The land, totaling 2.7 million square meters (28 million square feet), had been designated for seven industrial and residential property projects, Evergrande Auto said. The funds provide a lifeline to the carmaker, which has so far unveiled nine EV models, none of which has progressed to mass production.

The company said earlier that production would begin this month, with delivery slated for next year.

The survival of Evergrande Auto is also of significant importance to its cash-strapped parent, China Evergrande, which is aiming to shift its business focus from property development to EV manufacturing in 10 years, according to founder Hui Ka-yan.

Evergrande Auto unveiled a plan earlier this month to raise HK$500 million (US$64.2 million) through new shares to bankroll the production of its EVs under the brand Hengchi, which means “ever running” in Chinese.

The carmaker, which posted a loss of 4.8 billion yuan in the first half of the year, has filed for approval for the sales of its SUVs, government data showed.

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