Evergrande Auto, the perennially struggling automotive arm of equally beleaguered property giant China Evergrande Group, has laid off all of its remaining employees.
The news looks to be all but the final nail in the coffin of one of the longest-running and most high-profile sagas in the Chinese automotive industry, a saga that saw the company showcase six concept cars in 2020, launch one (the Hengchi 5 SUV), see stop-start production, a failed attempt to sell the EV business to Xiaomi, and then the arrest of the brand’s president on suspected illegal activities.
With less than 1,000 units being sold in 2023, the writing was on the wall enough to see operations cease and employee numbers slashed from 6,000 to less than 500.
It now seems that all remaining employees have been sent out to the job market according to interviews with employees in July, with HR stating employees must now pay their social insurance.
They had planned to sell one million EVs in 2025, a figure which would have taken astronomical levels of success, and likely the imagination of a thousand script writers, to achieve, given only BYD is achieving anything like those numbers in 2024.
Their shares are trading at 0.27 HKD as of August 23rd, down nearly 23% in the last month, and down from highs of 1.66 HKD as recently as August 2023.
There are reports that the Chinese government has ordered repayment of subsidies due to missed contractual obligations, as much as $262 million, while two Evergrande Auto subsidiaries, Evergrande New Energy Vehicle and Evergrande Smart Vehicle, filed for bankruptcy in July.
Evergrande Auto has accumulated staggering losses of $15 billion over the last five years.
With parent company Evergrande Group ordered to liquidate in January 2024 after failing to reach a restructuring plan with creditors, it seems another Chinese EV maker looks set to finally close its doors for the last time.
