Evergrande Hengchi 5 production is on hold due to lack of funds

Evergrande's EV adventure is getting worse each month. The company was forced to halt the production of the Hengchi 5 model today due to a lack of funds. The pause is expected to last until May, according to the company, but that may just be wishful thinking.

Orders for the Evergrande Hengchi 5 were opened in May last year, and the first deliveries took place in October. Then, in December the troubles began, forcing the company to layoff at least 10% of its then-workforce, along with salary cuts for those who were lucky enough to keep their jobs. There was also a report claiming mass production had been suspended due to a lack of sufficient new orders.

Fast forward a few months, and in March Evergrande announced that it continued to push ahead with cost cutting initiatives in order to focus all of its remaining financial resources on supporting the mass production of the Hengchi 5, including layoffs at its Swedish subsidiary National Electric Vehicle Sweden AB. That announcement proved foreshadowing, as it also explained that there was a risk of halting production if no additional liquidity becomes available.

That brings us to today, when the money's finally run out, forcing the shutdown of production. So far over 900 Hengchi 5 units have been delivered to customers. The Hengchi 5 starts at CNY 179,000 ($25,819 converted).

Evergrande plans to launch many additional models in the future, that is if it can get more than CNY 29 billion ($4.1 billion converted) in financing.

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