China Evergrande New Energy Vehicle Group has reportedly paused mass production of the electric Hengchi 5 after just five weeks in production.
Two unnamed sources claim that the company’s production plans are falling apart because of a lack of new orders for the SUV. This comes despite Hengchi previously claiming to have received over 37,000 non-binding pre-orders for the 5 in July. As if suspending mass production wasn’t bad enough, it is reported that many employees haven’t been paid for October and November.
Read: Evergrande Has Started Chinese Deliveries Of The Electric Hengchi 5
Reuters notes that Evergrande is also preparing to lay off 10 per cent of employees at its automotive arm and will suspend salary payments to 25 per cent of its workforce for 1 to 3 months.
The automaker had planned to deliver 10,000 examples of the Hengchi 5 between October 1, 2022 and March 31, 2023 and said it would give buyers a full refund if they changed their minds within 15 days of collecting the keys.
Evergrande was once China’s biggest property developer but has fallen into debt and seen many developers default on offshore debt obligations. Chairman Hui Ka Yan has said that the company will transition its primary business from real estate to its new automotive arm and has the audacious goal of producing 1 million electric vehicles a year by 2025.
In early 2019, Hui Ka Yan infamously claimed that Evergrande would “strive to become the world’s biggest, and the strongest, electric vehicle group within three to five years.”
While the Hengchi 5 is the only model launched by the company thus far, it has previewed a whole host of EVs that it wants to produce, including a D-segment luxury sedan dubbed the 1, as well as the Hengchi 2 (a luxurious B-segment sedan), Hengchi 3 (a large luxury SUV), Hengchi 4 (a seven-seat MPV), and the Hengchi 6, an SUV.