Shares of China Evergrande New Energy Vehicle – the company launched in 2019 with a vow to beat Tesla – fell as much as 5.6% on Tuesday after the electric vehicle maker posted a wider loss for the first half and said it may have to halt production of its cornerstone car.
The stock slid 2% in Hong Kong trading, lagging behind a 1.3% gain in the benchmark Hang Seng Index.
The unit of debt-laden China Evergrande Group said its first-half net loss widened to 4.79 billion yuan ($740.81 million) as compared to a 2.27 billion yuan loss in the same period a year earlier.
The company, whose vehicle brand name in Hengchi, said its EV mass production timetable may be delayed if it lacks further capital in the short term.
“The mass production of Hengchi vehicles has entered the final stretch, nonetheless the group is still facing challenges on its cash flows,” the company said in its earnings statement to the Hong Kong Stock Exchange. “If the group lacks further capital contribution in the short term, the mass production timetable of new energy vehicles may have to be delayed.”
The news is the latest blow to the carmaker, which has seen Tesla surge in sales while its own enterprise has barely got off the starting grid. It has also been a victim of its parent’s financial problems, with recent reports that the troubled property giant was in talks to sell a stake in the NEV unit to help pay off its massive debts.
- Mark McCord and Reuters