China's Evergrande EV ordered to repay $262mn subsidies, faces asset seizure
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China has ordered the deeply indebted Evergrande conglomerate's electric car subsidiary to repay $262 million in subsidies for failing to meet its contractual obligations or risk having its assets seized, the company announced on Tuesday.
Evergrande, once China's leading property developer with interests in multiple sectors, has been strangled by surging debt, estimated in June 2023 to be worth some $328 billion.
"The relevant local administrative authority considered that (Evergrande New Energy Vehicle Group and its subsidiaries)... have committed breach of contracts" by failing to disclose their financial results as required, the company said in a press release.
Evergrande New Energy Vehicle Group has been ordered to pay back some 1.9 billion yuan ($261.9 million) within 15 days, the manufacturer said.
The decision exposes Evergrande's car subsidiary "to the risks of compulsory resumption of the land of the relevant plants, and the buildings and equipment thereon being used for repayment of the said incentives and subsidies," it added.
The indebtedness of Evergrande has scuppered the electric carmaker's ambitions and limited its cash flow, while sales of its vehicles have struggled to take off.
When Evergrande's car-making subsidiary was founded in 2019, it set a three to five-year goal to become the most powerful manufacturer of electric cars in the world.