Chinese EV Maker Once Worth More Than Ford Wipes Out $80 Billion
(Bloomberg) -- Evergrande New Energy Vehicle Group Ltd. shares plunged anew Tuesday, extending a decline that has wiped out more than $80 billion in market value from the would-be electric-car maker this year.
The Hong Kong-listed company -- which at its peak in April was worth more than Ford Motor Co. despite not yet having a car on the market -- has become ensnared in the woes of its parent China Evergrande Group. The property developer said Tuesday it’s facing “tremendous” liquidity strains as it grapples with $300 billion of liabilities.
Evergrande also said it had made “no material progress” on plans to sell stakes in its electric-car unit, which was once one of its most valuable assets. Evergrande NEV stock plunged as much as 28% in Hong Kong trading Tuesday to as low as HK$3.70. It has slumped 95% from its highs.
In its earnings report last month, Evergrande NEV -- which stands for New Energy Vehicles -- said it might have to delay car production unless it can secure more capital in the short term, making its ambitious goal of unseating Tesla Inc. as the world’s biggest EV maker even more unlikely.
The plunge is a far cry from the heady days of last year and into early this year, when the stock capped a stunning 750% rally, becoming the poster child of a bubble in EV stocks as investors plowed money into the likes of Tesla and the U.S.-listed shares of Chinese startups Li Auto Inc., Xpeng Inc. and Nio Inc.
As recently as April, Evergrande NEV made a splash with an expansive showroom at the heart of the Shanghai Auto Show. But while nine models were put on display, none are yet available for sale, and the prospect of mass production is looking increasingly distant.
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