After the electric car division of the heavily indebted Chinese real estate group Evergrande Group recently declared that it would stick to its plans to produce electric cars, Evergrande boss Hui Ka Yan has now announced his plans for Evergrande New Energy Vehicle. A sale that had been rumored in the meantime seems to be off the table.
There was speculation about a sale of the division because it was seen as a promising way to bring money into the coffers relatively quickly, given the advanced development of the Hengchi models - e-car startups Nio and Xpeng, for example, were mentioned as potential buyers, as was tech company Xiaomi, which is also known to want to get into the e-car business.
The only thing is, Evergrande itself now has other plans for its e-car offshoot. Instead of being a quick cash injection through a sale, Evergrande New Energy Vehicle is set to form the core of the entire group's future, according to Evergrande CEO Hui Ka Yan: within ten years, electric vehicles are to become the company's main business instead of real estate.
As Reuters reports, Evergrande's stock rises as much as six percent after the announcement, with Evergrande New Energy Vehicle's stock rising as much as 17 percent at its peak - though both shares later fell back a bit.