Shares of the electric car company affiliated with China's Evergrande have lost more than 75% of their value since the onset of the company's crisis, which has troubled global financial markets. Evergrande New Energy Vehicle Group's shares recovered some of their losses during trading on Monday, ending the day in the Hong Kong stock market down by 9.42%, after recording a 26% drop earlier in the session, bringing the stock price to HKD 2.02.
The company's shares began to decline with the outbreak of the Evergrande crisis, but today's drop is attributed to another crisis faced by its parent company, as the firm stated in a statement that it is facing an "uncertain future" unless it secures funding quickly.
After initially planning to go public in the Shanghai stock market, the company announced it had canceled the plan due to concerns over the fate of its bankrupt parent company. The company, which has not sold a single vehicle yet, saw its value surpass that of Ford in April of this year.
Despite being a small investment within the Evergrande empire, the electric car company represented the largest bet for the company's founder and China’s richest man, Xu Jiayin, on the future growth of the electric vehicle sector. Jiayin and others have invested billions in the company, which remains far from delivering its first vehicles.
Last Friday, the electric car manufacturer stated that there is no guarantee of its ability to meet its financial obligations and it continues to seek strategic investors. It added, "The group is facing a severe liquidity shortage." It continued, "In light of the liquidity pressure, the group has suspended payment of some of its operating costs and some suppliers have suspended the provision of project supplies."
Evergrande New Energy Vehicle Group was established in July of last year when Evergrande Health changed its name to Evergrande New Energy Vehicle Group. The company announced last month that it incurred losses estimated at around $743 million in the first half of the current year, with revenues of about $1 billion, most of which came from the company's businesses in health and elder care.
