Evergrande’s NEV unit plunges on China’s order to refund US$262 million in state subsidies

The company failed to fulfil its obligation to set up a headquarters, and did not meet its production and sales goals, causing a local authority to terminate its April 2019 agreement with Evergrande NEV, according to the statement, which did not identify the authority.

Evergrande NEV has to return the subsidies within 15 days of the notice, or risk losing its assets, including the equipment, factory building and the land allocated to build its car assembly, the statement said.

A refund could “have a material impact on the financial position and operations” of Evergrande NEV or each of the relevant subsidiaries, the carmaker said, adding that it will apply for an administrative review on this decision.

A subsidiary of the carmaker in Tianjin received a separate order to stop producing and selling electric cars, according to a separate statement. Evergrande NEV said it has “actively rectified the issues after the inspection” and intends to appeal against the stop-work order.