GUANGZHOU, China — The electric vehicle unit of embattled Chinese property developer Evergrande said its first cars will roll off the production line next year.
The debt-laden company said it met with suppliers and the local government in Tianjin, where its production base is, and pledged to push forward with mass production of its Hengchi-branded cars.
Shares of China Evergrande New Energy Vehicle Group were up over 10% in morning trade but pared some of those gains. They were around 6% higher at the lunch break in Hong Kong.
Evergrande has not delivered a single vehicle to customers yet — but it has lofty ambitions. It previously pledged annual production and sales of 1 million cars by 2025.
Tianjin’s local government said it would coordinate with financial institutions to support Evergrande and help the company achieve mass production.
The parent company Evergrande Group is struggling to pay off $300 billion of liabilities. It is the world’s most indebted property developer and has already missed several bond payments. Fears that the company could default have roiled global markets as some investors are worried it may have contagion effects and hurt the global economy.
Confidence in Evergrande has plummeted.
Last month, Evergrande NEV said there were delays to suppliers of its electric vehicle unit and that some projects across the group have been suspended. Evergrande said it is looking for new investors.
The Chinese firm said it has tested various models of its Hengchi car throughout the year.
But the automaker is entering an extremely competitive electric car market in China and will face off against upstarts such as Nio and Xpeng and established players like BYD and Tesla.
U.S.-listed start-up Xpeng said Monday it has produced 100,000 cars, six years after the company launched.