China Evergrande Group’s financial woes have spilled over to Sweden, with a unit of the company’s electric vehicle (EV) arm in talks to find new backers after cutting 300 jobs.
“I’m acting as if things won’t be working out with Evergrande,” Stefan Tilk, the CEO of National Electric Vehicle Sweden AB, also known as NEVS, said in an interview. “Therefore we have entered discussions with new intended owners or project financiers.”
He declined to name them, citing non-disclosure agreements.
Chinese property developer Evergrande is battling to stay afloat as it contends with more than US$300 billion in liabilities. The fallout has rippled through China’s economy and global financial markets, and its Hong Kong-listed EV arm is also facing a battle for survival.
Evergrande New Energy Vehicle Group Ltd (NEV) has missed salary payments to some employees, fallen behind on paying suppliers and even stopped free lunches for workers at its research center. As recently as April, it was valued at more than the Ford Motor Co, before a precipitous decline that wiped out almost US$83 billion in market cap.
NEVS in August gave termination notices to nearly half its 670 workers at the former Saab factory in Trollhattan. There is “no major activity” in the plant, Tilk said.
“The Evergrande situation triggered the decision,” he said. “These are things I had wanted to do for some time, but now it became necessary, given that Evergrande no longer can finance us.”
Tilk said his unit still has money to pay its workers. “I can’t give an exact date, but we can still manage,” he said. “We are talking beyond a few months.”
Evergrande NEV last week warned of a “serious shortage of funds,” making it likely to miss its delayed target of starting mass production next year. The closest the public has come to seeing the cars is the nine models it had on display at flashy exhibit at April’s Shanghai auto show.
As NEVS has a license to manufacture vehicles in China, and a factory in Tianjin, Tilk is resting his hopes on the company being able to play a key role in Evergrande’s ambition to bring a car to market.
“If there’s an asset they own outside of China that they care about, it’s NEVS,” Tilk said. “We are an essential piece of the puzzle for them to be able to manage their venture. The question mark is whether they have enough funds, stakeholders, if they’ll be able to invest further. I don’t know.”
NEVS was founded in 2012 and bought Saab’s assets out of bankruptcy, before running into financial difficulties of its own. It put production of its Saab 9-3 on hold in 2014 before entering into debt reorganization that lasted almost a year.
Evergrande first invested in the company in early 2019 through its EV arm, before lifting its stake later that year.
The deal was part of an acquisition spree by Evergrande founder Xu Jiayin (許家印) as he embarked on an ambitious push to overtake Elon Musk’s Tesla Inc. as the world’s biggest EV maker — a goal that is looking increasingly unreachable as he struggles to rescue his debt-laden empire.
South Korea would avoid capitalizing on China’s ban on a US chipmaker, seeing the move by Beijing as an attempt to drive a wedge between Seoul and Washington, a person familiar with the situation said. The South Korean government would not encourage its memorychip firms to grab market share in China lost by Micron Technology Inc, which has been barred for use in critical industries by Beijing on national security grounds, the person said. China is the biggest market for South Korea semiconductor firms Samsung Electronics Co and SK Hynix Inc and home to some of their factories. Their operations in China
GEOPOLITICAL RISKS: The company has a deep collaboration with TSMC, but it is also open to working with Samsung Electronics Co and Intel Corp, Nvidia’s CEO said Nvidia Corp, the world’s biggest artificial intelligence (AI) GPU supplier, yesterday said that it is diversifying its supply chain partners in order to enhance supply chain resilience amid geopolitical tensions. “All of our supply chain is designed for maximum diversity and redundancy so that we can have resilience. Our company is very big and so we have a lot of customers depending on us. And so our supply chain resilience is very important to us. We manufacture in as many places as we can,” Nvidia founder and chief executive officer Jensen Huang (黃仁勳) said in response to a reporter’s question in
DIVERSIFICATION: The chip designer expects new non-smartphone products to be available next year or in 2025 as it seeks new growth engines to broaden its portfolio MediaTek Inc (聯發科) yesterday said it expects non-mobile phone chips, such as automotive chips, to drive its growth beyond 2025, as it pursues diversification to create a more balanced portfolio. The Hsinchu-based chip designer said it has counted on smartphone chips, power management chips and chips for other applications to fuel its growth in the past few years, but it is developing new products to continue growing. “Our future growth drivers, of course, will be outside of smartphones,” MediaTek chairman Rick Tsai (蔡明介) told shareholders at the company’s annual general meeting in Hsinchu City. “As new products would be available next year
BIG MARKET: As growth in the number of devices and data traffic accelerates, it will not be possible to send everything to the cloud, a Qualcomm executive said Qualcomm Inc is betting the future of artificial intelligence (AI) will require more computing power than what the cloud alone can provide. The world’s largest maker of smartphone processors is transitioning from a communications company into an “intelligent edge computing” firm, Qualcomm senior vice president Alex Katouzian said. The edge in question is the mobile device that a user taps to access a network or service, and Katouzian used his time headlining one of the major keynote events at the Computex show in Taipei to make the case for how big a market that would be. The US company’s chips help smartphones harness