Hengda Automobile received US $500 million investment from Middle East capital to accelerate the mass production of Hengchi 5 and the development of new models

　　On August 14, Hengda Automobile (0708.HK) announced that it had received a strategic investment of about 500 million US dollars from the Newton Group (Nadaq: NWTN) headquartered in Dubai, UAE.

　　It is understood that Newton Group is committed to providing global users with passenger-centric high-end electric vehicle products and green energy solutions, and has a vehicle assembly plant in Abu Dhabi. This investment in Evergrande Automobile will effectively solve the financial problems of Evergrande Automobile, help Evergrande Automobile to fully promote the production and sales of Hengchi 5, and further promote the development and mass production of new models such as Hengchi 6 and Hengchi 7.

　　As Hengda’s first mass-produced car, the Hengchi 5 has been officially mass-produced at the Tianjin factory in September 2022. According to the 2022 financial report released by Hengda Automobile, more than 320 Hengchi 5s were delivered during the reporting period last year. At the same time, Hengda Automobile has also built display experience centers, sales centers and after-sales service centers in Beijing, Shanghai, Guangzhou and Tianjin. As of the end of May this year, the cumulative delivery volume of Hengchi 5 exceeded 1,000 vehicles.

　　Despite this, Hengda still faces serious losses. According to the previously released financial reports, in 2021 and 2022, Hengda Automobile lost 56.344 billion yuan and 27.664 billion yuan respectively, and the cumulative loss in two years was 84 billion yuan. Due to insufficient funds, Hengda Automobile’s Tianjin plant suspended production of Hengchi 5 on April 24 this year, and did not officially resume production until May 23.

　　As Hengchi 5 continues to advance mass production, Hengda Automobile is also further improving its product matrix. It is reported that the current Hengchi 6 and Hengchi 7 new models have been designed and frozen, and a large number of tests have been carried out to verify, including the winter and summer standards have been completed, and are fully promoting research and development and mass production.

　　Behind this, Hengda Automobile is also actively building a complete production and supply chain system. At present, Hengda Automobile has established an automobile manufacturing base in Tianjin in terms of production and manufacturing, with an annual planned production capacity of 50,000 sets, and has auto parts manufacturing bases in Shanghai and Guangzhou. The annual planned production capacity is 100,000 sets and 200,000 sets respectively. In addition, Hengda Automobile has also established cooperation with nearly 200 world-renowned suppliers such as Bosch, Mainland, Ambove, and Ningde Times to build a supply chain system. (Author: Vivi)