(Yicai Global) Dec. 3 -- Baoneng Motor’s CNY30 billion (USD4.6 billion) new energy vehicle industrial park in Guangzhou is no longer under construction, Yicai Global discovered on a site visit. This comes as China’s top economic planner launches a probe into the investments of electric carmakers, with Baoneng coming under special scrutiny.

Where once Baoneng had dreams of building a ‘world-class green smart factory,’ Yicai Global found a deserted site covered with weeds on Dec. 1. Construction which began three years ago had long ago ground to a halt. Only part of the factory’s steel frame had been built.

The plant, with a floor area of 430,000 square meters, was meant to produce one million new energy vehicles a year. The first cars should have rolled off the production line during the third quarter.

Meanwhile, other production bases built by Guangzhou Automobile Group and Xpeng Motors which started at around the same time are already up and running.

Last month the National Development and Reform Commission ordered local governments to look into the investment projects of electric carmakers with a particular focus on Guangzhou-based China Evergrande New Energy Vehicle Group and Shenzhen-based Baoneng.

Evergrande NEV, which is the electric car arm of real estate behemoth China Evergrande Group, and Baoneng, a unit of property developer Baoneng Group, were told to report back by Nov. 18, but no updates have since been given by the NDRC.

Vested Interests

The NDRC probe seems to be related to whether the two companies were able to use their NEV interests to occupy more land, some analysts said. Both Evergrande and Baoneng moved into the electric car business from real estate.

Local governments of inland areas granted large tracts of land quite freely for high-tech projects in semiconductors and NEVs in order to attract investment, the boss of a manufacturing company in Guangzhou told Yicai Global. They also provided considerable subsidies.

Some companies were able to get mortgages to acquire thousands of acres of land, but then did not invest and became ‘zombie’ companies. Some firms changed the industrial land into commercial land.

Baoneng’s abandoned plant in the economic powerhouse of Guangzhou covers 247 acres.

The NDRC is also concerned about overcapacity in the industry, another insider said. The NEV projects of Evergrande and Baoneng have output capacities of hundreds of thousands, even millions, of vehicles per year, far beyond the nation’s needs.

Editor: Kim Taylor