(Yicai Global) March 30 -- Shares in China Evergrande New Energy Vehicle Group sank as much as 14.4 percent today on its first day of trading after an over one-week suspension after the electric car arm of debt-laden real estate developer China Evergrande Group said it plans to go ahead with mass production of its first vehicles in June despite having very little cash.

Evergrande NEV [HKG:0708] closed down 10.8 percent at HKD3.14 (USD0.40), giving it a market capitalization of HKD34 billion (USD4.5 billion). Earlier in the day it had slumped to HKD3.01.

Evergrande NEV, which has yet to produce a single car, aims to begin mass production of the Hengchi 5 model on June 22, the Guangzhou-based firm said yesterday. Where the funds will come from to finance this has yet to be seen.

The huge investment needed to make electric cars has driven the company heavily into the red and its parent firm, engulfed in its own financial crisis with debts of around CNY2 trillion (USD313.3 billion), is no longer able to assist. Evergrande NEV’s deficit nearly doubled in the first half last year from the same period the year before to CNY4.8 billion (USD746 million) on revenue of just CNY37 million (USD5.7 million).

The company, which has just finished an over one-week trading suspension due to a probe into a security deposit at its sister company Evergrande Property Services, is set to be suspended again from April 1 as it will not be able to release its 2021 financial report on time. Evergrande NEV will try its best to finish the 2021 audit within the next three months, it added.

Evergrande Group and Evergrande Property, which also suspended trading over the same incident, have said they too will postpone submitting their 2021 annual reports and they have not resumed trading yet.

Editor: Kim Taylor