Evergrande Auto subsidiary expected to lay off 95% of its workforce, or face bankruptcy.

Recently, the global electric car company NEVS, based in Sweden, announced the launch of a “hibernation plan,” which aims to lay off 320 employees over the next six months, accounting for nearly 95% of the total workforce. Once the layoff plan takes effect, the number of employees in the company will drop to only 20 people. Evergrande Motor owns 100% of NEVS and has not sold any of its shares in the company.

NEVS was established in April 2012 as a special-purpose acquisition company specifically designed to acquire Saab Automobile’s technology and assets. The original wholly owned subsidiary of the company was National Modern Energy Holdings, which was founded by Jiang Dalong. NEVS focuses on the production of electric intelligent vehicles, motor control systems, smart charging, and shared mobility.

NEVS is also an indirect shareholder of Guoneng Motors, a domestic start-up carmaker. In June 2015, Guoneng Motors was established in the Tianjin Binhai New Area with a registered capital of 2.4 billion yuan. Guoneng Motors has not only obtained the production qualification for pure electric passenger cars, but also launched its first product, the Guoneng Motor 93, for presale at the end of October 2018. Its experience in the automobile manufacturing industry is one of the reasons why Evergrande chose NEVS.

On January 15, 2019, Evergrande Health purchased Mini Minor Limited and its 51% stake in NEVS for a total price of $930 million. Subsequently, Mini Minor also subscribed for NEVS new shares. Prior to the announcement, Mini Minor held 82.4% of NEVS’s shares. After the completion of the acquisition, NEVS will become a wholly-owned subsidiary of Mini Minor. In other words, Evergrande Health owns 100% of NEVS’s controlling stake.

Currently, NEVS has announced the launch of a “hibernation plan” to reduce all costs, repay supplier debts, and avoid bankruptcy liquidation. The above-mentioned layoffs are part of this plan.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.