Faraday investor Evergrande buys 51% of NEVS
China's third largest property developer moves decisively into the EV industry
Chinese corporation Evergrande Health Industry Group – Faraday Future’s disputed investor – has made a major investment in Chinese-owned National Electric Vehicle Sweden (NEVS) formerly Saab. Evergrande acquired a majority of NEVS shares at 51 per cent for a price of 930 million US dollars.
Evergrande Group is China’s third-largest property developer by sales. The Group has bought control of the electric vehicle maker through its subsidiary Evergrande Health, bolstering Group founder’s ambition to diversify from real estate into the rapidly growing EV industry. The company already owns 31 % of Californian EV startup Faraday Futures after initially settling for 45% stake, but more about that later.
The latest EV company that Evergrande has bought into, National Electric Vehicle Sweden, is itself entirely Chinese-owned despite having “Sweden” in its name. NEVS initial purchase of Saab bankrupt estate would have licensed the company to use the Saab brand and its griffin logo on vehicles assembled in China. However, the Saab legacy continued to be difficult as NEVS filed for bankruptcy protection in 2014.
Consequently, NEVS owners emerged as companies from Tianjin’s municipal government, together with the research branch of a Chinese cabinet think tank and the country’s second-largest phone company Unicom. The carmaker dropped its plan to use the Saab trademark, and instead decided to assemble cars based on Saab’s 9-3 platform in Tianjin under its own brand. In addition to this plant, the company owns the original plant in Trollhättan, Sweden, and have started to build another one in Shanghai.
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Now NEVS is primarily owned by Evergrande Health, which has a controlling share at 51% for a price of 930 million US dollars (816 million euros). The first installment of 430 million dollars has already been paid while the remainder of the transaction will be completed by the end of January, according to the press release.
Evergrande’s latest foray into the EV industry brings us back to Faraday Future: Although the initial deal worth a whooping 2 billion dollars was only settled in July of last year, the two companies quickly fell into dispute. Evergrande accused Faraday Future of manipulating it into paying 800 million US dollars upfront and then asking more, while the carmaker said that Evergrande was deliberately holding back investment to starve the company for the purpose of obtaining its intellectual property. Faraday employees even turned to crowdfunding to keep the company afloat.
However, in December last year, Evergrande said it agreed to restructure its investment pledge in Faraday Future, and both sides have agreed to drop all allegations against each other. To date, Evergrande has invested 800 million US dollars in Faraday Future and now owns a 31% stake in the company but will not make any further investments. New investors are therefore wanted as always at the electric vehicle maker.
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