Trouble bodes for Chinese EV industry
The Chinese automobile industry is facing tough times: due to decreasing sales, several bankruptcies may emerge. Zotye appears not to be in the best shape, long before the state subsidies are set to expire.
Zotye was already sued in May for failing to pay their battery supplier, who is demanding that some of their assets be frozen. Zotye’s planned joint venture with Ford announced two years ago also still has not moved forward, and is unclear whether it will move forward any time soon.
Now a reportedly leaked bank communication from a Chinese bank revealed that four Chinese NEV manufacturers would announce bankruptcy before the end of the year. Automobile journalist Greg Kable added that these include Lifan, Leopaard and Hawtai, although the manufacturers themselves have denied the claims.
Big shake up in the Chinese automobile industry. Word out of China suggests at least four car makers have filed for bankruptcy protection measures. Losses are said to total up to RMB50 billion (over $US7 billion). Banks with high automobile industry lending could be hit hard …
— Greg Kable (@GregKable) October 9, 2019
An internal intranet memo from a Chinese bank
— Greg Kable (@GregKable) October 9, 2019
On the Chinese automobile industry shake out mentioned yesterday . . .
It is being reported that Zotye, Lifan, Leopaard and Hawtai are set to enter bankruptcy.
Zotye is denying bankruptcy proceedings in an official communiqué. pic.twitter.com/I1utTY2UTC
— Greg Kable (@GregKable) October 10, 2019
What becomes of these manufacturers remains to be seen, however the decreasing sales and tightening of state subsidies for New Energy Vehicles will certainly spell out tough times ahead for Chinese manufacturers.
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