China Evergrande’s EV unit caught unawares by demand for US$268 million of subsidies by local governments

The carmaking unit of troubled property giant China Evergrande has been asked by China’s local governments to return 1.9 billion yuan (US$267.7 million) of subsidies after the company failed to produce cars.

China Evergrande New Energy Vehicle Group (Evergrande NEV), which entered into a series of investment cooperation agreements with local authorities in April 2019, said the governments want to terminate the contracts and are demanding repayment, according to a filing to the Hong Kong stock exchange late on Wednesday night. The company’s shares have been suspended from trading since May 17 until further notice.