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Dubai EV maker pulls out of $500m Chinese deal

Hui Kan Yan electric vehicle NWTN Evergrande Reuters/Bobby Yip
An investigation by authorities into Hui Ka Yan, founder of Evergrande, has halted a deal for Dubai electric vehicle make NWTN to buy a slice of his company
  • Chinese founder under investigation
  • NWTN continues R&D investment
  • Target of 50,000 vehicles a year

Dubai’s electric vehicle maker NWTN has pulled out of a deal to invest $500 million in Evergrande, a Chinese EV manufacturer.

NWTN, which operates an electric vehicle assembly facility in Abu Dhabi, said it has terminated plans to buy 27.5 percent of the shares of China Evergrande New Energy Vehicle Group.

Evergrande was established in 2019 and has released a number of EV models, with the first mass-produced model, Hengchi5, delivered in October 2022.

The share deal, first announced in August last year, was intended to support NWTN’s ambitions for its UAE business after the launch of its electric vehicle assembly facility in Khalifa Economic Zones in Abu Dhabi at the end of 2022.

But NWTN suspended the deal in September after trading in Evergrande shares on the Hong Kong Stock Exchange was temporarily halted when the company confirmed that its billionaire founder, Hui Ka Yan, was being investigated by authorities.

Trading resumed in October but last week NWTN said it was exercising its right to terminate the agreement because “the conditions to closing had not been satisfied or waived”. Evergrande’s share price has plunged since September from HK$0.81 to HK$0.22

NWTN also revealed it made a net loss of $69.8 million in the six months to June 30 last year.

During the same period, the company delivered 10 vehicles to one customer and has since attained the Made in the Emirates mark.

It said that the construction of its parts and supply chain facility in Jinhua, China, was “essentially done” by the end of 2023. Factory staff have been recruited and are undergoing training.  

NWTN also said it continued to invest in research and development, particularly in its premium flagship electric vehicle, called the Muse.

In 2022, NWTN completed its full vehicle assembly facility in Abu Dhabi. It has an annual capacity of up to 10,000 units for putting together semi-knocked-down (partly assembled) electric vehicles.  

In phase two, NWTN plans to introduce several new electric vehicle models and expand capacity to 50,000 units a year.

NWTN’s research says the UAE electric vehicle market is expected to grow at an annual rate of more than 25 percent over the next five years.

Analysts at BMI said longer-term calculations suggest the total number of EVs will exceed 370,000 by 2032, representing 11 percent of the UAE’s passenger vehicles.

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