GAC denies rumours of Evergrande EV plant acquisition

by Hou Ruining

Guangzhou Automobile Group (GAC) has denied speculation that it is set to acquire the Nansha factory of troubled developer-turned-EV-maker China Evergrande New Energy Vehicle Group, following a frenzied rally in Evergrande Auto’s shares.

In a statement released late Tuesday on its official WeChat account, the state-owned carmaker said neither the group nor its recently established EV unit, Huawang Auto (GH project), had held any discussions with Evergrande Auto or any related parties regarding a potential acquisition of the facility.

“To avoid misleading the public and investors, and to maintain orderly market conditions, we clarify: GAC Group and Huawang Auto have never engaged in any form of communication or negotiation over the acquisition of Evergrande Auto’s Nansha plant,” the company said.

Shares of Evergrande Auto surged by as much as 227 per cent during trading on Tuesday before closing 74.79 per cent higher at HK$0.208. The rally followed unverified reports that GAC’s GH project would take over the Nansha facility.

A GAC spokesperson told local media that the GH project is a “light-asset operating company” and will prioritize the use of production capacity from existing GAC brands such as Aion and Trumpchi. “

Huawang Auto Technology (Guangzhou) Co Ltd was registered in Guangzhou’s Nansha district on March 18 with a capital of 1.5 billion yuan (US$208 million). According to public records, its business scope includes the sale and manufacturing of EVs, parts and testing equipment.

GAC first announced the GH project in January, stating it would invest 1.5 billion yuan into a new entity that would collaborate closely with Chinese tech giant Huawei. The two companies aim to jointly define and design new vehicles, working together on product development, marketing strategies and ecosystem services to build a next-generation EV brand based on a new vehicle architecture.

Following that announcement, speculation quickly spread online that the new joint project with Huawei would take over Evergrande Auto’s factory in Guangzhou. Until Tuesday’s clarification, GAC had remained silent on the matter.