Enovate has already owed its employees two months of salary arrears and its factory in Changsha, Hunan province, has shut down production this year, according to local media.
(Image from Enovate's Weibo)
Enovate Motors, the Chinese new energy vehicle (NEV) startup that announced late last year that it would build a production base in Saudi Arabia, is actually facing financial woes in its home market. However, the good news is that it is about to receive life-saving money.
Enovate is set to close a new round of funding in the near future, amounting to RMB 750 million yuan ($108 million), a report in local media Auto Time today said, citing multiple sources.
The money will arrive no later than March 24, one of the people familiar with the matter said. Another source with access to the financing said that it is indeed happening and that specific plans are being negotiated.
Enovate was formerly known as Zhejiang Dianka Automobile, which was founded in 2015 and produces mini electric vehicles (EVs). The Enovate brand was officially launched in November 2018.
In September 2020, the company's first model, the all-electric SUV Enovate ME7, was launched.
Enovate made its second model, the SUV Enovate ME5 with extended-range technology, available in China on July 13, 2021.
Enovate has closed eight financing rounds totaling more than RMB 11.5 billion, with the company's most recent financing round on October 13, 2020 for more than RMB 5 billion, Auto Time's report noted.
So far this year, Enovate has owed its employees two months of salary arrears, and its factory in Changsha, Hunan province, has shut down production this year, according to the report.
In addition to the Changsha manufacturing base, Enovate is also building factories in Shaoxing, Zhejiang and Nanning, Guangxi, with a planned total capacity of 220,000 units for the three production bases.
The money Enovate is about to receive will first be used for employee payroll and to push the plants back into production, the report said, citing an internal employee.
The company's performance in China has been weak over the past two years, with sales of just 1,778 units in 2021 and 5,321 units in 2022.
Enovate has begun targeting overseas markets as competition in its home market grows fiercer.
Enovate signed a contract with Sumou Holding in Saudi Arabia on December 7 to jointly build a NEV production plant here, as CnEVPost previously reported.
The two companies will form a joint venture that will make two phases of spending totaling about $500 million in Saudi Arabia to build a production and R&D base with an annual capacity of about 100,000 NEVs.
The facility, when completed, will be the first Chinese-branded NEV production base in Saudi Arabia, Enovate said at the time.
Enovate is another carmaker besides WM Motor that has run into financial difficulties.
WM Motor has been in serious financial trouble, leading to disruptions in its operations over the past few months. On March 7, the company announced that it was addressing its challenges and was working hard to resume production.
WM Motor also has plans to enter Saudi Arabia, with an insider saying the company is planning a joint venture to set up a plant in the Middle East, according to an Auto Time report today.
The EV maker is currently in talks with the Saudi government and local wealth funds, and the exact timing of the plan is unknown, according to the report.