(Yicai Global) March 23 -- The electric car unit of embattled Chinese property developer China Evergrande Group says it needs more than CNY29 billion (USD4.2 billion) to stay in production.

China Evergrande New Energy Vehicle Group expects a net cash outflow of up to CNY7 billion (USD1 billion) by 2026 as the firm, which only started mass production in September last year, rolls out new models, the company said yesterday. To date, Evergrande NEV has shipped over 900 units of its first car, the medium-sized sports utility vehicle the Hengchi 5.

If no new liquidity is infused, Evergrande NEV could be forced to halt manufacturing, said the Shenzhen-based parent firm, which itself has debts of nearly CNY2 trillion (USD293.1 billion) and is unable to bail out its unit.

Evergrande NEV has already started to lay off workers to help ends meet, China Evergrande said yesterday. The carmaker now employs 2,795 people, a drop of 25 percent from June last year. It has also started reducing its headcount at its Swedish unit, National Electric Vehicle Sweden, which it acquired in June 2020.

Evergrande and Evergrande NEV were suspended from trading on the Hong Kong bourse in March 2022 for failing to submit their 2021 financial reports on time and have yet to resume trading.

Editors: Xu Wei, Kim Taylor