Government investors support Chinese EV player Letin

The round was led by Shandong province-based Weicheng West Investment & Development Group and featured several other provincial and municipal government-owned vehicles.

The proceeds will mainly go towards R&D, marketing, sales expansion, and adding production capacity, but the round is widely regarded as a lifeline for Letin.

Founded in 2008 and based in Shandong, the company was a pioneer in the low-speed electric vehicle (EV) space. As tighter regulations caused this market segment to shrink, Letin moved into mainstream EV passenger vehicles through the acquisition of Sichuan-based Yema Auto in 2019.

However, sales volume reached only 3,387 units in 2019 and fell to 1,051 units the following year. In October of this year, local media reported that Letin had imposed salary cuts, was delaying payments to suppliers, and had suspended delivery of products despite receiving full payment.

This is not the first government bailout for a Chinese EV company. In 2020, Hefei, the capital of Anhui province, invested CNY 7bn in Nio on the condition that the company relocated a sizeable portion of its business to the city. The assets Nio injected into Hefei were said to be worth CNY 17.8bn, or 85% of the company's average market value at the time. 

The bailout was widely considered not only to have rescued Nio, but to have helped restore confidence in China’s EV industry.

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• Topics
• Greater China
• Early-stage
• Technology
• Restructuring
• China
• automobiles
• Electric Vehicles