(Yicai Global) July 29 -- Chinese electric vehicle startup Sitech DEV confirmed to Yicai Global that it has halted building work on a new production plant because a new energy vehicle maker that was to share it ran into difficulties this year.

Chief Executive Xian Yue confirmed recent speculation, saying the plant is a 200,000-unit-a-year production base for it and Changjiang Automobile in Gui'an New Area in the southwest province ofGuizhou. Three-quarters of the plant's capacity, which Sitech DEV is not involved in building, was assigned to Guizhou Changjiang, he said, adding that that firm's difficulties triggered the new project's postponement.

Guizhou Changjiang is an affiliate of Hangzhou-based Changjiang Automobile, which also had production issues, with some workers going unpaid for four months as a result, the National Business Daily reported last week. Guizhou Changjiang is in similar trouble, the report added, saying dozens of its employees received just three months of salary after protesting about unpaid wages on July 5.

Sitech DEV has stopped production at its trial workshop in Gui'an New Area, the National Business Daily reported.

The company is now seeking another round of funding and is likely to close that this year, Xian said. Sitech DEV has an asset-light strategy with foundries making vehicles for it, he said, adding that the firm has postponed plans to build its own plants.

Sitech DEV's first A0-level minicar DEV1 made by FAW Group appeared on the market in the second half of last year, and orders from dealers for the vehicle exceeded 40,000 units, according to the firm's website.

It sold just 1,343 in the first half, and has delivered about 5,300 thus far, including 4,000 at the end of last year, far less than planned, per statistics from the China Passenger Car Association.

Sitech DEV's still has orders, but the firm is in the midst of a production and delivery slowdown, Xian noted.

Editors: Xu Wei, Ben Armour