Geely-backed EV Brand Jiyue Faces Business Collapse, with Sudden Large-Scale Layoffs and Multi-Debt Defaults

On the afternoon of December 11th, Xia Yiping, the CEO of the Chinese electric car brand Jiyue, sent out an internal message admitting that the company is currently “facing challenges and needs to make immediate adjustments”. He proposed a series of actions, including merging departments and roles, cutting projects that won’t improve financial performance in the short term, and more.

Several Jiyue employees shared with the media that while they received their November salaries, they were now required to pay for their own social securities for November and December. Currently, all company operations have come to a halt, with a company-wide ban on group chat communication.

Jiyue plans to keep only a small number of employees to keep the business running. The rest of the employees have two options: either leave and receive compensation equivalent to N+1 months’ salary by the end of February next year, or stay on without pay from December onwards, essentially working at their own expense.

Insiders at Jiyue mentioned that the R&D department will be completely cut in this round of layoffs. The company currently has over 5000 employees, including full-time and outsourced staff. The after-sales department has over 300 employees, but according to the latest notice, only about 80 employees will remain, meaning only about one-fourth of the employees will stay.

Stores will stop selling, and test drive vehicles will no longer be available for customers. At the same time, the company is taking stock of its assets and reclaiming vehicles. Some Jiyue employees are preparing to defend their rights.

In a recent evening statement, Jiyue responded by saying that the company is actively seeking financing. Vehicle-related services are still running smoothly, and all channels can still book maintenance appointments and other services. New vehicle deliveries are proceeding as usual, but delays in customer deliveries may occur during the recent strategic adjustments. Regarding supplier partnerships, Jiyue is actively adjusting its finances and organizing payment schedules.

Someone close to Jiyue’s operations told Chinese media outlet Jiemian that the main reason for Jiyue’s sudden collapse is the lack of sufficient support from shareholders.

Baidu, a major investor, is not optimistic about Jiyue’s profitability and has decided to cut its losses. The largest shareholder, Geely, mainly provides platforms and technology, charging manufacturing fees. “In reality, Jiyue owes a significant amount of manufacturing fees to Geely.”

Internal sources at Jiyue revealed that due to outstanding debts, Geely is no longer providing new vehicles, leading to a halt in factory production lines. Some consumers have been urging for deliveries on Jiyue and Xia Yiping’s social media accounts.

Jiyue Automotive, previously known as Jidu Automotive, was jointly owned by Baidu and Geely with 55% and 45% stakes respectively. Baidu was responsible for defining Jiyue’s automotive products and conducting technical research and development, while Geely handled manufacturing. Before August 2023, Jiyue Automotive operated under the name Jidu Automotive for two years, releasing its first model during that time.

However, due to production qualification issues, Jidu Automotive had to make adjustments, affecting its brand promotion. In order to expedite mass production, Geely and Baidu newly established Hangzhou Jiyue Automotive Technology Co., with Geely holding 65% and Baidu 35%.

A senior industry analyst, who requested anonymity, mentioned in an interview with Jiemian that Baidu later participated more as a supplier in operations, while Geely, focusing on production, emphasized a closer relationship with Jiyue.

As per the same source, Jiyue currently has a stock of just over 200 vehicles. Due to overdue rent payments, some Jiyue stores have had their vehicles seized by property management, with one Shanghai store halting construction halfway through.

In the first 11 months of this year, Jiyue Automotive delivered over 14,000 vehicles. This translates to less than 1,300 vehicles per month. In November, Jiyue officially reported sales of 2,485 vehicles.

As of now, all content on Xia Yiping’s social media platforms has been cleared, and there have been no updates on his short video platform for two days. Some are calling out Xia Yiping online, demanding payment of 360,000 RMB owed to communication suppliers and stating that they have sent multiple payment reminders.

During a communication with all company employees, Xia Yiping mentioned that a more intense battle is on the horizon, and the management team will give their all to overcome the challenges.

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