Jiyue, a Geely-Baidu joint-venture EV brand born in 2021 as Jidu Auto, will scale down its operations and puruse fresh capital amidst brutal competition in China, reports the South China Morning Post (SCMP).
The 55% Baidu-, 45% Geely-owned carmaker reportedly said in a statement yesterday that it would cancel projects that do not improve the company’s financial health and merge some business units to tackle redundancy.
“We will make all-out efforts to focus on our goals to improve efficiency in operation and management. All measures will be taken to adapt to the new situations amid the rebirth of the company,” the statement said.
There has been speculation on Chinese social media that Jiyue is approaching liquidation due to low sales in the world’s largest EV market, which has over 50 major players.
In a letter to employees seen by SCMP, CEO Xia Yiping admitted that Jiyue was under pressure to stay afloat and that it urgently needed to revamp existing operating units.
“The management will do its best to overcome difficulties. The restructuring plan has received full understanding and full support from the shareholders,” Xia’s letter said, without revealing which business units would close or the number of affected employees.
According to SCMP, Jiyue delivered 2,485 vehicles in mainland China in November (-20% month-on-month) and 14,000 units year-to-date. A carmaker that delivers over 10,000 units a month is considered strong in the Chinese market.
Jiyue currently sells just one model, the 01 EV SUV, which debuted in 2023. In August it announced a second model, the 07 EV sedan.
Jiyue is the second Chinese EV maker this month to take drastic measures amidst worsening financial conditions. Last week, Hozon New Energy Automobile founder and chairman Fang Yunzhou told employees in a letter that the company would undergo optimisation, reorganisation and efforts to simplify its management structure.
Without divulging details of the lay-offs, Fang said they were necessary to “establish a new Hozon”, adding that the company was determined to launch an initial public offering in Hong Kong in spite of cash flow problems.
According to the China Passenger Car Association, sales of pure electric and plug-in hybrid cars on the mainland accounted for 65% of the global total in the first half of 2024.
The China Association of Automobile Manufacturers expects mainland EV deliveries to exceed 11 million units this year, accounting for about 55% of the country’s total EV production capacity of 20.2 million units – nearly unchanged from a year earlier.
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