Chinese electric vehicle maker Jiyue is on the verge of collapse despite backing from technology giant Baidu and automotive conglomerate Geely. With mounting financial difficulties and slow sales, the company is struggling to avoid the fate of other failed Chinese automakers in recent years.
Initially formed as a joint venture between Baidu and Geely, Jiyue’s ownership structure was later restructured, granting Geely a 65% stake and leaving Baidu with 35%.
The company launched its first model, the Jiyue 01, last year as a competitor to the Tesla Model Y, followed by the award-winning Jiyue 07 sedan. However, despite positive design recognition, sales have been disappointing, with only 13,834 units sold across China this year.
The company is also facing significant financial difficulties. According to CarNewsChina , chief financial officer Liu Jining and his family are suspected of fleeing to Singapore with the company’s books. Reports indicate that Baidu uncovered a financial discrepancy of up to 7 billion yuan (~$962 million) and decided against investing an additional $412 million. Furthermore, Jiyue’s CEO, Xia Yiping, is believed to have overpaid suppliers, with the company owing Geely more than $200 million for parts as of February.
In response to the crisis, Jiyue announced plans to cut non-essential projects, lay off employees, delay salaries, and suspend social security payments. Both Baidu and Geely have pledged to assist Jiyue in covering social security contributions and providing after-sales services.
A restructuring plan has been presented to shareholders, though its effectiveness in saving the company remains uncertain. Should Jiyue fail, it will join other Chinese electric vehicle startups, such as Human Horizons, that have been unable to survive the fierce competition in the local market.
