Baidu’s JV with Geely becomes the latest Chinese EV maker struggling with money problems
Major shareholders Baidu and Geely might stop funding the development of the three-year-old startup.
Chinese electric vehicle startup Jiyue is laying off an unspecified number of employees to eliminate duplicate roles as part of a broader restructuring that “has been fully supported” by major shareholders, chief executive Joe Xia said in an email to staff sent on Wednesday.
The company, a joint venture between Chinese search engine giant Baidu and Volvo parent Geely, acknowledged it is searching for new funding, has temporarily suspended debt payments, and will delay some vehicle deliveries in a separate statement published on Chinese microblogging platform Weibo.
However, company sources told local media agency Jiemian that all of its workforce in the research and development team will be let go and test drives at showrooms will be suspended in order to review fixed asset management. Major shareholders Baidu and Geely might also stop funding the development of the three-year-old startup, the report said.
Jiyue reported deliveries of 2,485 cars last month, bringing its total delivery count for the year to just over 14,000 units. Baidu and Geely set up their original JV Jidu Auto in 2021, holding a 55% and 45% stake in the company, respectively, with another $400 million financing round following the next year. However, last August, Geely and Baidu set up a new joint venture with a new brand called Jiyue, in which they respectively hold 65% and 35% stakes, a move that allowed Baidu to outsource car manufacturing to Geely.
This was followed by the launch of the Jiyue 01, the brand’s first model, with a price range between RMB 249,900 and RMB 339,900 ($34,148-$46,446) last October. Jiyue announced an aggressive price cut by RMB 30,000 for the car a month later. In September, the brand unveiled its second model, the Jiyue 07, touting an intelligent driving experience similar to that of Tesla at a lower price tag.
Baidu and Geely’s joint brand is the latest Chinese electric vehicle maker to struggle with money problems, having been unable to lock in new investors while owing suppliers and vendors hundreds of thousands of RMB. Neta Auto, called Hozon in China, has recently faced lawsuits due to late payments and begun layoffs after finding it increasingly difficult to pay staff wages, according to local media reports.
Baidu did not respond to requests for comments. Geely declined to comment.
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