Introduction

Jiyue Automobile is facing severe challenges.

Yesterday, half of Weibo's trending topics revolved around Jiyue Automobile, marking a rare moment of intense activity within the automotive industry, akin to the buzz surrounding Xiaomi's SU7 launch. However, this was not due to a groundbreaking product but rather because Jiyue Automobile had 'imploded'.

On the morning of December 12, hundreds of employees descended on Jiyue Automobile's headquarters to engage in a direct dialogue with CEO Xia Yiping. Emotional and agitated, they demanded salaries and social security contributions from Xia, fearing he might flee with their funds and shouting, 'Use your own savings to pay our social security!'

In response, Xia Yiping stated, 'I have been striving to resolve this issue up until the last possible moment.' Nevertheless, the employees remained unsatisfied and demanded that Xia hand over his passport, leading to a situation where escape seemed impossible.

Through the photographer's lens, a slogan on the background wall during Xia Yiping's speech is visible: 'In the history of intelligent automobiles in China, the name of every Jiyue person will surely be remembered.' Amidst rumors of Jiyue's collapse and employees demanding salaries, this slogan appears particularly ironic.

In response to online reports and information leaked by insiders at Jiyue, an editor from Autocar Community also visited Jiyue Automobile's headquarters at 1688 Yecheng Road, Jiading District, in the afternoon of the same day.

The winter evening was bitterly cold, yet there was nothing unusual outside Jiyue's headquarters. An elderly man by the security booth smoked leisurely, and the internal parking lot was still filled with cars, with lights on in the office building. A few trees swayed violently in the wind, their branches seemingly lashing out at the Jiyue logo behind them. An employee shared, 'Mr. Xia hasn't left yet. Suppliers are also here, and shareholder representatives are said to arrive tonight. Everyone is still negotiating solutions...'

Regardless of the final negotiation outcome, tonight will be sleepless for Xia Yiping, suppliers, shareholder representatives, and Jiyue employees. Those who have already purchased Jiyue 01 and Jiyue 07 may also momentarily regret their decision.

With Jiyue's crisis, they won't have a good New Year.

At noon on the 12th, Jiyue employee Xiao A posted on social media, 'Joined Jiyue three months ago, and now it's disbanded.' She mentioned that the company hadn't paid medical insurance in October, social security and provident fund in November, and salaries for December, with N+1 compensation seemingly out of reach.

While posting this message, Xiao A and a group of Jiyue employees were blocking the entrance to the company meeting room, awaiting the 'solution to be presented at 2 PM' as promised by the CEO. Meanwhile, Xiao A also began job hunting, inquiring if any automotive companies were hiring designers.

Many Jiyue employees, like Xiao A, face unemployment and discontinued provident fund contributions. With the New Year approaching, finding a desirable job immediately is difficult. In her words, 'This year won't be good.'

What caused Jiyue employees to have a 'bad year' was a video conference initiated by Xia Yiping on December 11, addressing all employees. The core content of this communication was the need for internal adjustments, with Xia stating that Jiyue would enter the '2.0 stage of entrepreneurship'.

Subsequently, in an internal letter released that day, Jiyue offered employees two layoff solutions. The first was severance pay of N+1, but without a clear payment date, and previously laid-off employees' compensation would also be delayed. The second option was to stay but with suspended salaries and discontinued social security contributions.

Many employees expressed dissatisfaction with this approach, leading them to surround the CEO on the 12th to demand an explanation.

Not only are employees worried, but Jiyue dealers are also facing difficulties. Some salespersons mentioned not being paid salaries or having social security contributions made... And on the evening of the 11th, a female live streamer from Jiyue Automobile who was streaming just moments ago was suddenly notified that the company was disbanded on the spot. Upon hearing this news, the streamer was so shocked that she burst into tears.

However, on the 12th, Jiyue experience stores across the country engaged in live streaming. Interestingly, most of them saw significantly higher traffic than usual, as if enjoying a 'final meal' – the best and last one.

Additionally, Supplier B complained to Autocar Community, 'Seeing Jiyue in crisis, I feel like the sky is falling.' According to the supplier, it was already difficult to get money from Jiyue. Previous projects had yet to be paid, and now with the crisis, there is even less hope. Meanwhile, on the 12th, a supplier issued a statement revealing that Jiyue owed 37 million yuan.

Jiyue's crisis has also scared many users.

My friend Xiao C bought a Jiyue 07 a month ago. When the new car was launched, Xiao C was attracted by its appearance, affordable price, and advertisements for intelligent driving, so he decided to make the purchase. Yesterday afternoon, my friend sent a video complaining, 'Jiyue is collapsing. Can I still drive my Jiyue 07? Will it break down halfway?'

Those who have already bought the car are worried, and so are those who haven't received theirs. Many prospective car owners have posted related content on social media, expressing regret for being too naive when they were locked into a purchase by salespeople who then lowered prices before the company collapsed. Some said their salesperson had run away, leaving them with 'neither money nor car, panicking all around'.

When the dust of the times settles on each individual, it becomes a massive mountain. From employees to dealers, from suppliers to car owners, the rise and fall of an automotive company affect many in the industry chain, an outcome that many do not wish to see.

However, the automotive market is brutal. In this year's elimination round alone, new energy vehicle companies like HiPhi, WM Motor, and NIO have successively encountered crises, and even leading dealers are teetering on the brink of collapse amidst the market reshuffle. Jiyue Automobile is on the verge of collapse under these circumstances.

As we speak, it is already 11 PM on the 12th. An insider told me, 'The employee negotiation representatives were in negotiations for six hours, and last month's (November) social security contributions arrived within 25 minutes...'

With a financial hole of 7 billion yuan, is Baidu the 'lifesaver'?

Judging from Jiyue's response on the morning of the 12th, employees described it as 'like saying nothing, no solution to the problem.' The outcome of the new round of negotiations will likely be one of two scenarios: either delayed compensation or new funds injected into the company to continue operations. However, the former is more likely based on the current situation.

Reading this, one might wonder: How could a seemingly healthy company, a joint venture between Geely and Baidu, collapse overnight?

Yes, how could it suddenly collapse?

Jiyue can be considered a brand born with a silver spoon. As a product of the collaboration between Geely and Baidu, Jiyue Automobile has been established since early 2021, with Geely responsible for hardware technology and Baidu providing software support. Li Yanhong has personally promoted Jiyue on multiple occasions. However, due to issues like auto manufacturing qualifications, Geely gradually took control with a 65% stake in Jiyue, while Baidu retreated to the background.

This change in shareholding structure has placed Jiyue in a delicate position when seeking resources from both parties.

Previous reports have indicated that the sudden collapse of Jiyue is primarily due to insufficient support from shareholders. As the main investor, Baidu was not optimistic about Jiyue Automobile's profitability prospects and chose to cut losses in a timely manner. The largest shareholder, Geely, is primarily responsible for providing platforms and technology, charging for contract manufacturing. With the implementation of the 'Taizhou Declaration' and Geely's optimized structure, it is even less likely to invest in Jiyue.

At this point, Baidu's attitude, which has 'retreated to the background,' becomes even more crucial. If Baidu invests, Jiyue survives; if Baidu cuts off funding, Jiyue dies. On the 12th, Jiyue CEO Xia Yiping also sought support from Baidu, stating, 'Baidu holds 80% of the voting rights in Jiyue Automobile, but the shareholders have not provided support'.

However, there are also reports that Baidu's condition for not withdrawing investment is for Xia Yiping to step down as CEO. Baidu sent a financial team to conduct due diligence at Jiyue in October this year, preparing for a subsequent investment of 3 billion yuan. However, they discovered a mess of financial records with a hole of up to 7 billion yuan, leading to a decision to halt further investment.

In response, Xia Yiping denied this, saying, 'You can check the accounts.' The problem is that it was previously reported that Jiyue's Chief Financial Officer Liu Jining had gone missing and taken the company's account books with him. According to Liu Jining's latest IP location, he is likely in Singapore, making the 7 billion yuan financial hole an untraceable mess.

Although it is rumored internally that shareholder representatives will arrive at Jiyue's headquarters tonight to participate in further discussions, will Baidu take on Jiyue Automobile, which has reached this point?

In terms of sales, as of November 2024, Jiyue Automobile's cumulative sales have only reached 14,000 units. This sales level is insufficient to support a new energy vehicle company to survive in such a brutal environment. Coupled with a financial hole of 7 billion yuan and this way of 'making a name in the history of intelligent automobiles in China,' will Baidu still wade into this muddy water?

In the elimination round of the automotive market, Jiyue is not the first to be eliminated and will not be the last. However, when car manufacturing ultimately becomes a capital game, its original intention and product quality become irrelevant. As one Jiyue employee put it, 'In the end, it will only be disastrous for thousands of workers and tens of thousands of existing car owners.'

As I was writing this, I received a call from a friend asking what I was busy with. After telling him, he said, 'I'm sorry to hear about Jiyue Automobile for the first time when it's about to collapse.'