(ECNS) — Ji Yue, a Chinese electric vehicle startup backed by Baidu and Geely, is on the brink of collapse, according to Chinese media outlet Jiemian.
Once touted as a challenger to Tesla, the company has struggled with low monthly sales and mounting financial woes, pushing it into a full-blown crisis.
On Wednesday, Ji Yue CEO Xia Yiping issued an internal memo admitting that the company faced severe difficulties and required immediate restructuring. His proposed measures included consolidating redundant departments, cutting projects with poor financial prospects, and significantly downsizing the workforce.
Jiemian reported employees saying that while November salaries have been paid, the company has ceased contributions to social security and other benefits for November and December, leaving staff to cover the costs themselves. Most of Ji Yue’s operations have now ground to a halt, with company-wide communication channels silenced.
The company plans to retain only a skeleton staff to maintain basic operations. Other employees have been given two options: leave and receive an “N+1” severance by February 2025, or remain, knowing that December salaries will not be paid, effectively working at their own expense.
Insiders report that Ji Yue’s R&D department will be completely dismantled in the layoffs, according to Jiemian. Out of its 5,000-strong workforce, including full-time and outsourced staff, only a fraction will remain. In the after-sales department, for instance, just 80 of its 300 employees are expected to stay. Retail operations have also been halted, with showrooms ceasing sales and locking away test-drive vehicles. Meanwhile, the company has begun inventory checks and vehicle recalls, prompting some employees to consider legal action.
In a late-night statement, Ji Yue said it is actively seeking new funding. The company assured that vehicle services, including maintenance appointments, continue as usual, but admitted that supply chain disruptions might delay deliveries.
It also noted ongoing financial adjustments to address overdue payments to suppliers.
On Thursday morning, Ji Yue CEO was surrounded by employees at the company’s headquarters in a tense confrontation that was partially live-streamed by staff. Employees voiced grievances over unpaid wages and benefits, presenting a series of demands aimed at addressing their concerns.
Ji Yue, originally launched as Ji Du Auto in 2021, aimed to revolutionize smart EVs. Baidu held a 55 percent stake, focusing on technology and design, while Geely owned 45 percent and managed production. However, regulatory challenges over production qualifications forced a restructuring in mid-2023, shifting the ownership balance to 65 percent for Geely and 35 percent for Baidu under a new joint entity.
Sales figures reveal the company’s struggles. Ji Yue delivered just 14,000 vehicles in the first 11 months of 2024—an average of less than 1,300 per month. November sales reached 2,485 units, but insiders suggest that many were sold to leasing companies rather than individual customers.
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