Ji Yue Auto, a joint venture by tech giant Baidu and auto manufacturer Geely, seems to be in deep trouble. 

Over the last 24 hours, the EV startup has suddenly shifted from being optimistic about the future to struggling to pay employees and suppliers. Rumours go that Baidu and Geely refused to continue to fund the company, which had raised billions of RMB from the parents. 

Ji Yue’s debacle happened very suddenly. Just in September this year, it launched Ji Yue 07, a much anticipated consumer sedan priced at RMB 199k. Employees, customers and partners thought the company was going down the right trajectory – and therefore shocked when the news came out. 

Ji Yue 07 – launched in September 2024 at RMB199k.  

CEO Xia Yiping showed up in the office yesterday (12 Dec) and was surrounded and interrogated by angry employees. Many chose to stream the session live on Douyin or Wechat, two video platforms in China.  

Xia Yiping negotiating with employees

Employees were angry because their social security had not been paid, and many had bought Ji Yue cars on credit. This uncertainty was unnerving. 

Some suppliers were stunned as well. One of Ji Yue’s advertising agents went on Douyin to issue a public video statement about the CNY37 million that Ji Yue still owes him. You can watch a clip of the video here. 

Deeply ingrained live ecosystem 

Probably the most dramatic was all the Ji Yue livestreaming hosts in different cities across China. One broke down in tears in the middle of a livestream “I worked so hard, and now the company is gone?” 

Others went free style in the live stream. Some were asking competitors whether they have jobs to offer; others started capturing traffic for their future livestreaming career. A few still diligently introduce the cars when prompted, but added warnings that customers who buy now might not have their cars delivered. 

Ji Yue alone has more than 300 live hosts in its stores across different cities in China. Some friends of Momentum Works noted – “now we really know how deeply ingrained livestreaming is in China’s consumer business ecosystem”. 

Baidu’s autonomous car dreams

Ji Yue was founded in 2021 as Jidu, a joint venture between Baidu (55%) and Geely (45%). At that time, Baidu had already made a firm commitment to build autonomous driving, but found it hard to convince other auto makers to test its software. Therefore, it went ahead and created Jidu. 

Baidu put a lot of enthusiasm and capital into the new venture. Robin Li, founder of Baidu, promoted Jidu across many occasions; and Baidu’s public disclosure showed that it had already poured RMB 8.8 billion (US$1.2 billion) into the new venture. 

Robin Li and Xia Yiping

Xia Yiping, the former CTO of Mobike who also had a stint in Food and Fiat-Chrysler, was invited to become the CEO of the new venture. Xia was a perfect fit, with experience in automobile, tech and entrepreneurship. 

Xia Yiping and Nio founder William Li, who was formerly Chairman of MoBike 

However, in August 2023, Jidu still couldn’t secure a licence to manufacture cars. To get its models to market quickly, Jidu restructured as Ji Yue, borrowing the licence of its parent Geely. 

However, Baidu seems to have lost its enthusiasm for carmaking, just as it did for food delivery and global expansion in the last decade. A few people told media outlets in China that Baidu had gradually transitioned its positioning from a supporting shareholder to a technology provider. 

Geely, on the other hand, has other subsidiaries and JVs including Lynk, ZEEKR, Volvo etc., would probably not put too much emphasis on Ji Yue. Founder of Geely just issued a manifesto in September to consolidate its EV assets to ‘strategically focus’. 

There are also rumours that the shareholders accuse the CEO for mismanagement, while the CEO complains that Baidu, with its 80% voting rights, is really at the heart of every decision. 

In either case, Ji Yue has fallen behind in the cutthroat race of EV manufacturers in China. According to statistics released, Ji Yue sold a total of 2485 cars in November 2024, while Li Auto sold 20 times as much – 48,740 vehicles. Market leader BYD sold more than half a million cars during the same month. 

Even though customers generally give very positive reviews of Ji Yue cars, to survive and eventually become sustainable, Ji Yue would need to invest much more money. 

Baidu and Geely apparently decided they were not willing to put in that money. Perhaps under public pressure, they would put in some cash to pay off the employees. Perhaps they would still restructure the company under a new management. 

Experts said that Ji Yue car owners would probably not need to worry so much – since so many of the cars’ components are shared across Geely brands, Geely ecosystem could easily take over the servicing. 

If they are willing to.