In-Depth: Who Abandoned Ji Yue Auto (AI Translation)

【周刊提前读】深度：谁放弃了极越汽车

Jiyue Auto, a company backed by Baidu and Geely, unexpectedly ceased operations, leaving employees and stakeholders shocked. The announcement was a sudden decision conveyed by CEO Xia Yiping, leading to a dissolution plan offering limited severance options.[para. 3] The company's collapse sent ripples of concern throughout the automotive industry, raising questions about its abrupt downfall despite its strong backing. [para. 3]

Jiyue Auto's story began in March 2021 when its predecessor, Jidu Auto, was launched with Baidu and Geely holding significant stakes. Baidu’s founder, Robin Li, initiated the company to advance autonomous driving technology. Jiyue Auto faced early hurdles, primarily due to a "license crisis," as the company lacked manufacturing qualifications. Baidu, not fully investing its funds, relied on Geely's intervention, which led to a delayed brand rebranding from Jidu to Jiyue. [para. 3]

Baidu shifted its focus away from car manufacturing toward artificial intelligence, which impacted its involvement in Jiyue. [para. 3] By 2023, Baidu prioritized AI over intelligent driving, prompting major executive departures within Jiyue. The financial status of Jiyue further weakened in 2024, with pressure mounting on Xia Yiping to expedite fundraising. Despite Baidu's declining interest, Xia remained optimistic about continued support. [para. 3]

The financial strains became evident by late 2024, as credit loans were not renewed, leading to a cash flow crisis. Additionally, accumulated losses grew sharply to almost 7 billion yuan, burdening the company with various debts. Employees sought clarity on pending compensations, which Baidu and Geely eventually agreed to settle after negotiations. The loss of executive resources and a failing sales strategy compounded Jiyue's struggles, marking a downward spiral. [para. 3]

Jiyue’s strategic failures in product launches and investments brought its demise. Despite attempting to innovate with their car models, consumer market acceptance was tepid. The company's branding efforts were further thwarted by frequent organizational changes and misaligned sales strategies, evidenced by chaotic price reductions. [para. 3] The sudden market changes in 2024 threatened the sustainability of even leading car brands, pushing industry players to consolidate. [para. 3]

Baidu’s reduced commitment was a setback for Jiyue, highlighting the tech giant's strategic refocus on areas like AI language models and cloud services, while stepping back from automotive ambitions. [para. 3] Geely, though initially a significant partner, retracted its involvement, leading to an ineffective partnership. Their strategic pivot aimed at brand consolidation did not prioritize Jiyue, resulting in a lack of support as the company grappled with financial challenges. [para. 3]

Geely’s restructuring through a strategic transformation plan, spearheaded by Li Shufu, epitomized a shift toward strategic consolidation. The intense competition within the automotive market prompted Geely's decision for operational efficiency and brand clarity. [para. 3] Overcapacity and ferocious cost competition, compounded with retail growth bolstered by incentives, emphasized the tough landscape for new brands like Jiyue. [para. 3]

This challenging environment, amid reduced subsidies and aggressive price wars, highlighted a broader market contraction, affecting sales and investments globally. Jiyue's collapse is a testament to the fragile balance within the current automotive industry, emphasizing survival challenges ahead. The narrative of Jiyue’s failure underlines the necessity for strategic adaptability amidst industry transformations. [para. 3]