by Yang Shihan, Zhou Shuqi, Liu Jiaxin Jiyue Auto, the Chinese EV maker backed by s
From right to left: Xia Yiping, CEO of Jiyue, Robin Li, Chairman of Baidu, and Frank, Head of Jiyue
by Yang Shihan, Zhou Shuqi, Liu Jiaxin
Jiyue Auto, the Chinese EV maker backed by search engine giant Baidu and automaking powerhouse Geely, collapsed overnight. Rumors of mass layoffs had been quietly circulating for weeks, but few anticipated the dramatic unraveling that ensued.
On December 11, employees received an internal memo vaguely alluding to "financial strains" and a forthcoming "new entrepreneurial phase." Confusion quickly turned to shock as the HR department clarified: the company was shutting down entirely. For many employees, this downfall was a bitter pill to swallow. Drawn by the industrial might and deep pockets of Baidu and Geely, they had been riding a wave of optimism. Jiyue’s monthly sales had climbed steadily over the past six months, nearly breaking into the thousands—a meteoric rise that inspired belief in a brighter future.
The speed of Jiyue’s ascent had created a sense of inevitability among its workforce. Employees worked tirelessly, bolstered by internal projections and industry speculation that the company’s innovative approach to autonomous driving could disrupt the EV market. Baidu’s Apollo system, hailed as a cornerstone of its AI ambitions, promised to revolutionize car operations, while Geely’s manufacturing expertise suggested scalability to compete with established players like Tesla and emerging giants such as NIO and XPeng.
But just as insiders believed they were on the brink of "changing their destiny," Baidu abruptly reversed its commitment. According to Zhu Kai, general manager of auto marketing service agency Land Roads, Baidu had promised to inject 1 billion yuan (US$137 million) by the end of November to cover loans and restart production. That lifeline never arrived.
From its inception, Jiyue was tightly controlled by Baidu. Established in 2021 as Jidu Auto, the venture was split 55percent to Baidu and 45percent to Geely. Baidu oversaw product definition and technology, while Geely managed manufacturing. Despite Baidu’s "super voting rights" and later majority control of over 80 percent, insiders argued its oversight was insufficient and slow to address leadership challenges.
Regulatory hurdles in 2022 forced structural changes. To comply with China’s "dual qualification" rule, Jiyue transitioned to a new ownership structure—65 percent Geely and 35 percent Baidu—while spinning off Jidu as a supplier of advanced vehicle solutions. Yet, operational control and board composition remained firmly in Baidu’s hands. Meanwhile, Geely prioritized its own EV brand, Zeekr, leaving Jiyue struggling for support.
By late 2023, Jiyue owed 7 billion yuan, including 6 billion in bank loans and half a billion to Geely. Suppliers, initially willing to extend payment terms, began withholding shipments as faith in the company eroded.
Xia Yiping, a former Ford executive and co-founder of Mobike, was appointed Jiyue’s CEO in December 2020. Leading the company marked Xia’s first attempt at comprehensive management, a task fraught with complexities. Integrating Baidu’s Apollo autonomous driving technology with Geely’s manufacturing posed significant challenges, compounded by conflicting priorities between the two stakeholders.
Under Xia’s leadership, Jiyue attempted to position itself as an industry disruptor. The company’s avant-garde designs—dubbed "car robots"—featured unconventional technologies such as semi-steering wheels, unique displays, and doorless handles. While innovative, these features inflated production costs and alienated mainstream buyers who valued simplicity and affordability.
Baidu’s enthusiasm waned. Once championed by Chairman Robin Li as a crown jewel of Baidu’s AI ambitions, Jiyue became marginalized by 2023 as Baidu shifted focus to large language models and AI investments. Baidu’s contributions to Jiyue’s smart driving systems also proved problematic. Technologies like automated parking and integrated driving were delivered as "black boxes," offering little transparency or customization. Bug fixes required lengthy escalations, delaying updates by weeks. Collaboration faltered, leading to the disbandment of Jiyue’s smart driving team and a mass engineer exodus.
Jiyue’s market struggles became more apparent with the launch of its second model, the Jiyue 07. By then, the domestic EV market had evolved, with competitors introducing sub-brands targeting lower-tier markets with mature technologies at better value. Jiyue’s steep price cuts and promotions failed to gain traction, highlighting its struggles.
The company’s limited retail footprint further hindered its growth. While competitors like XPeng operated over 600 stores, Jiyue struggled to scale beyond its planned 250 outlets. This lack of infrastructure made converting consumer interest into sales an uphill battle.
Jiyue’s collapse reflects a broader tension in China’s hyper-competitive EV market. While its technological ambitions captured headlines, operational inefficiencies, wavering shareholder support, and mismatched market strategies proved fatal. Baidu invested just 5-6 billion yuan into Jiyue, a fraction of what other tech giants like Xiaomi committed to their automotive projects. Meanwhile, Geely’s focus on Zeekr exacerbated Jiyue’s challenges.
As Baidu and Geely navigate the fallout, insiders suggest Baidu is unlikely to continue supporting Jiyue. “If they keep pouring money into it, Baidu’s own investors are bound to raise objections,” remarked one source.
The failure of Jiyue Auto serves as a cautionary tale. Tech giants entering the automotive sector must recognize that lofty slogans and initial enthusiasm are not enough. Without unwavering commitment, substantial investment, and a clear strategy, even the most ambitious ventures can end up as nothing more than a footnote in industry history.
