Massive losses, near-zero sales, and a grand dream to become top three electric car makers by 2025.
By HOU Zhuokai
On August 6, after two years of dead silence, Yudo’s newly-minted CEO along with a squad of bright shiny executives still in their wrappers lined up for their first high-profile public appearance and declared all was well.
“I am very proud to announce that Yudo is coming back to the arena,” preened Lin Mi, the man at the wheel.
The electric vehicle (EV) maker relaunched itself at a luxury hotel in the coastal city of Xiamen with the unveiling of the marvelously originally titled “Second Five-Year Plan,” to the accompaniment of some stunning PowerPoint presentations.
The company promised a completely new, independently developed power train, smart driving solutions, and an “all-cloud" service system.
“I believe that by 2025, Yudo will be one of China's top three electric car manufacturers and eventually a leading provider of smart driving solutions,” Lin insisted.
Lin is a familiar face in the electric vehicle industry. He started in Denza, a joint operation between BYD and Mercedes and worked for Yudo briefly in 2016 when it started up. He had short stints in Iconio Motors and Bordrin. Both were self-proclaimed Tesla wannabes. Both are now bust.
He is rumored to have been one of the very few who managed to make any money at Bordrin, with bonuses and other incentives on top of a basic monthly salary of 200,000 yuan (US$30,000). He seems to have taken the money and ran, or at least laid low, because nothing was seen of him for quite some time until he reanimated himself as the savior of Yudo.
Comebacks were the main theme of Lin’s two-hour monologue at the relaunch. Before “brand reincarnation” with “groundbreaking technologies,” Lin faces the formidable task of putting the brakes on Yudo's runaway descent down the road to financial ruin.
Founded in December 2015 and backed by state-owned companies and local governments, since 2017, Yudo has been losing massive amounts: 180 million yuan in 2019 alone. More than 80 cases have been filed against the company this year. In March, a court froze 17 million yuan of Yudo’s assets to meet unpaid bills. Further stretching Yudo’s creditworthiness, another 38 million yuan loan, provided by one of its shareholders as emergency funding in January 2019, is due by the end of this year.
A company spokesperson told Jiemian News that it had been a "difficult" year for young and less-established electric vehicle manufacturers, and that profit from new car sales had been "limited,” while insisting operations were “largely manageable.”
Behind the dismal financials lie dismal sales. Yudo’s state-backed status gave it a head start in the bureaucratic nightmare that afflicts less well-connected EV makers. The trouble was, no one wanted a Yudoo. Total sales of the Yudo π1 and π3, then seen as solid offerings, were less than 8,000 in 2018. In 2019, somehow the company managed to shift only 2,500 of them. With no more subsidies for electric vehicles, Yudo urgently needs to come up with something amazing. And something people have a lot fewer complaints about.
The battery is unreliable, the control system erratic and post-sales service more or less nonexistent. And not just a money pit, your new Yudo could turn out to be a death trap! The Yudo π3 received the lowest possible safety assessment, and an investigation into cases of spontaneous combustion has failed to produce any results.
With sales and image down the drain, Yudo is limping along. According to an internal document, the company suspended many employee benefits in June 2019, if not before. Before anyone had even heard of COVID-19, Yudo adopted the revolutionary human resources policy of either furloughing employees in all departments or forcing them to work part-time for reduced pay.
With 400 cars sold this year, there is not much further for Yudo to sink. The relaunch was offered as a sop to impatient investors and to revive whatever confidence may be lurking in some unexplored corner of the market. The presentations were stuffed with EV geekspeak and internet economy buzzwords, but not much more. Fu Zhenxing, chief of technology, laid out his "vision" of a pioneering power system that uses a next-generation lithium-sulfur battery, a motor whose power density exceeds global industry standards by 25 percent, and a highly effective vehicle control system equipped with cutting-edge silicon-carbide power components, all of which are "underdevelopment" and expected to be "mass-produced in the near future." No mention was made of dragons, unicorns, or other mythical beasts.
Lin's fancy power system will be complemented with a “modularized and platformed” operating system that will help Yudo diversify its product lines and eventually build an all-encompassing and self-sustaining ecosystem: a very commendable set of ideas.
The company has failed to deliver on at least four models scheduled for 2018, 2019 and the middle of this year. Except for another upgrade for the π1 and π3 this year, there isn't much meat on the bare bones of Yudo’s plans. And given Yudo's track record of abject failure in the face of lofty promises, it's hard to see who might put more money the company's way, or why.
In 2019, Yudo announced a partnership with FAW, a state-owned car manufacturer, to develop a new vehicle, as well as explore opportunities in ride-sharing, autonomous driving, intelligent logistics, and supply chain finance. The stated goal was to synergize manufacturing resources and Yudo's technological advantages, but it is hard to specify what exactly those advantages are, and to this day, little material progress has been made.
The electric vehicle industry has no shortage of visionaries and messiahs. Just a few days ago, Faraday Futures, a start-up with renegade plans to shake up the EV market, offered a few prototypes for sale through auction. In China, Jia Yueting, the billionaire founder of a start-up darling LeEco, dreams of building an empire that challenges Netflix, Apple, and most importantly, Tesla, all at the same time. These endeavors have thus far fallen slightly flat. Faraday Futures has yet to produce a car after five years of fanfares and trash talk. Jia Yueting, vanished from the public domain, cowering perhaps, behind his mountain of debt. With these precedents, the smart money is not exactly racing to sign up for the Yudo dream.
By 2019, Yudo was supposed to have built a new energy vehicle industry cluster in Fujian and launched 3 new models. On its website, the company appears devoted to pure electric vehicles, and promises a “[cloud-based] power system, [cloud-based] chassis platform, and [cloud based] connected intelligence platform."
Yudo may be completely useless at building vehicles on the ground, but castles in the clouds are well within Lin's reach.
