Original Source: BCC Global
Date: December 18, 2024
Introduction
Once regarded as a pioneer in “New Energy + Smart Driving,” Jiyue Auto has recently become embroiled in dissolution rumors. Its journey from a highly anticipated launch to a quiet exit serves as a warning for the electric vehicle (EV) industry.
Background: A “Star Enterprise” Backed by Giants
Founded as a joint venture between Baidu and Geely, Jiyue Auto garnered significant attention from the start. Originally named “Jidu Auto,” the brand’s name was derived from the idea of “gathering wisdom for futuristic technology.” The company was built on Baidu’s AI and autonomous driving expertise and Geely’s automotive manufacturing capabilities, making it a “chosen one” in the industry.
The concept of “crossover car manufacturing” is not new in the smart EV market. Companies like Huawei, Xiaomi, and Didi also entered the arena, seeking a share of the trillion-dollar market. Compared to these new players, Jiyue had the advantage of Baidu’s AI technology and Geely’s production strength, giving it a head start.
Key strengths behind Jiyue’s ambitious entry:
- Baidu’s AI and autonomous driving technology: Baidu’s Apollo system was a key asset, and Jiyue was intended to be its flagship commercial platform.
- Geely’s manufacturing capabilities and supply chain: As one of China’s leading automakers, Geely’s production capacity, supply chain bargaining power, and industry resources were solid foundations.
However, despite its strong start, the outcome was disappointing. In 2023, Jidu Auto rebranded to Jiyue Auto and released its first model, the Jiyue 01, but the market reception was lukewarm.
Development Timeline: From Grand Entrance to Quiet Exit
Launch of the Jiyue 01 Model
In 2023, Jiyue launched its first mass-produced model, the Jiyue 01, positioned as a “smart SUV” in the mid-to-high-end market. The company emphasized its Level 3 autonomous driving capabilities powered by Baidu’s Apollo system, claiming a competitive edge over peers.
However, the market response fell short of expectations.
- Pricing Challenges: With a launch price of around CNY 300,000 (USD 41,200), the Jiyue 01 failed to stand out in terms of price or technology compared to offerings from NIO, Xpeng, and other leading brands.
- Sales Disappointment: The cumulative sales of Jiyue 01 reached only 13,000 units, significantly lower than the company’s target.
- User Feedback Issues: Reports from users highlighted poor driving experience and an underwhelming in-car system. These issues led to a rise in vehicle returns, damaging the brand’s reputation.
Jiyue’s “high-profile launch but low follow-through” resulted in slow growth and mounting financial strain, eventually causing a break in its funding chain—the key factor leading to its dissolution.
Reasons for Dissolution: A “Resonant Effect” of Mismanagement, Financial Pressure, and Market Failure
By 2023, the capital market environment had shifted dramatically. Established EV brands like NIO, Xpeng, and Li Auto had cemented their positions, while investor interest in second-tier startups waned.
Jiyue Auto struggled to secure Series B funding after its initial Series A round, reportedly facing a CNY 7 billion (USD 960 million) funding gap—enough to deter even Baidu and Geely.
- Baidu’s Reluctance: After conducting due diligence, Baidu declined to inject additional funds into Jiyue.
- Geely’s Shift in Focus: Geely redirected its resources to its other brands, Geometry and Zeekr, leaving Jiyue without crucial backing.
Industry Impact: Collective Anxiety Among New Energy Car Makers
Jiyue’s dissolution signifies that the “age of new entrants in EV manufacturing” is entering a phase of elimination. The early “battle of a hundred EV brands” has evolved into a “giants’ game,” where survival depends on deep financial and technological resources.
Similar startups face survival crises as “PPT (PowerPoint) car companies” are weeded out by the market, and investor patience wanes.
Jiyue’s downfall is not just the fate of an individual company—it represents the inevitable consolidation of the EV sector, where only a few will emerge victorious. The failure underscores that the “cash-burning game” is over; companies now need strong capital chains, sound market strategies, and competitive products to thrive.
Future Outlook: A Survival Game of Pragmatism and Market Adaptation
The remaining players in the new energy car market can no longer rely solely on high-profile marketing and hype. Instead, pragmatic management and market resilience will be crucial for survival and growth in this prolonged competition. Jiyue Auto’s story serves as a sobering reminder that sustainable success in the EV industry requires more than ambitious branding—it demands solid execution, consistent product performance, and financial stability.
[Disclaimer]: The content above represents a summary of publicly available information, expert opinions, and BCC research. It does not constitute investment advice. BCC assumes no liability for any losses resulting from the use of this information. Investors should exercise caution.