Recently, China’s electric vehicle company Jueyue, jointly created by Baidu and Geely, suddenly faced a crisis. After WM Motor, GAC New Energy and NIO, Jueyue became the fourth “new force in car-making” to encounter operational difficulties.
An employee of Jueyue recently released a video revealing that negotiations between employees and the company failed. She stated, “They are dragging us, dragging us until everyone forgets about this issue because they have too many means.” She described their current situation as akin to migrant workers who cannot collect their pay, or laid-off workers who do not receive compensation.
On December 12, after the news of Jueyue Motors “dissolving in place” spread, the CEO, Xia Yiping, was surrounded by employee representatives at the company’s headquarters for 72 hours. The demands of these employees in negotiation with Jueyue include compensation for all employees except those in the third phase, back payment of social security, and compensation for the third phase employees, in addition to maternity benefits and medical insurance cash.
On December 17, an employee of Jueyue Motors released a video stating, “The latest outcome is out, our negotiations failed.” She expressed frustration that neither Geely nor Baidu, nor Jueyue nor Xia Yiping, take responsibility for the employees, with no one willing to cover their salaries, social security, or rightful compensation.
The employee said, “They are just dragging us, dragging, dragging, until everyone forgets about this issue. They usually speak eloquently, saying they will assist us. But on one hand, they use public opinion against us, saying we have resumed production, blaming employees for the plant closure, assuring vehicle owners’ rights to ease their worries.”
“With over ten thousand car owners, four thousand employees, totaling almost twenty thousand people affected by this issue, if a matter of this scale involving such a large group of people is left unresolved, I believe no one will invest in new forces or new energy electric vehicles in the future.”
“I’m so angry! Because they have too many means, and they keep heating up the situation, but the intensity is decreasing.”
In reality, the Jueyue employees who were laid off two months ago still have not received compensation. Currently, including outsourced positions, the total number of staff at Jueyue is about 5000, making severance pay a significant expense.
Reportedly, Jueyue’s public relations service partner did not receive the cooperative payment from the listing of Jueyue 07 in September this year.
Additionally, across the country, over 100 Jueyue stores have been forced to close in the past two days due to the inability to continue paying rent and property fees, accounting for approximately 80% of operating outlets.
On December 15, according to a report from Tencent Auto “Far Beam”, a source close to the Jueyue senior management revealed that by the summer of 2024, Jueyue’s accumulated losses exceeded ten billion yuan.
Interface News cited an insider who disclosed that in a recent round of asset inventory, Jueyue discovered a funding gap of up to six billion. For a car-making new force company that has not achieved positive operational circulation and can only rely on capital injections, this funding gap is too substantial.
After rumors of large-scale layoffs, executive departures, and dissolution surfaced, on December 11, Jueyue CEO Xia Yiping held an internal meeting through video conference. He acknowledged the difficulties faced by Jueyue and proposed four cost-reducing and efficiency-improving reform measures, claiming that “these decisions have the full support of shareholders.”
During this internal communication, Jueyue made it clear that salary payments to employees only covered until November, starting from November the company was unable to pay social security, and there was uncertainty about December salaries. Employees were given the option of completing resignation procedures by December 16 or staying to weather the storm, with Jueyue unable to guarantee adequate severance payments. If employees chose to remain, the company could not pay their salaries.
Interface News noted that Jueyue is facing mounting debts and supply chain ruptures, making it increasingly difficult without continued financial support from its two major shareholders – Geely and Baidu.
On December 13, Geely and Baidu issued a joint statement regarding Jueyue Motors, stating that as shareholders, they will actively assist Jueyue management in handling related matters appropriately.
However, Interface News believes that the two major shareholders of Jueyue are not willing to provide further support at the financial level. Geely Holdings entered a new stage of strategic transformation after the release of the “Taizhou Declaration” in September this year. Not only Jueyue but even Geely’s own electric vehicle brand Geometry is almost neglected.
In the early hours of December 16, Jueyue CEO Xia Yiping posted a long message on his social media, first emphasizing that he did not flee. He expressed gratitude for the support from Baidu and Geely but admitted to making many mistakes as a CEO and apologized to employees, car owners, suppliers, and shareholders.
According to “Financial World Auto” on December 17, an early employee of Jueyue Motors revealed in an interview that Xia Yiping, as the CEO, lacks experience in corporate operation and management, laying the groundwork for a series of problems for Jueyue Motors.
Another mid-level employee of Jueyue recently exposed more issues present in Xia Yiping’s daily management of the company in an interview with “Far Beam”.
As per the employee, Xia Yiping organized many hotpot gatherings for car owners recently, each costing over 500,000 RMB. “As a startup company, expenditures should be strictly controlled, but in reality, he bought from suppliers unchecked due to the lack of compliance and internal audit supervision.”
It was revealed that Xia Yiping had a dedicated team to manage his personal CEO account, using company resources to create the account, costing a considerable amount of money. One live stream testing Jueyue’s visual capabilities for autonomous driving had an expenditure of seven to eight million. Regarding email responses to suppliers, Xia Yiping never inquired about quality but only asked about the origins of the supplier.
An internal Jueyue staff member told “Daily Economic News,” “In fact, many leaders in our company come from other industries and do not understand car-making. The CEO does get involved in everything personally.”