【Epoch Times News December 16, 2024】 An informed source recently revealed that the extreme deficit of Evolve Motors has exceeded 10 billion RMB over the past three years. Evolve Motors announced the dissolution of the original team not long ago, leaving only around 100 operational maintenance personnel. The social security, public reserve fund, and severance compensation for over 5,000 employees remain uncertain.
According to a report from Tencent Auto “High Beam” on December 15, an insider close to the senior management of Evolve Motors revealed that by the summer of 2024, the accumulated losses of Evolve had exceeded 10 billion RMB. Although several media outlets reported a deficit of only “empty” 7 billion RMB on Evolve’s books.
In another report by “High Beam,” it described the collapse of Evolve Motors as rapid and undignified. On the afternoon of December 11, CEO Xia Yiping of Evolve Motors held an all-staff meeting and announced the initiation of “Entrepreneurship 2.0” stage, mentioning that the company was unable to pay the social security for November. A few hours later, the team announced its dissolution, retaining only around 100 operational maintenance personnel, while the social security, public reserve fund, and severance compensation for over 5,000 employees were left in limbo.
“High Beam” analysis suggested that the sudden collapse of Evolve Motors has ties to Baidu. Evolve Motors, a start-up company in the automotive industry co-invested by Baidu Holdings and Geely Holdings, has seen investments of about 5 billion RMB from Baidu and 3 billion RMB from Geely since its establishment in 2021. Baidu has always been the major shareholder behind the scenes, holding 80% of the voting rights.
In July of this year, Baidu Chairman Robin Li and Geely Chairman Li Shufu had a meeting in Beijing regarding Evolve Motors. According to reports, Baidu pledged to invest 3 billion RMB in Evolve but requested Evolve to return it under the guise of purchasing intelligent solutions (such as intelligent driving, intelligent cockpit, and large models) in the next three years. By September of this year, this investment had entered detailed confirmation of terms.
On December 14, an insider close to the top management of Evolve revealed that in June and July of this year, Baidu conducted several rounds of due diligence on Evolve, but the “amount was never loosened,” and discussions on investment matters “couldn’t proceed halfway.” Moreover, it was discovered that the intelligent driving and intelligent cockpit business couldn’t fulfill the 3 billion RMB related transactions. Geely had expressed support but “only in small amounts, the sum won’t be too large.”
A senior executive at Evolve mentioned that during this investment round, Baidu attempted to persuade Geely to participate, but “later, Geely was also adjusting and shrinking internally, possibly declining this suggestion.”
Currently, Evolve has around 5,000 employees, including about 3,000 in the vehicle team and around 2,000 in the sales team. More specifically, in the vehicle team, there are about 500 in vehicle engineering, including electronics, decorations, validations, etc.; about 290 in an intelligent cockpit, around 150 in intelligent driving, about 400 in car networking, about 500 in user operations, 200 in strategic planning, 150 in the supply chain (procurement, quality, etc.), and 100 in the design department. The remaining 300+ individuals are in finance, legal, HR, public affairs, auditing, and other departments. This model has the advantage of reducing reliance on Geely’s platform, but a downside is substantial cash burning. With the awaited “lifeline funds” not materializing, Evolve began to lose control until the team’s dissolution announcement on December 11.
On December 14, multiple Evolve employees informed Time Finance that on the night of the 13th, employee representatives negotiated with Xia Yiping until past 10 PM; Xia Yiping committed to responding to employee demands by the 14th evening. The employee demands were clear, including compensation for all employees excluding Phase 3, social security back payments, and Phase 3 employees needing to pay double for 2N plus maternity allowance and medical insurance discount.
At 11 PM on December 14, an employee informed Time Finance that the latest update was the specialized work group was still discussing the detailed plan. Based on the current progress, a real solution is still in the works.
On December 13, Geely and Baidu issued a joint statement about Evolve Motors, where they, as shareholders, vowed to assist the management properly handle related matters: settling employee social security payments, compensation for departing employees, maintaining regular use of user vehicles, after-sales service, and maintenance; promoting reasonable and legal solutions for other matters.
Public records show that Evolve was created by a collaboration between Baidu and Geely Holdings Group to establish a high-end intelligent automotive robotics brand. The company’s precursor was “Jiyu” and was founded in March 2021.
On August 14, 2023, “Evolve” was officially announced, and the first model was named “Evolve 01.” On October 27, Evolve 01 was officially launched, with the second mass-produced model officially named “Evolve 07” and released in September 2024.
Following the news of Evolve’s losses and collapse, nearly a thousand netizens expressed their opinions.
Netizen “Kalawa” was puzzled, saying: “How can an assembly car lose money? They don’t even have a factory themselves, it’s all outsourced assembly. Where did this money go?”
“Empty” believes that “Evolve’s failure stems from its strategy: aiming too high, ambitious but lacking in competence. In tactics: haphazard competition. Redundant production capacity. How would it not result in failure?”
“Lost Wanderer in the Dust” thinks, “In the upcoming years, many new energy vehicles will collapse, reshaping the industry. Just like the early days of smartphones, previous brands like Motorola, Gionee, Ericsson, Tianyu, ShouXin, XiaXin…all disappeared.”
[End of News Report]