The encyclopedia · People & Management · Strategic decision · 2024
Jiyue Motors collapsed after its CEO bet Baidu would keep funding, leaving staff unpaid
Chinese EV startup Jiyue, backed by Baidu and Geely, abruptly collapsed in December 2024 after its CEO failed to secure new funding and banks cut credit.
Jiyue Motors · Jidu Auto · Shanghai Jidu Automotive · 2024-12
What happened
Jiyue Motors was a Chinese electric-vehicle startup created in 2021 as a partnership between Baidu, which supplied autonomous-driving and intelligent-cockpit technology, and Geely, which provided vehicle manufacturing. The brand launched its first model in 2023 and had about 140 stores across China by late 2024.
By mid-2024 the company was already short of cash. CEO Xia Yiping was urged by executives and Baidu representatives to raise new funding, but he remained optimistic that Baidu would continue injecting capital. When new funding did not arrive, banks refused to roll over roughly RMB 2 billion in unsecured credit lines in September-October 2024. Jiyue began cutting staff and scaling back operations.
On December 11, 2024, Xia told employees by video conference that the company had entered 'Entrepreneurship 2.0' and needed immediate restructuring. The firm failed to pay November social insurance for staff and offered workers a choice of voluntary resignation with delayed N+1 compensation or remaining unpaid. Baidu and Geely later issued a joint statement promising to resolve employee social-insurance payments and customer after-sales service.
Why it happened
- The CEO treated Baidu's continued funding as a certainty rather than a negotiation, leaving no credible plan B
- The company had built a nationwide retail network and workforce before proving it could sell at scale
- Monthly deliveries remained far below the roughly 10,000-unit threshold that Chinese industry watchers consider viable for a new brand
- Banks pulled credit once they saw no new equity coming in, turning a funding gap into a cash-flow collapse
The lesson
A startup CEO's most important job is to make sure the cash outlasts the investor's patience; optimism is not a funding strategy.
Aftermath
Baidu and Geely stepped in to settle employee social insurance and guarantee vehicle service. The Jiyue brand effectively ceased operations, and its operating company later faced court enforcement over loan contracts. CEO Xia Yiping publicly admitted strategic failures in financing and optimism.
Sources
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