The Chinese Communist Party‘s state-owned enterprise “Beiqi New Energy”, which has been the top seller of pure electric vehicles on the mainland for seven consecutive years, has recently been exposed to major layoffs and senior executives’ departures. The company is in an existential crisis as subsidies are reduced and the Epidemic is raging.
According to media reports on the mainland, insiders at BAIC New Energy said that before the Chinese New Year, BAIC New Energy is planning to start a round of layoffs with a ratio of 20%, and some executives will not be spared, and some departments have already issued a clear “layoff list”.
Many employees of the plant started to send out resumes to look for jobs, but some employees said that there are no more car companies in Beijing except BAIC, so it is difficult to find a particularly suitable and corresponding job, and they are already planning to change jobs, so this year’s New Year is very sad.
Previously, on January 25, BAIC New Energy issued an announcement that the company’s chairman, Jiang Deyi, resigned and will no longer hold any position in the company. Before resigning, Jiang Deyi served as chairman for only four months.
Subsidy reduction coupled with the epidemic mainland new energy vehicles are in crisis
“China’s glass king” Cao Dewang mentioned the problem of new energy vehicles on the mainland in a media interview in early January this year. He said: “The so-called new energy vehicles are essentially electric vehicles, some companies call them new energy vehicles just want to get subsidies, but companies rely on subsidies can not live long. This part of the new energy vehicle industry may have accumulated a certain bubble, and may end up wasting a lot of money again, and overcapacity.”
BAIC New Energy, a Communist Party state-owned enterprise founded in 2009, has been the top seller of pure electric vehicles on the mainland from 2012 to 2019, and was once known as the “leader” in pure electric vehicles on the mainland.
In the past few years, BAIC New Energy, like other new energy vehicle companies, has been massively subsidized by the government despite repeated product quality shortcomings. In the first half of 2019 alone, for example, BAIC New Energy received subsidies amounting to 207 million yuan (RMB, same below).
On January 5, 2021, the Chinese government announced a further 20% reduction in subsidies for new energy vehicles.
The decline in subsidies coupled with the impact of the epidemic has resulted in BAIC New Energy producing only 13,224 units and selling only 25,914 units for the year 2020, nearly half of which were to clear inventory, an 82.79% decline year-over-year.
In addition, the mainland new energy vehicle industry is plagued with problems. The information from the information technology monitoring platform of Qianlong Zhiqiu All Media Public Opinion shows that the problems in the new energy vehicle industry in 2020 include: frequent safety accidents, many complaints about battery failure, difficulty in promoting the power exchange model, exaggerated product features, shortcomings in the supply chain, and bankruptcy and collapse of vehicle enterprises, among which the battery problem tops the list of complaints.
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