A concept car displayed by state-owned Beiqi Group at its R&D center in Beijing on Nov. 6, 2014.
Around the Chinese New Year in the yellow calendar, news of a 20% layoff at state-owned Beiqi New Energy was reported. In response, internal employees revealed that they did hear the layoffs, and each department was assigned the task of layoffs, but the company suspended the move due to media attention.
Internal staff: did hear the layoffs
The Securities Times reported on March 3 that, according to internal employees of BAIC New Energy, “We did hear the layoffs internally, and each department has been assigned some layoff tasks in varying proportions. However, after the media focused on the matter, the company suspended the action, and it is accurate to say that no personnel have been laid off yet.”
Internal employees said that the news of layoffs was related to the company’s huge losses in 2020.
In a recent media communication meeting, BAIC New Energy management denied the rumors of layoffs, but emphasized that internal reform has already begun, “Around all people and things that are not in line with high-quality development, the knife of reform will be cut down.”
Meanwhile, there are endless discussions in the industry about BAIC New Energy’s huge losses.
Founded in 2009, BAIC New Energy was the first Chinese new energy vehicle company to land on the A-share market, and had topped China’s pure electric vehicle sales list for seven consecutive years. However, in 2020, BAIC New Energy’s sales and performance fell off a cliff.
BAIC New Energy will sell a total of 25,900 units in 2020, a decline of 82.79% compared to 150,600 units in 2019. According to the latest production and sales data released by BAIC Blue Valley on February 9, in January 2021, BAIC New Energy sales were 1,072 units, down 46.56% year-on-year, indicating that the downward trend is still continuing.
For the company’s performance and sales cut, BAIC Blue Valley said in the announcement that the company’s production and sales did not meet expectations due to factors such as the Communist virus Epidemic, especially the high percentage of public sales were seriously affected by the epidemic, which affected the company’s performance by an amount of about 3 billion yuan.
On January 29, BAIC New Energy’s parent company, BAIC Blue Valley, disclosed an announcement that it expects to achieve a net profit loss of 6 billion to 6.5 billion yuan attributable to shareholders of the listed company in fiscal 2020; and a net loss of 6.2 billion to 6.7 billion yuan attributable to shareholders of the listed company for deductible net profit.
A research and development staff of BAE New Energy said that he entered BAE New Energy in 2011, and by 2021, colleagues who joined the company at the same Time basically left.
He said it was obvious that the company’s development momentum was lacking in the past few years, and many of the pre-planned projects had folded midway.
State-owned enterprises rely on government subsidies for their operations
According to Li Ziliang, a partner at Elanrio Corporate Management (Beijing) Co., the company is very sensitive to the development policy of new energy vehicles in general, and when the policy dividend recedes one by one and full market competition comes, BAIC’s advantages in new energy will be gone.
The mainland media reported that government subsidies accounted for most of BAIC New Energy’s non-recurring gains and losses. In 2015 and 2016, for example, BAIC New Energy received government subsidies of 57,962,800 yuan and 148 million yuan, accounting for 77.48% and 57.59% of non-recurring gains and losses for the period, respectively. And according to the financial reports of BAIC Blue Valley in 2018 and 2019, BAIC Blue Valley received government subsidies of up to 4.452 billion and 4.183 billion yuan respectively, accounting for up to 34.34% and 17.73% of the revenue of pure electric passenger cars.
Currently, with the gradual retreat of new energy vehicle subsidies, BAIC Blue Valley’s performance has fallen off a cliff due to its own lack of “blood-making” capacity.
According to the announcement of BAIC Blue Valley, the government subsidies received by the company in 2020 will drop significantly compared to 2019, and the impact on the company’s performance will be about 900 million yuan.
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