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Collapsed Chinese Carmaker Sells Luxury Cars for Just $2,700

by DD Staff

December 29, 2024

JustAnotherCarDesigner, CC0, via Wikimedia Commons

key takeaways

There is intense competition in the electric vehicle (EV) market, and businesses must overcome many obstacles to remain viable.

The story of Jiuye, a Chinese EV brand that is partially owned by Geely, the parent company of Volvo, is among the most startling recent occurrences.

According to Boosted, Jiuye, which was formerly seen as a rising star, has had to adopt extraordinary measures due to its financial difficulties, such as offering luxury cars for an incredibly low price of $2,700.

Jiuye entered the EV market with big ambitions, including the launch of the Jiyue 07, a luxury sedan that even won the prestigious Red Dot Award for design.

However, despite these promising beginnings, the company’s journey has been marred by financial mismanagement and poor sales. To date, Jiuye has sold only 14,000 cars in China, far below expectations.

The company now faces a critical financial shortfall of 7 billion yuan ($960 million).

According to reports from Chinese media, this massive gap in finances was discovered by Baidu, one of Jiuye’s primary investors, during an October audit.

This revelation prompted Baidu to halt further investments, leaving Jiuye in a precarious position.

The crisis has led to employee unrest, with workers storming the company’s offices in December over unpaid salaries and severance packages.

Amid this turmoil, Jiuye made the extraordinary decision to slash prices on the Jiyue 07 to just $2,700, a tenth of its usual cost. The move was intended to generate quick revenue but instead sparked confusion and concern.

Although the Jiyue 07 is a five-meter-long luxury sedan with advanced features and a sleek design, the sudden price drop raised questions about the company’s strategy.

Remaining employees claim they were unaware of the decision, and sales of the discounted vehicles have since been suspended.

Jiuye’s future remains uncertain. With major investors unwilling to provide further support and growing financial instability, the brand’s survival appears unlikely.