In 2018, BAIC Group is set to face significant challenges, including the potential withdrawal of government subsidies and intense market competition. Additionally, the company may also encounter issues related to its listing strategy. Despite these hurdles, Zheng Gang, a member of the BAIC Party Committee and General Manager of Beijing New Energy Automobile Co., Ltd. (BAE New Energy), assured that the group will remain steadfast in its approach.
During an interview with the 21st Century Business Herald on January 9, Zheng emphasized that BAIC Group will not waver in the face of major events. This statement comes amid reports of high-level departures at BAE New Energy and discussions around a potential backdoor listing.
On the same day, BAIC New Energy released its 2017 sales figures, revealing that it produced and sold 103,199 pure electric vehicles, accounting for 23% of China’s new energy vehicle market. This marked the fifth consecutive year that BAIC New Energy topped domestic sales in the sector.
Looking ahead, BAIC New Energy plans to introduce a “national car†lineup in 2018, featuring the new EC+EX models aimed at third- and fourth-tier markets, while the EU series and ET SUVs will target first- and second-tier cities. The company also aims to expand its network, launching over 400 new models.
In addition, BAIC New Energy has partnered with tech giants like Baidu to develop autonomous driving and vehicle networking technologies. Joint prototypes are expected to begin testing in Beijing's unmanned demonstration area within months, with quasi-commercial models launching by the end of the year and consumer models available in 2019.
The urgency of a backdoor listing has sparked speculation. A securities analyst told the 21st Century Business Herald that BAIC Group has already laid the groundwork for such a move, which is now seen as more rigorous than a traditional IPO. On December 27, 2017, S*ST announced that Beijing Capital Asset Management had transferred its shares in Sichuan Xintaike Digital Equipment Co. to BAIC Group, making it an indirect shareholder. Analysts believe this could be a step toward BAIC New Energy’s eventual listing.
BAIC New Energy’s listing has long been a strategic goal for Chairman Xu Heyi. When BAIC listed on the Hong Kong stock exchange in 2014, the new energy division was spun off. At the time, the sector was unattractive, and the company feared financial losses. Now, with BAIC New Energy showing profitability, the path to an A-share listing appears clearer.
Despite past losses, BAIC New Energy turned a profit in 2016, signaling progress. While a backdoor listing would still require meeting strict financial criteria, some reports suggest that through asset swaps rather than a direct IPO, the company might bypass the three-year profitability rule.
BAIC New Energy has also embraced a different corporate culture, aiming to break away from traditional state-owned enterprise perceptions. As Hu Enping, the chief brand officer, noted, the company sees itself as a reform pioneer, focusing on innovation and efficiency.
Since its establishment in 2009, BAIC New Energy has undergone multiple reforms, including a shareholding structure that includes private and foreign capital. In 2017, it became the first state-controlled mixed-ownership enterprise in Beijing with employee ownership, raising over RMB 11.1 billion in Series B financing.
BAIC New Energy is also shifting towards a smart mobility model, partnering with various entities to launch initiatives like the "Weilan Ecological Alliance" and the "Optimus Prime Plan." By 2022, the Optimus Prime Project aims to build 3,000 battery switching stations across 100 cities, significantly expanding the new energy vehicle ecosystem.
With the success of pilot projects in cities like Xiamen, where battery swapping stations operate efficiently, the model is being considered for nationwide implementation. These efforts aim to create a sustainable, green travel system that benefits both consumers and the environment.
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