In 2018, BAIC Group is preparing to face several challenges, including potential subsidy cuts and intense market competition. Additionally, the company may also be dealing with corporate listing issues. 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), emphasized that the group will not retreat from its goals. During an interview with the 21st Century Business Herald on January 9, he stated, “We will not change our ranks in the face of these major events.â€
Prior to this, Beiqi New Energy had already taken steps toward high-level exits and backdoor listings. 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 that year. This marked the fifth consecutive year that the company topped domestic new energy vehicle sales.
Zheng Gang also outlined the company’s plans for 2018, stating that BAIC New Energy would launch a “national car†combination, including the new EC+EX models, aimed at penetrating third- and fourth-tier markets. Meanwhile, the EU series and ET SUVs would target first- and second-tier cities. The company also plans to build more than 400 charging stations across the country.
In addition to expanding its product lineup, BAIC New Energy has partnered with tech giants like Baidu to develop autonomous driving and vehicle networking technologies. A joint prototype is set to begin testing in Beijing’s unmanned demonstration area within months, with quasi-commercial models expected to hit the market by the end of the year, and optional models available in 2019.
The urgency of a backdoor listing has raised questions. According to a securities analyst interviewed by the 21st Century Business Herald on January 14, “BAIC Group has already paved the way for a backdoor listing. Currently, backdoor listings are treated similarly to IPOs, but with even stricter approvals.†The analyst added that BAIC might face challenges, but the move reflects the urgent need for the company to go public.
On December 27, 2017, S*ST announced that Beijing Capital Asset Management had transferred its stake in Sichuan Xintaike Digital Equipment Co. to BAIC Group. This move made BAIC an indirect controlling shareholder of S*ST, signaling a significant step in the company’s restructuring efforts.
The share reform of S*ST has been delayed for over a decade, but BAIC’s involvement could help accelerate the process. The company plans to integrate BAIC New Energy and other assets into the listed entity, aiming to enhance corporate governance and expand its capital base.
According to Qing Feng, a spokesperson for BAIC New Energy, going public through the capital market is essential for growth and improved management. This aligns with the long-term vision of Xu Heyi, chairman of BAIC, who has always aimed to have BAIC New Energy listed independently.
Currently, the A-share listing process for BAIC New Energy is entering a substantive phase, with results expected in the first half of 2018. If successful, it would become the first Chinese new energy vehicle company to go public through a backdoor listing.
Despite past financial losses, BAIC New Energy turned a profit in 2016, which may help meet the requirements for a backdoor listing. Some reports suggest that the company may avoid the three-year profitability rule by using asset swaps rather than a direct IPO.
Hu Enping, chief brand officer of BAIC New Energy, described the company as a model for institutional reforms, comparing it to Shenzhen—a symbol of China’s openness and innovation. He emphasized that BAIC New Energy is breaking traditional perceptions of state-owned enterprises by exploring modern automobile markets and international competition.
Since its establishment in 2009, BAIC New Energy has undergone several structural reforms, including a shareholding system in 2014. After a mixed-ownership reform in 2016, the company raised RMB 11.118 billion in Series B financing, involving private and foreign capital, as well as employee ownership.
Looking ahead, BAIC New Energy is shifting from traditional manufacturing to internet + manufacturing and smart travel services. To better serve consumers, the company has launched the "Weilan Ecological Alliance" and the "Optimus Prime Plan."
By 2022, the Optimus Prime Project aims to invest 10 billion yuan, building 3,000 power exchange stations in over 100 cities and deploying 500,000 replacement vehicles. The project also seeks to integrate new energy vehicles, batteries, and photovoltaic power to create a green, efficient travel ecosystem.
According to industry experts, the model has shown promising returns. For example, taxi drivers could see monthly income increases of up to 506 yuan, leading to substantial annual earnings. However, the current stage of development still faces challenges related to land and power resources.
Chen Zhixiong, executive director of AOL (Xiamen) New Energy Automotive Technology Co., Ltd., noted that the return on investment depends on pricing strategies. With favorable rates during the pre-market phase, the model is gaining traction.
Since 2016, BAIC New Energy has deployed over 3,500 electric taxis in cities such as Beijing, Xiamen, Lanzhou, and Guangzhou. In Xiamen, nearly 500 taxis operate using battery swap technology, with four charging stations already in place. By the end of 2017, the city planned to expand to 8–10 stations, covering the island with a comprehensive network.
A visit to one of the stations revealed that the entire battery swap process takes under three minutes, with an average of 290 exchanges per day. The stations operate at 70–80% capacity, demonstrating strong efficiency.
Hu Enping highlighted that the success of the battery swap model relies on three key factors: rational outlet distribution, favorable electricity prices, and cooperative partnerships. Xiamen’s experience, he said, can be replicated nationwide, making it a model for the future of new energy mobility.
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