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Jishi Automobile has raised over $1.5 billion in funding, and as an OEM (Original Equipment Manufacturer) production model, the company can focus more on research and development, channel expansion, and brand building.

Written by Cheng Rui

Produced by Jieche Technology

On September 24, news spread online that 'Jishi Automobile defaulted on payments and used vacuum cleaners to offset media cooperation payments.'

A media company employee claimed that they hoped to offset cooperation fees with a batch of vacuum cleaners produced by Roborock Technology Co., Ltd.

Subsequently, Jishi Automobile's official staff stated that the above information was completely untrue and had requested relevant self-media outlets to clarify the situation.

Jishi Automobile staff explained that it was another automotive company that used Roborock vacuum cleaners to settle debts, and that Jishi Automobile had no cooperation with the media company in question.

1

Over $1.5 Billion in Funding, Relying on OEM Production

As a Chinese smart new energy vehicle brand, Jishi Automobile belongs to Rokid Smart and is produced by Beijing Automotive Group Co., Ltd. on an OEM basis.

Rokid Smart was founded in January 2021 by Chang Jing, the founder of Roborock Technology Co., Ltd. (688169.SH), and Yan Feng, the former CTO of WM Motor.

In 2016, Xiaomi (01810.HK) launched a robot vacuum cleaner priced at RMB 1,699, marking the first large-scale application of LiDAR technology, which was backed by Roborock Technology Co., Ltd., now one of the 'Four Little Dragons' of robot vacuum cleaners.

In February 2020, Roborock Technology Co., Ltd. was listed on the STAR Market, with the company's 2023 revenue reaching RMB 8.654 billion, a year-on-year increase of 30.55%; net profit was RMB 2.051 billion, a year-on-year increase of 73.32%.

In the first half of 2024, Roborock Technology Co., Ltd.'s revenue reached RMB 4.416 billion, a year-on-year increase of 30.90%; net profit was RMB 1.121 billion, a year-on-year increase of 51.57%, demonstrating impressive financial strength.

Currently, Jishi Automobile has been established for over three years and has completed seven rounds of funding, including Series E funding and two rounds of strategic funding.

In April 2021, just three months after its establishment, Jishi Automobile secured funding from Gaorong Capital and Northern Light Venture Capital, with a post-investment valuation of $240 million.

Two months later, in June 2021, Jishi Automobile received Series B funding from Xianghe Capital, Gaorong Capital, Qiming Venture Partners, and Matrix Partners China. The transaction amount and post-investment valuation were not disclosed.

In January 2022, Jishi Automobile secured $100 million in Series C funding from Tencent Investments, Sequoia Capital China, and Xianghe Capital, which participated in the follow-on round.

In April 2022, Jishi Automobile received approximately $200 million in Series D funding, with a post-investment valuation of $2 billion. Investors included Coatue Management, Sequoia Capital, IDG Capital, and Xianghe Capital, which participated in the follow-on round.

In February 2023, Jishi Automobile received Series E funding, with a post-investment valuation of nearly $3 billion. Investors included familiar names such as Tencent Investments, IDG Capital, and Xianghe Capital.

By this time, although Jishi Automobile had not yet produced a single vehicle, its valuation had reached approximately RMB 20 billion (based on the average exchange rate in February 2023).

With ample cash on hand, Jishi Automobile finally achieved mass production.

On August 22, 2023, Jishi Automobile officially launched the Jishi 01, a mid-to-large-sized intelligent luxury SUV.

Jishi Automobile introduced two versions of the Jishi 01: the Versatile 7-seater and the Prestige 6-seater. The national retail price for the Versatile 7-seater is RMB 349,900, while the Prestige 6-seater is priced at RMB 359,900.

Vehicles in the same price range as the Jishi 01 include the Tesla Model Y, Li Auto L9, AITO M5, NIO ES6, and AVATR 11.

Following the launch of the Jishi 01, Jishi Automobile secured significant additional funding.

In September 2023, Jishi Automobile received its first round of strategic funding from Weiqiao Group, with a transaction amount of up to $1 billion.

In April 2024, Jishi Automobile received an additional RMB 100 million in capital, increasing the company's registered capital from RMB 1.45 billion to RMB 1.55 billion.

Overall, Jishi Automobile has raised over $1.5 billion in funding, and as an OEM producer, the company can focus more on research and development, channel expansion, and brand building.

2

Niche Positioning of Jishi 01, Resulting in Niche Sales

However, sales of Jishi Automobile's new vehicles have been underwhelming.

From October to December 2023, Jishi Automobile sold only 912 units, showing signs of sluggish demand from the outset.

In 2024, sales remained weak, with cumulative sales reaching 3,254 units in the first eight months, averaging just 407 units per month.

From June to August 2024, Jishi Automobile delivered 260, 327, and 380 units, respectively, indicating slow but steady growth.

According to the latest data disclosed by Yan Feng, Co-founder and CEO of Jishi Automobile, the Jishi 01 has delivered nearly 4,000 units in its first nine months on the market, averaging less than 444 units per month.

Against this backdrop, Yan Feng recently stated in a media interview that 'In the next two to three years, we will continue to solidify our brand and products, with sales volumes expected to range between 30,000 and 50,000 units.'

Yan Feng further explained that Jishi Automobile's short-term sales target is 30,000 to 50,000 units annually. While this target may seem conservative within the industry, the company is committed to achieving long-term stable growth in brand building and product quality. This steady approach reflects Jishi Automobile's clear understanding of its market positioning and a pragmatic attitude towards future development.

It is worth noting that automakers generally achieve break-even at annual sales of around 30,000 to 40,000 units. Even if Jishi Automobile meets its short-term sales targets, it will likely continue to incur losses.

Previously, Chang Jing, the founder of Jishi Automobile, stated that most startups in business history do not fail due to a lack of orders but rather because they burn through funds too quickly in their eagerness to expand.

An article published by China Business Network quoted Yan Feng as saying that Jishi Automobile plans to launch a facelifted version of the Jishi 01 in 2025 and is already working on its second global SUV model.

Some industry insiders argue that Jishi Automobile executives' framing of poor sales as a result of a 'steady and cautious' approach rather than a lack of 'aggressive expansion' is overly euphemistic. 'Without manufacturing qualifications, no new factories, and poor sales, a 'three-no' automaker like this cannot survive in today's fiercely competitive new energy vehicle market. Moreover, the company's lack of expansion is due to the fact that the funds raised for vehicle production are insignificant.'

What Exactly is the Jishi 01?

From refrigerators and TVs to large sofas, some new energy vehicle companies are promoting features that seem to detract from the practicality of automobiles. However, the Jishi 01 takes this to an even more extreme level.

In its promotional messaging, Jishi Automobile focuses less on the vehicle's performance and more on unconventional features, such as bringing a kitchen on board, installing a portable toilet, and even offering an on-board shower.

During the 2024 Chengdu Auto Show on August 30, Jishi Automobile officially launched a new variant of the Jishi 01 called the 'Fishing Master Edition.'

In May this year, Chang Jing, the founder of Jishi Automobile, released a video announcing the imminent launch of a portable toilet for the vehicle. He revealed that the first demo version was available in April but was only suitable for children and somewhat uncomfortable for women, prompting further improvements.

In September this year, Jishi Automobile delivered on its promise with the portable toilet. Chang Jing demonstrated in a video that the company had actually developed a center console storage box for the seven-seater version, primarily used for storage, but incorporating a compact toilet seat. By placing a disposable plastic bag over the seat and using gel inside to deodorize and absorb moisture, the toilet can be used by children and women in emergency outdoor situations.

Some netizens have commented that it took five months to develop such a feature, and investors may also feel a sense of urgency upon learning about it.