A few days ago, a reporter from Times Weekly visited the AIWAYS headquarters located in Building D, Changyang Chuanggu, No. 1687, Yangpu District. This place previously housed multiple departments such as brand communication, human resources, purchasing, and finance. Now, only abandoned tables and chairs are left in the empty office area. A layer of dust has accumulated on the tabletop, and the AIWAYS nameplate has been casually dropped to the ground.
Zhang Ming, a resigned employee of AIWAYS, revealed to reporters that AIWAYS employees participating in the resumption of work must re-sign a third-party labor dispatch contract. The resigned employee believes that this change means that employee salary payment and other activities will bypass AIWAYS's corporate body and will instead be performed by a labor dispatch company. AIWAYS also signed a confidentiality agreement with its employees, requiring employees not to disclose the matter to the outside world.
Since March this year, AIWAYS has been in deep financial crisis. There have been many negative messages such as salary arrears, rent cancellations for headquarters offices, and employees needing to pay their own social security. At the same time, due to financial problems, AIWAYS's entire operation has been almost paralyzed, including the content of many sections of the AIWAYS App. It has been cleared; many services such as maintenance service packages, vehicle lifetime warranty rights, discharge guns, etc. are no longer available for normal use. The headquarters office has been rented out, and the headquarters building is empty.
Information shows that AIWAYS was founded in February 2017 and is one of the earliest new car-making brands in China. Its founder Fu Qiang has served as the director of Shanghai Volkswagen Skoda Division, executive vice president of sales and marketing of Beijing Benz, and president and CEO of Volvo Cars China Sales Company. He has rich industry experience in the automotive field.
Fu Qiang left Volvo in 2016, founded AIWAYS the following year, and invited Gu Feng, then the financial director of SAIC, to join him. In December 2019, AIWAYS's first mass-produced model, the AIWAYS U5, was launched. However, the new car failed to make waves in the market after its launch. Data shows that from 2020 to 2021, AIWAYS sales were 2,600 and 3,011 vehicles respectively. Poor sales have also caused AIWAYS to suffer losses in consecutive years. In 2020 and 2021, operating income was 479 million yuan and 686 million yuan respectively, and net losses were 1.597 billion yuan and 1.623 billion yuan respectively. As of December 31, 2021, AIWAYS had only 54.64 million yuan in cash and total debt of 3.359 billion yuan.
When cash flow is close to drying up, AIWAYS is pleased to raise a key financing. On November 30, 2021, Shanghai Dongbai Industrial Group Co., Ltd. (hereinafter referred to as "Dongbai Industrial"), which is actually controlled by Chen Xuanlin, signed an "Investment Framework Agreement" with AIWAYS Automobile, and plans to increase its investment in AIWAYS by 2.5 billion yuan.
In January 2022, AIWAYS received hundreds of millions of dollars in strategic financing from Chen Xuanlin and his holding company Dongbai Group. After that, AIWAYS's senior management also changed. In July of the same year, AIWAYS founder Fu Qiang resigned from his position as legal representative and chairman, and Chen Xuanlin took over the position. In short, AIWAYS founder Fu Qiang officially "retired" as chairman and was taken over by investors. In addition, the company's CEO was also changed to Zhang Yang.
According to "Yicai Global", Dongbai Industrial's capital increase was directly financed by 1.41613 billion yuan through the "AIWAYS Direct Financing Plan Series Products" issued by Shanghai Beiguang Private Equity Management Co., Ltd. No. 1-8, short-term loan contracts were entered into in the form of 460.23 million yuan, equity financing from investors was 317 million yuan, and overseas direct investment was 306.64 million yuan. Among them, 202.5 million yuan was transferred in the name of loan repayment from April to August 2022, and the actual financing was 2.2975 billion yuan. During the capital increase payment process of Dongbai Industrial, AIWAYS carried out new product research and development, channel construction and other work. It also plans to complete a reverse merger through the merger with the education and training company Huaxia Boya and achieve a U.S. stock market listing.
In October 2022, AIWAYS's second mass-produced model, the U6, was officially launched. The car was released in April 2021 and was originally scheduled to be delivered in October of the same year, but was postponed due to funding issues. However, this round of financing did not go very smoothly, and it was this round of financing that paved the way for AIWAYS's current predicament.
In November 2022, the management team of AIWAYS changed again. Chen Xuanlin resigned as chairman. The legal representative of AIWAYS Co., Ltd. was changed from Chen Xuanlin to Zhang Yang. At the same time, Chen Xuanlin resigned as chairman of the company and continued to serve as a director, with Zhang Yang serving as chairman. In response to this change, an online fund company announcement disclosed: "Due to Chen Xuanlin's personal reasons, uncertainty has arisen in the operation and management of the financing party, and the principal and interest of some products have not been paid as scheduled." According to media reports at the time, Chen Xuanlin himself was stranded overseas as a result, and his shares in AIWAYS were frozen. AIWAYS's capital chain also became tense.
Public information shows that from March 2023 to the present, Chen Xuanlin has been listed as a person subject to execution for breach of trust twice by the court; he has been listed as a person subject to execution five times, with a total amount of execution subject matter of approximately 1.3 billion yuan; his equity in different companies has been frozen 15 times, with a total frozen amount of 2.4 billion yuan. People familiar with the matter said that most of the 2.2975 billion yuan capital increase received by AIWAYS in 2022 will be used to repay suppliers, and the remaining amount of 202.5 million will be transferred in the name of loan repayment, and another 250 million yuan will be paid in financial advisory fees for the 2.5 billion yuan capital increase; dragged down by the Chen Xuanlin case, AIWAYS Bank credit is blocked.
Tianyancha shows that AIWAYS has gone through 9 rounds of financing since its establishment. The investors include well-known investors such as CATL, Didi Chuxing, and Tencent Investment. According to the publicly disclosed funding limit, its total financing has reached nearly 10 billion yuan. During the period of obtaining financing, AIWAYS's second mass-produced car was launched, but the launch of the new car also failed to restore AIWAYS's sales decline. In 2022, AIWAYS' cumulative sales were 753 vehicles. In addition, although AIWAYS's operating income will increase in 2022, it will still have a net loss of 1.023 billion yuan, still unable to make ends meet. As of December 31, 2022, monetary cash was only 128 million yuan.
After entering 2023, AIWAYS's operating conditions are no longer optimistic. Starting from March, AIWAYS's cash flow has been disrupted. In July, AIWAYS issued the "Notice on the Appointment of the Company's CEO and Financial Director." AIWAYS said that it appointed Zhu Xiaohua as CEO of the company, responsible for the company's daily operations and management, with the appointment date starting from July 18, 2023; Tang Meiyu was appointed as the company's financial director, responsible for the company's financial management, with the appointment date starting from July 18, 2023. In addition, AIWAYS employees also received the "Notice on the Establishment of a Temporary Working Group on Shareholder Governance" sent by the Human Resources Department. The employer's representative Zhu Xiaohua and the founder Fu Qiang served as team leaders and actively carried out preparations for resumption of work and production. However, production at the AIWAYS Shangrao base is still suspended.
According to China Business News, on September 16, a resigned employee of AIWAYS Automobile Co., Ltd. (hereinafter referred to as "AIWAYS Automobile") said: "We were still planning an MPV in the second half of last year. The company launched the 'Thousand Talents Recruitment Plan' and was building more outlets domestically. Everything seemed normal. Even the year-end bonuses were issued normally at the beginning of this year. But suddenly, the capital chain was broken."
As for why AIWAYS suddenly fell into financial difficulties? According to people familiar with the matter, the immediate trigger was a storm at the investment institution where former chairman Chen Xuanlin worked. Affected by this, AIWAYS's external financing channels were blocked. In addition, an insider revealed: "AIWAYS still has hundreds of thousands of undelivered orders overseas. We are currently encountering difficulties, but if funds can come in later, we still have a chance to survive."
As of press time, AIWAYS officials have not responded to the above reports.