Aiways exiting China to focus on manufacturing EVs for Europe
Chinese automaker Always’ financial troubles have worsened because of the ongoing EV price war in China, exacerbated by the entry of Xiaomi this year. Word out in the media is that the company has decided to pull the plug on domestic sales and will focus on less competitive countries moving forward.
According to a report by Autocar, Aiways doesn’t want to continue commercial operations in China because of the intense competition and cutthroat pricing from competitors. The company’s main focus will now be on Europe, where competition is strong but not extreme, neither on the product front nor in the pricing aspect.
The same day the British publication released the report, Aiways agreed to merge with American special purpose acquisition company Hudson Acquisition Corp and go public. This deal, valued at approximately $400 million, could be the last hope of survival for the Chinese automaker. The two companies expect to close the merger around 31 December.
Aiways doesn’t plan to bid adieu to China completely. According to a Reuters report, the company will have headquarters in Europe after the merger and public listing. While the European team will handle finance, marketing, and sales, R&D and production will mostly take place in China. Chinese battery giant CATL and ride-hailing service provider DiDi are among the investors in Aiways and they will remain shareholders, a person in the know of the happenings yet to be publicly disclosed told Reuters.
Established in 2017, Aiways focused on other markets from the start, possibly knowing it was too small to shake up the home market in the initial phase. The disruptions brought by the COVID-19 pandemic, the intense and ever-growing competition, and most recently the significant price cuts from big-name EV brands like BYD and Tesla may have further demotivated it to increase efforts on domestic sales. Furthermore, last summer, the company faced financial issues, which resulted in a strategic shift and the appointment of a new CEO.
Currently, Aiways has only two EVs in its product lineup, an SUV called U5 and an SUV coupe called U6. Production of both EVs used to take place at an in-house factory with an annual production capacity of 300,000 units, located in Shangrao (Jiangxi), China. Aiways suspended production last summer because of financial troubles and it still hasn’t resumed.
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