Employees at Rising Auto are expected to be laid off by more than 70 percent, while the remaining employees are likely to get a pay cut, according to local media.
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SAIC Motor Corp (SHA: 600104) is reportedly abandoning its electric vehicle (EV) unit Rising Auto, after faltering efforts to explore the battery swap market with the brand.
SAIC has begun layoffs, with Rising Auto employees bearing the brunt of the cuts, as part of a cost-cutting and brand-alignment effort, according to a March 14 report in local media outlet RoboX.
Rising Auto employees are expected to be laid off by more than 70 percent, while the remaining employees are likely to get pay cuts, the report said, citing a SAIC insider who goes by the pseudonym James.
The high-level smart driving team of Rising Auto, which was integrated into SAIC, has been eliminated, and going forward, SAIC's smart driving research and development will be handled primarily by subsidiary Z-One Software, the source said.
"Judging by a series of practices, SAIC has abandoned the Rising Auto brand," the report quoted another source, who goes by the pseudonym Simon, as saying, adding that the Rising F7 currently exported to Europe is being sold as MG's MG9.
SAIC officially established Rising Auto at the end of 2021 and handed over the R Brand, formerly under SAIC Passenger Vehicle, to the new brand.
On September 27, 2022, Rising Auto launched its first model, the R7, a battery-swap-enabled coupe SUV, making it the second automaker to offer a battery-swap-enabled model to the general consumer after Nio (NYSE: NIO).
On March 27, 2023, Rising Auto launched its second model, the battery-swap-enabled mid-to-large-size sedan F7, which is currently priced at RMB 189,900 ($26,390) starting price.
Despite targeting the battery swap market, Rising Auto has been conservative in its approach to the sector, with only three battery swap stations in Shanghai at the time of the F7's launch.
Rising Auto hasn't reported monthly sales for the past year, and RoboX reported that it sold about 14,500 units in 2022 and 14,000 in 2023.
The overlap in positioning with SAIC's other sub-brands may also be one of the reasons why Rising Auto is being cut.
The price range of SAIC's other EV division, IM Motors, has been reduced to less than RMB 200,000, overlapping with Rising Auto, RoboX's report noted.
If the price range of Rising Auto's models drops, it will in turn erode the Roewe brand, the report said.
($1 = RMB 7.1961)
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