Auto Manufacturers Going Bankrupt, Leaving Car Owners as "Orphans": A Cruel Survival Experiment for New Energy Vehicles
Hello everyone, I'm your financial journalist. Today, we're going to discuss a topic that's causing many new energy vehicle owners a lot of concern: the cars are still there, but the manufacturers are gone. So, how will these cars be repaired in the future? How will they be sold? And even, how will they be driven?
The recent Chengdu Auto Show was quite lively, with new cars competing for the biggest screens and the most advanced driver assistance systems. But behind the glamorous displays, there are 850,000 new energy vehicles across the country that have become "orphans." These cars are not broken or malfunctioning; they still have all their functions, but the companies that made them have gone bankrupt. Service centers have closed, spare parts are no longer available, insurance coverage has ended, and used car dealers are driving down prices to the lowest levels. The "high-tech" vehicles that owners spent hundreds of thousands of yuan on have quickly become problematic to repair, difficult to sell, and can only be driven with great caution.
As of May this year, a total of 23 new energy vehicle manufacturers have gone bankrupt or ceased operations, affecting 850,000 vehicles. This is not just the disappearance of a few brands; it's a profound reshuffle involving industrial logic, local finances, and consumer risks. Let me break down this issue into five key aspects in plain language to help you understand the situation better.
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1. From "New Nobles" to "Out of Print": How Did This Become a车主's Nightmare?
In the past, when we bought a car, we worried about how well it would drive and how fuel-efficient it was. Now, there's a more realistic concern: Will the manufacturer survive longer than the car's lifespan?
This is not an exaggeration. Since around 2020, names like WM Motor, Aiways, Tianji, Byton, Youxia, Rayding, Bojun, Sailin, and Qiantu have gradually disappeared from the market one by one.
- The Lesson from WM Motor: In October 2023, WM Motor entered judicial reorganization, and all its 4S stores closed. Suddenly, 110,000 owners were left without any support. A car owner in Shenzhen had a battery issue and couldn't find anyone to fix it; in the end, he spent 30,000 yuan to buy a used battery to install in his own car. Without any testing or warranty, he had to drive it with potential safety hazards.
- The Dilemma of Nezha: Nezha Automobile was a sales champion in 2022, selling over 150,000 vehicles. However, in 2025, its parent company went into bankruptcy reorganization, and in 2026, it was declared bankrupt. The 400,000 owners faced closed after-sales services and non-functioning customer service lines. A Beijing owner who was promised a lifetime warranty on the vehicle's battery found that the battery's range was significantly reduced, and after spending over 20,000 yuan on repairs, he tried to sell the car but could only get a fraction of its original price.
- The Embarrassment of Jiyue: Jiyue was backed by Baidu and Geely, so one might think there would be support. But when it went bankrupt at the end of 2024, there were only 15,000 owners, and the newly delivered cars became "out of print." This shows that shareholders' promises and the survival of the company are two different things.
What's even more frustrating is that many owners have found that the car's connected services have stopped working. If you want to remotely control the car or use online navigation, you have to buy a data package for 299 yuan a year. Some owners even had to jump-start their cars because they couldn't open them. A car that cost hundreds of thousands of yuan has suddenly become a cumbersome and problematic asset.
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2. Why Are Electric Cars More Difficult to Repair Than Gasoline Cars? Because the "Black Box" Locks the Technology
Many people wonder why, when Fiat and Mitsubishi withdrew from the Chinese market, their cars could still be repaired at local workshops. The difference lies in the technology:
- Gasoline Cars: Models like the Santana have been around for over a decade, and there's a well-established system of standard parts. Engines, transmissions, and chassis are relatively standard, and parts are easily available.
- Electric Cars: Batteries, motors, and electronic controls (the "three electrics") are highly customized for each manufacturer. Additionally, diagnosis rights are restricted. Fault codes and testing procedures are encrypted and stored in cloud servers. When a company goes bankrupt, the servers are shut down, and third-party repair shops can't read the codes or access the battery packs.
There's also a significant gap in repair capabilities: there are about 400,000 gasoline car repair shops nationwide, but only 20,000 to 30,000 for new energy vehicles, and only 2% to 3% of them can repair the "three electrics" properly. For example, replacing a headlight assembly for a HiPhi car can cost 38,000 yuan, which is more than the car's residual value.
This creates a vicious cycle: Car breaks down -> No spare parts from the manufacturer -> No access for third-party repair shops -> Can't be repaired -> Car loses value -> Can't be sold.
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3. The Law Says Warranties Should Last Ten Years, but in Bankruptcy, Owners Come Last
Article 21 of the Automobile Sales Management Measures states that suppliers must ensure spare parts and after-sales service for discontinued models for at least ten years. Sounds good, right?
In reality, legal procedures are much colder than moral commitments during bankruptcy:
- Debt Priority: When a company goes bankrupt, its assets are distributed according to legal rules:
1. Mortgage creditors (e.g., banks) are paid first.
2. Employees' wages and taxes are paid next.
3. Only then are ordinary creditors compensated.
- Owners' Position: In legal proceedings, owners' claims are usually considered ordinary debts, meaning they come after banks, employees, and the tax authorities.
- The Case of WM Motor: During WM Motor's pre-reorganization, it was revealed to have debts of about 25 billion yuan and assets of only 9.6 billion yuan. With such a large debt, owners' claims were unlikely to be satisfied.
- A Glimmer of Hope: In November last year, the Supreme Court recognized car connectivity service fees as "co-benefit debts," which was a small breakthrough. However, no owner has received actual compensation for their warranty claims to date.
In short, the law gives you rights, but bankruptcy laws don't provide financial support.
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4. The "Gamble" of Local Finance: Where Does the Money Come From, and Who Pays the Price?
Looking at the bigger picture, the "orphan cars" are just a symptom of a much larger gamble involving local finances and capital:
- Frenzied Investment: After the new energy industry was launched in 2009, local governments offered land, reduced rents, and subsidies to attract investment. The money came from local finances and state-owned capital platforms.
- The Lesson of Yichun: CCTV's "Focus Interview" exposed the case of Yichun, Jiangxi. A car factory that started production in 2021 now has only empty buildings. The contract between Yichun Economic Development Zone and Hezhong New Energy involved a total investment of 5 billion yuan, most of which came from the local government. The local state-owned assets and finance departments invested nearly 2 billion yuan, and additional incentives were provided. In the end, a state-owned company invested 1.42 billion yuan, with at least 800 million yuan lost.
- The Bubble of Capital: Nezha burned through over 20 billion yuan in funding, including investments from Nanning and Yichun, as well as speculative equity. After three years of losses, the average cost per car sold was over 80,000 yuan. Early investors withdrew, and the local government and consumers ended up bearing the losses.
Conclusion: New energy is a policy-driven sector, but local competition has turned into a race to see who can invest the most. The money comes from local state-owned assets, with social capital chasing high returns, and consumers are the ones who ultimately pay the price.
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5. The Market Is Being "Passively" Reorganized: Exportation as a Lifeline, but with Greater Risks
Looking at the overall market:
- Sales Decline: In August, new energy passenger vehicle sales were 1.005 million, a year-on-year decrease of 10.1%. The first eight months saw a cumulative decline of 12.1%. Overall, passenger vehicle sales decreased by 20.8%, with gasoline vehicles falling by 40% and pure electric vehicles by 45% in August.
- Misleading Penetration Rates: The penetration rate of electric cars has reached 65.2%, but this is due to the faster decline of gasoline vehicles, which has lowered the denominator.
- Exportation as a Bright Spot: Domestic sales are shrinking, so cars are being exported. In August, 888,000 passenger vehicles were exported, a year-on-year increase of 77.8%, with new energy vehicles accounting for 58.4% of total exports.
- Increasing Risks: Exportations are vulnerable to trade wars, which can have a significant impact on new energy companies.
Future Trends:
According to consulting firm AlixPartners, out of the 129 new energy brands on the market in 2024, at most 15 will survive by 2030. Xpeng's He Xiaopeng predicts that no more than 7 brands will remain. Great Wall's Wei Jianjun puts it more bluntly: "The 'Evergrande of the automotive industry' has already appeared!"
As of the end of June this year, there were 48.97 million new energy vehicles in use, with 23 brands gone, affecting 850,000 vehicles, accounting for less than 2%. But this is just the beginning. In the coming years, with each brand going bankrupt, more owners will find themselves with cars that are still there, but the manufacturers are gone.
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Advice for the Public:
1. Consider the Manufacturer's Survival Ability Before Buying: In the past, compare features and prices; now, consider whether the manufacturer will be around for the car's entire lifespan. Choose established brands like BYD, Tesla, Geely, and Changan to avoid taking risks with niche newcomers.
2. **Check Warranty Terms for the "Three Electrics": Read the contract carefully to see if the warranty applies to the car or the manufacturer. If the manufacturer goes bankrupt, will it be guaranteed by a third party?
3. Keep Records: Keep all purchase contracts, warranty agreements, and repair records. Join car owner communities for collective support.
4. Be Cautious About "Smart" Features: Connected car services and OTA updates rely on the manufacturer's servers. If the manufacturer goes bankrupt, these features may become unavailable. Ask yourself: Can you still accept the car without these features?
In Summary: The elimination race for new energy vehicles has just begun. For consumers, this is no longer just about buying a car; it's a comprehensive test of brand resilience, legal protections, and market rules. While enjoying the benefits of technology, it's important to be aware of the associated risks.