Is former Nio JV Chinese EV brand Hycan about to go bust?

If your initial reaction is “Who?” then this pretty much sums up the problem. Originally founded as a joint venture between Nio and GAC the Hycan brand has never been particularly successful. Sales are declining and in May the brand only managed to sell 196 units. The company is now also beset by employee protests and time looks as if it is running out for Hycan.

The brand started life at the end of 2017 as a joint venture between GAC and Nio with both GAC Group and GAC New Energy, now GAC Aion, taking a share in the company. Under the agreement GAC was responsible for R&D and production of the cars while Nio provided technology and EV infrastructure. Through the JV Nio was hoping to enter the mass market while GAC was hoping to go more premium, which already sounded like a disconnect.

In May 2019 Hycan unveiled its first model the 007 (see specs). Visually it was little more than a GAC Aion LX SUV with a redesigned front and rear along with new wheels. The interior also got a redesign and came with a smart assistant similar to Nio’s Nomi. Xiao Can, as the assistant is known, also in the 007 had a top of the dashboard physical presence like in Nio cars. Sales of the Hycan 007 began in 2020.

Although Hycan has many problems, sales are a unifying factor. An examination of the brand’s swish website shows that it has five models on sale. The 007 is still on sale and seems to be the only one to use the Xiao Can system or at least as a dashboard mounted system. It also has an unusual triple screen arrangement where all three are blended into one with the third screen below the second screen in the center.

Following on from the 007 is the Z03 which took an Aion Y SUV and gave it a similar redesign treatment. Selling points for the Z03 (see specs) appear to be the ADAS system and that the seats can lie flat creating a comfortable leisure space. The website shows a projector and screen setup for the interior similar to the one available for the Xpeng P5.

Making up two of the five models on sale are the A06 and the A06 Plus sedan. The A06 went on sale in 2022 and the Plus at the end of last year. Really the Plus should be called Minus, not only is it the cheapest version, but it is also 20 mm shorter and has the smallest battery capacity (60 kWh), plus it is the only version to use cheaper lithium iron phosphate batteries. At launch with a drag coefficient of 0.217 Cd the A06 (see specs) was one of China’s most aerodynamic sedans. The performance version has a 3.7 seconds acceleration time. Notably, the A06 is the first Hycan to use a dedicated platform, all previous models were based off GAC Aion models.

Finally, there is the V09 MPV which along with being the brand’s most expensive vehicle, also seems to be the most technologically advanced. At the 2021 Guangzhou Auto Show Hycan showed two concepts, the Concept S sports coupe and the Concept M MPV. The V09 (see specs) is largely a production version of the latter and went on sale in late 2023. A 2+2+3 seating arrangement MPV it features 800V architecture and can add 1 km of range every second with 4C charging. Maximum range is 762 km CLTC and the V09 features Lidar.

In 2023 Hycan sold all of 18,559 cars which was less than the 18,941 units in 2022. Sales in May fell off a cliff edge from 762 in April to just 196. For a brand with four models on sale, this performance is terrible.

Employee relations

There seem to be three main issues between employees and the company. First and foremost is the issue of salary payment. According to Fast Technology, insiders have said Hycan has not been paying suppliers for some time and there was no factory year-end bonus. March’s salary payment was only paid at the basic rate meaning a 30-50% reduction in payment and there was no communication or explanation from the company as to why.

The company is also now operating a scheme where employees are being sent in to the dealers stores to try to sell cars. Those that succeed get a reward of 3% of the car’s guide price which means they can receive somewhere between 5000 and 12,000 yuan (700 – 1,650 USD). The scheme appears to have been implemented in April 2023 and requires employees to sell at least one car each over a year. However, for those that fail there are punishments. Yiche reports a number of staff have left because of this scheme and say that the year-end bonus and performance bonus will be reduced according to the proportion of the outstanding achievement. Executives stand to lose 5% of the salary and ordinary workers 3%.

Making headlines today was a protest which took place on June 15 at the  GAC Pavilion asking them to protect the rights of Hycan employees. Central to the protest was the “Administrative Measures for Compulsory Co-investment by Employees” scheme implemented between 2018 and 2021 which forced 50 employees to invest in total over 100 million yuan (14 million USD). Hycan had promised to return the money if the employees involved left the company but due to the company’s financial problems that is currently not happening. Since August 2023 many of the employees involved have submitted resignations and requested the return of funds.

Hycan ownership

Nio by 2020 was suffering from severe financial problems and had to be bailed out by a cash injection from the Hefei city government. As mentioned earlier there was a divergence between the aims of Nio and GAC with the Hycan brand and for this reason along with Nio’s financial problems Nio’s share progressively got watered down. In 2021 Zhujiang Investment Management (aka Guangdong Pearl River Investment Management Group) became the largest shareholder with Nio holding just 4.5%. The following year Nio withdrew completely.

Currently Zhujiang holds a 68.56% share of the brand, GAC Aion 20.54% and GAG Group 4.46%.

Editor’s note:

Hycan has always been one of the brands which seemed pointless. Now with GAC’s success with the Hyper sub-brand of Aion there seems to be even less point to it. Although Hycan has come out in recent years with some more interesting designs it never really managed to announce itself to the world and as a result most will probably not even notice its death.

Sources: Autohome, Fast Technology, Hycan, Yiche