After days of rumors about financial problems at HiPhi the company has responded that it has delayed the payment of wages for January, cancelled the 2023 year-end bonus and reduced the salaries of senior executives.
HiPhi a brand from Human Horizons produces a range of high-end EVs which are currently officially on sale in both China and Europe. Deliveries of the first model, the HiPhi X, commenced in 2021 and the brand added both the Z and Y last year.
Rumors about HiPhi first surfaced in January and claimed that all production and R&D work had stopped. The rumor is believed to have originated from a netizen who is a supplier. In response HiPhi said that the company’s operations were normal and that all work of R&D, production, marketing, and delivery is progressing normally. The original post has now been deleted, and the platform has issued a warning to the poster.
New rumors appeared online after a staff meeting on February 7. Reports at the time also indicated that employees had been asked to work from home but had not been given the facilities to do so. HiPhi is saying that this part is not true and it was in fact just work arrangements due to the Chinese New Year’s holiday.
The year end or Chinese New Year bonus is important in China and usually consists of a cash sum equal to a number of months salary but it is dependent on the performance of the company and the overall economic outlook.
Originally both the HiPhi X and Z had prices starting at over 600,000 yuan (USD83,400) but since then some cheaper versions have been added and the HiPhi Y has prices starting at 339,000 yuan (USD47,150). Sales for the X were initially quite good regularly topping the Chinese luxury EV sales charts. However, reportedly sales for the brand were 4,237 units in 2021 and 4,349 in 2022. Full year figures have yet to be announced for 2023 but sales data for December showed that only 564 cars across all three models were delivered.
Reportedly the HiPhi store in the Taikoo Li building in Chengdu closed on January 29 and also another store in Guangzhou closed on January 23.
Editor’s note
HiPhi is one of the more exiting EV brands in China making genuinely different cars, we hope that they can sort out their financial problems. The company would also make a good takeover candidate for an OEM struggling to produce convincing EV offerings.
A quick perusal of its weak-knee website would support the suggestion that HH has not been straightforward and transparent about its status. Difficult to navigate, one is hard pressed to determine even where the company is headquartered, and how long it will be dependent on Dongfeng Yueda Kia for help in manufacturing.
As for capital, back in June, Reuters cited a Saudi Arabia state news agency report that the Ministry of Investment had signed a $5.6 billion deal with HH aimed at developing, manufacturing and selling cars.
Anyway I agree with the editor’s note, that it would be good to know that HH is not going to follow the demise suffered by so many once ambitious NEV start-ups.
The Saudi deal is believed to have fallen through which probably explains the current situation.
When I’ve spoken to HiPhi they have always insisted they own the factory although the badges on the cars do show they’re are produced by Dongfeng Yueda Kia. I think it is likely something to do with production licenses but the nature of business in China is never particularly clear.
The car is quite ugly….so I am not surprised about the weak sales
what about the saudi dollars that were supposed to financially help hiphi?
As Mark posted above, the deal is believed fallen through.
So from I know the saudi deal is not quite off but they got pissed when it was released to the press prematurely.
The staff have not been paid for longer than just January. All the showrooms are shut or shutting and debt collectors are in. All the staff have basically left as no one is being paid, my understanding this started about 3 months ago and they have steadily being losing staff when on Sunday they all got an email about this 6 month break and they wouldn’t be getting anymore money. Only people still present are top brass who are trying to come up with a rescue deal with the Chinese government which they are hoping will get the Saudis back onboard.
The bit that seems very dodgy is they are still taking orders and I assume deposits for cars that will likely never be delivered.