HiPhi halts all production with immediate effect in China

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The high-end Chinese EV maker HiPhi halted production in its sole facility in Yancheng, north of Shanghai. The local media reported that the production shutdown was only temporary, for six months. The company also confirmed rumors that January salaries will be postponed until the end of February.

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CarNewsChina obtained the internal memo sent to company employees, confirming outlet Jiemian’s information. The announcement further states that factory entry is forbidden, and the payment date for salaries for February 1 – 18 is yet to be determined. The employees who remain with the company between February 18 and March 18 will receive a 70% salary. After March 18, all employees will receive only a minimum wage salary following the regional minimum guarantee.

“If you are anxious to pay social security, you need to resign before February 25 and pay social security by yourself because you can’t pay social security while working,” the Human Horizons internal message to employees ends.

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HiPhi internal memo to employees on WeChat. Translation: Starting from February 18th (today), the company will fully enter the shutdown stage of production, and the time will be determined to be six months. Factory entry is not allowed. January salary will be paid at the end of February. The wages for Feb 1-18: the payment date will be determined. Feb 18 – Mar 18 is the basic salary, 70% of the employee’s salary. After March 18, basic living expenses are paid according to the regional minimum guarantee. Suppose you are anxious to pay social security. In that case, you must complete the resignation procedures before 2.25 and pay social security yourself because you cannot pay social security yourself while working.

HiPhi is a premium brand owned by EV maker Human Horizons. The company was famous for selling quirky EVs with futuristic designs and sound tech. For example, its latest spaceship-shaped sedan, HiPhi Z, was first among 23 EVs participating in Norwegian extreme cold testing, achieving a 522 km range, beating all its rivals, including Tesla Model 3, BMW i5, Nio ET5T, Mercedes EQE, and Kia EV9.

Human Horizons doesn’t manufacture the cars by itself but instead uses a Nio-like contract manufacturing approach. Kia contract manufactures HiPhi cars in its Yancheng plant. The facility was formerly known as Dongfeng Yueda Kia’s First Plant and suspended production at the end of June 2019. It was responsible for Kia Sportage, Soul, and Cerato. The first contract-manufactured car, HiPhi X, rolled off the production line in November 2021.

The production capacity of the Yancheng plant is 150,000 vehicles/year. The Hiphi sells three cars (X, Y, Z), and their sales in previous years were:

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  • 2021: 4,237 EVs
  • 2022: 4,349 EVs
  • 2023: 4,829 EVs

Most vehicles sold in 2023 were HiPhi Y, the entry-level SUV, which accounted for 4,17 cars. The Y is HiPhi’s cheapest EV, starting at 339,000 yuan (47,150 USD). The HiPhi X and Z had prices starting at over 600,000 yuan (83,400 USD) upon launch, which might seem not so high for EU/US buyers, but in China, where you can buy an all-electric AWD sedan with over 550 hp for 30,000 USD, that is a pretty expensive segment.

In January, HiPhi confirmed that wages for the first month of the year would be upheld until the end of February, all year-end bonuses would be canceled, and all salaries would be reduced. The company also denied that all employees were sent to their homes without the company laptops and other equipment, saying that only some employees decided to leave earlier for Chinese New Year.

On February 12, CarNewsChina reported that Hiphi closed its stores in Chengdu and Guangzhou. HiPhi is also one of China’s EV makers that expanded to Europe, selling EVs in Norway and teasing them in Germany.

As the China price war continues through 2024, we will see more EV makers sign wheels as among 97 EV makers selling current cars in China, only those with pockets deep enough can continue selling cars at nearly the loss through all possible or impossible channels, like shopping malls, smartphone stores or former legacy automakers showrooms. We will keep an eye on it.

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    • “The first contract-manufactured car, HiPhi X, rolled off the production line in November 2021.”
      “….their sales in previous years were:
      2021: 4,237 EVs
      2022: 4,349 EVs
      2023: 4,829 EVs….”

      And so yes Felix, these other China sales numbers appear dubious as well.
      The field of NEV start-ups in the teens was so crowded, I suppose we should not be surprised at the imminent demise of another.

  1. This is both a bad news and a good news.

    It is bad news because the HiPhi X and HiPhi Z are SERIOUSLY great cars!!

    The HiPhi X was by far one of the very best cars in the luxury category when it first came out.

    It is good news because there are way too EV makers in China. It is obvious most of them will eventually have to close down.

    The earlier they close down, the better for the rest, and the healthier for the market as a whole.

    Let’s hope the ones that are destined to fail will close down ASAP so as to hand over their share of the market.

  2. Yes M, It’s really too bad that such an eye-appealing line up, of three strong, bold, futuristic looking models, would not succeed.
    But I think Human Horizons bit off more than they could chew. Lots of R&D, producing advanced design features, like in wheel hub e-motors, rear wheel steering, etc.. Yet the essentials were sadly neglected.
    Take a look at Li Motors by comparison. I was so surprised to see their impressive success among a plethora of start-ups. The new company offered only one model, that didn’t even offer a fully electric powertrain (BEV). The technology was conventional, and the body style was “ho hum”..
    Nonetheless they got the consumer’s eye, and then his trust to give it a try…and the numbers prove it.
    Anyway, like Rehan above, I really hope this isn’t the end for this otherwise promising company.


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