Is HiPhi the next EV bust? Premium Chinese automaker shuts down production

Remember Nio, XPeng, or Li Auto? Those Chinese EV upstarts that promised to turn the automotive world upside down? While they seem to be plowing on, we can add HiPhi to the list of brands facing major growing pains. The company, known for its luxury electric vehicles with eye-catching futuristic designs, has abruptly halted production amidst swirling financial troubles. With sales sputtering and costs mounting, HiPhi is destined to be the next cautionary tale for hopeful EV makers.

The news comes as a blow to HiPhi's ambitions in the competitive electric vehicle market. Founded in 2017, Shanghai-based Human Horizon's HiPhi brand aimed to take on Tesla and other premium carmakers. But after only a few short years, their journey hit a major roadblock. The company announced a staggering six-month production halt just days ago. Employees are in limbo, reportedly only getting paid up to March 15 – that is, only those based in Shanghai.

How did it get to this? After several rounds of rumored mass layoffs last year, employees began noticing signs of serious cash flow struggles. Late salaries, canceled bonuses, and executive pay cuts hinted at deeper underlying issues. This once-promising luxury EV brand seems to be spiraling out of control.

Sales figures tell a bleak story. The initial excitement behind the HiPhi X didn't translate to sustained consumer demand. Reportedly, HiPhi sold less than 5,000 vehicles across all models throughout 2022. With December 2023 deliveries coming in at a dismal 564 units, the downward trend was becoming undeniable. Unfortunately, sky-high price tags and flashy features only go so far when customers just aren’t buying what you're selling. HiPhi might be a case of misreading the market or aiming for a niche segment with insufficient demand.

HiPhi's downfall likely comes down to a mix of lofty ambitions and poor execution. Its first model, the HiPhi X, launched in 2020 with a hefty price tag – around a cool $84,000 (RMB 600,000). The car's unique features, like "suicide" rear doors and a massive passenger display, seemed aimed to dazzle tech-obsessed audiences. Even HiPhi's follow-up models, the sedan-like HiPhi Z and the cheaper HiPhi Y couldn’t reverse the company's fortunes.

Now, with production lines silenced, many wonder if HiPhi can make a comeback. Restarting manufacturing may prove more difficult than it seems. Rebuilding public trust and restoring lost investor confidence will take far more than fancy press releases. We’ll know in 6 months whether HiPhi will join the ranks of other failed EV ventures or pull off a surprise turnaround. For now, at least, the electric future looks much dimmer for this once-bright Chinese star.

Via