Well-known new car company HiPhi Auto was exposed to layoffs, once claiming to beat Tesla and kick Porsche

Recently, some media and netizens broke the news that HiPhi, a well-known new energy vehicle company in China, has carried out large-scale layoffs, with the proportion reaching 20%, and some departments have even been laid off by 50%. This is the first time in HiPhi's history that there has been such a large-scale layoff. In response, HiPhi has not responded positively, but only stated that the rumors are untrue. The unclear answer immediately caused the outside world to question HiPhi's financial situation, sales performance and market prospects.

HiPhi Auto was founded in 2019, and its parent company is Human Horizons. Its founder Ding Lei has served as vice president of SAIC Group, general manager of Shanghai General Motors, deputy mayor of Shanghai Pudong New Area, and co-founder and CEO of LeTV Supercar in China. HiPhi Auto uses the slogan "The New Ceiling of Chinese Luxury Brands" and has launched two products positioned as luxury all-round smart pure electric supercar SUVs: HiPhi X and HiPhi Z. The prices of these two models are both above 500,000 yuan, with the highest reaching 800,000 yuan, making them the most expensive domestically produced electric vehicles.

In the early days of new car delivery, HiPhi did achieve some success, briefly ranking second in the sales list of luxury brand electric vehicles priced above RMB 500,000, surpassing Mercedes-Benz, BMW and Audi, and second only to Porsche Taycan. HiPhi once declared war on Tesla and Porsche on billboards in New York's Times Square, London's Leicester Square, and Tokyo's Shibuya Center.

However, HiPhi's sales have been unsatisfactory since then.

The cumulative sales volume for the whole year of 2021 reached 4,237 units, and the sales volume for the whole year of 2022 reached 4,349 units. In the first eight months of 2023, HiPhi Auto did not release sales data. It was not until September that HiPhi Auto announced the sales volume of 1,735 units, of which HiPhi Y sold 1,556 units, accounting for the majority of the sales, but it ranked only 125th in SUV sales. The sales volume of HiPhi X and HiPhi Z were only 25 and 154 units respectively.

Judging from past experience in the automotive industry, luxury brands also need sales to support them. So-called luxury brands with sales of several thousand or several hundred units a year will eventually not escape the fate of bankruptcy and acquisition.

In order to increase sales and reduce costs, HiPhi has also made some adjustments.

On the one hand, we actively introduce external funds. In June this year, at the China-Arab Cooperation Forum, the Saudi Arabian Ministry of Investment and Human Horizons signed a $5.6 billion agreement to establish a joint venture engaged in automobile research and development, manufacturing and sales. Previously, HiPhi also obtained a RMB 5 billion indicative credit line from the Bank of Communications and was rumored to be interested in listing in Hong Kong.

On the other hand, lower-priced models were launched. In July this year, HiPhi Y was officially launched, priced at RMB 339,000 to RMB 449,000. In October, HiPhi Z City Edition was launched globally, with four-seat and five-seat models priced at RMB 530,000 and RMB 510,000 respectively.

However, these measures have not been accepted by the market and consumers. On the one hand, HiPhi's financial situation remains unclear.

According to media reports, HiPhi Auto's suppliers and employees are in arrears with payments. An employee revealed that HiPhi Auto's cash flow has been broken and it can only rely on borrowing money to maintain operations.

On the other hand, HiPhi's brand image and product strength have also been questioned. Although HiPhi is positioned as a high-end brand, its quality and service are somewhat different from its price. Since May 2022, HiPhi has experienced rights protection events such as "audio door" and "quality door", and it has also been revealed that the car machine can read the content of other vehicles' driving recorders. Major privacy loopholes have made high-net-worth users who attach great importance to quality and privacy particularly dissatisfied with the HiPhi brand.

In summary, HiPhi is facing the dilemma of tight funds, low sales and worrying market prospects. Although HiPhi has advantages in design, intelligence and performance, brands such as BYD and Aion are constantly breaking the bottom line of new energy vehicle prices and exploring the upper limit of luxury, providing the general public with a cross-level experience. It is becoming increasingly difficult for HiPhi to find its target market and consumer group.

In the current environment of increasingly fierce competition in the new energy vehicle market, if HiPhi wants to break through, it must adjust its strategy and positioning, find its core competitiveness and differentiated advantages, and enhance its brand image and product strength, so that it can truly become the "new ceiling of luxury brands."

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.