"Effective immediately, cease all operations for 6 months!"

Starting from the year 2024, the new energy vehicle industry has been hit with a major shock. On February 18th, HiPhi Motors officially announced that the company will halt all operations for the next 6 months.

However, some internal employees responded: "It's all rumors, the company is operating normally, and there is no suspension of work."

In fact, as early as February 7th, during an internal staff meeting at HiPhi Motors, the company announced that it would postpone the payment of last month's wages, and the year-end bonus for 2023 has also been canceled.As a high-end electric vehicle company, HiPhi Motors, though not as exposed as "NIO, XPeng, and Li Auto," is well-known in the automotive industry due to its founder, Ding Lei, who is a prominent figure with 30 years of experience in the automotive industry.

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On February 22nd, Ding Lei, along with the company's executives, appeared in Shanghai and stated:

"If the company were to collapse, none of us would be willing to accept it, so we must seize the three-month window period to strive to save the company."

The "implosion" of HiPhi Motors was not an overnight event; there were actually signs that everything had been leading up to it.In the second half of 2023, rumors circulated online that the company was laying off a large number of employees, with the layoffs accounting for 20% of the total workforce, and in some departments, it could reach up to 50%.

However, the company directly responded: "This is not the case. It is merely an internal business transformation, with the consolidation and reconstruction of departmental positions, along with the elimination of the bottom performers, leading to personnel turnover, which is a normal phenomenon. At the same time, a large number of positions are also being continuously recruited."

At the beginning of 2024, on social platforms, there were again rumors that "the brand has halted all operations, with production, research and development, and other work having ceased."

But the company responded: "The company's operations are all normal, and the erroneous information has caused damage to the brand's reputation, and we will pursue the legal responsibilities of the relevant personnel."

Subsequently, a few days before the Spring Festival, the company held a staff meeting and announced during the meeting that salary payments would be delayed, the previous year's year-end bonuses would be voided, reimbursements would be overdue for three months, and suggested that employees seek their own ways out.A former employee of Hohe has stated:

"After working at Hohe for a year and advancing nearly 20,000 yuan, I resigned at the end of January. To this day, the reimbursements owed to me, along with a month's salary, have yet to be processed."

This time, Hohe Automobile does not deny the issue but acknowledges its occurrence, also stating that, in response to challenges, the company is implementing measures such as salary reductions for middle and senior management and temporary salary deferrals, based on the actual situation of the company.

Suppliers collaborating with the company have also had a premonition.

It is reported that the brand has been in long-term cooperation with an advertising company, involving amounts in the millions, but since 2023, the company has repeatedly delayed payments to the advertising company for its outstanding debts.The boss who provided about 2 years of R&D and testing services for HiPhi recalled: "At the beginning of our cooperation, the brand paid quite promptly, but after 2023, the company's budget gradually decreased, and the 700,000 yuan balance from the previous year has been outstanding without settlement."

Feeling "something was amiss," the boss basically terminated the cooperation between the two parties in mid-2023 and repeatedly demanded that HiPhi settle the outstanding payments immediately.

Another supplier stated: "In November 2023, a HiPhi car salesman approached me, hoping to offset the debt with cars."

Although the company owes a significant amount of money to suppliers, there are delays in payments across various aspects, from product testing to market marketing.

In addition, some of HiPhi's stores in cities such as Chengdu and Guangzhou have long been closed.On January 23rd, a well-known square in Guangzhou issued an announcement stating: "Due to poor management, High Harmony Automobile is unable to sustain store operations and has closed down the store."

It also pointed out that before High Harmony closed the store, not only was the contract not due to expire, but they also did not inform the shopping mall as required in advance.

In other words, High Harmony Company is willing to break the contract and offend the shopping mall in order to close the store at the fastest speed.

The car store in Chengdu is also the same, the shopping mall management department said: "On January 29th this year, the car store suddenly informed that due to the company's financial difficulties, it is unable to bear the costs of operating in this shopping mall."

Looking back at the development of the company, its decline was a foregone conclusion from the beginning.HiPhi is a "distinctive" presence among the new forces in the automotive industry.

HiPhi is a subsidiary of Human Horizons, which was founded by Ding Lei.

Ding Lei used to work at SAIC Group, and as the group grew and developed, he also evolved from a junior staff member to the vice president of the company.

Later, Ding Lei joined LeEco, serving as the co-founder of LeEco Supercar, becoming a teammate of the "Jia the Great Deceiver."

Just two years later, Ding Lei had a "parting of ways" with Jia Yueting.Interestingly, it is noteworthy that when the collapse of HiPhi occurred, Jia Yueting, on the other side of the ocean, was clapping in celebration within his circle of friends, but that is a story for later.

In 2017, Ding Lei, who had rich experience and connections in the automotive field, decided to go solo. He established Human Horizons, officially entering the new energy vehicle race.

Two years later, the brand launched its intelligent pure electric vehicle brand—HiPhi Automobile.

At the same time, Ding Lei announced that the brand was targeting the high-end pure electric vehicle market priced between 600,000 and 800,000 yuan, a price far exceeding that of most new energy vehicles, and claimed that HiPhi Automobile was not just a little better than Tesla.

HiPhi has three vehicles for sale: the HiPhi X standard version is priced at 570,000 yuan, with the top configuration at 800,000 yuan; the HiPhi Z ranges from 510,000 to 630,000 yuan.The most affordable HiPhi Y from Heimerdinger is a mid-to-large-sized SUV, with a price tag that is still not cheap, ranging from 339,000 to 459,000 yuan.

In contrast, the prices of NIO and Li Auto, which are also positioned in the high-end market, are much more "approachable".

The starting price of NIO's ES8 is 448,000 yuan, while the ES6 is priced at 358,000 yuan; Li Auto's Li ONE is priced at 349,800 yuan.

Xiaopeng Motors, targeting the mid-range market, offers even lower prices, with the G3 model starting at 227,800 yuan.

The "exorbitant" prices of Heimerdinger vehicles have earned them the title of "high-end pure electric ceiling".For such a high price, the founder stated:

"In the market, there are approximately 1.2 million cars priced over 500,000 yuan. If 30% of them are converted to electric vehicles, that would be 400,000 units. Currently, there are not many parking spaces for cars priced at 500,000 yuan. If 10% of people choose to buy a HiPhi, the monthly sales would exceed 2,000 units."

However, the actual sales situation is not as rosy as imagined.

Data shows that in 2021, HiPhi sold a cumulative total of 4,237 units, and in 2022, the cumulative sales were 4,349 units.

After the HiPhi Y was launched in July 2023, there was a certain increase in sales. From August to October, over 4,183 cars were sold in three months.However, this sales volume cannot change the downturn of HiPhi Motors, and it is far from being able to compete with other brands.

In September 2023, the Zeekr 001 sold 8,701 units; the NIO ES6 had sales of 7,896 units; the Tesla Model Y was even more exaggerated, with sales as high as 41,000 units.

The huge sales gap has made it difficult for HiPhi Motors to catch up, but what followed was even worse.

At the beginning of 2024, a fierce price war broke out among new energy vehicle manufacturers.

First, BYD launched the Qin PLUS and Destroyer 05 Glory versions, starting at a price of 79,800 yuan, and the newly launched Qin PLUS Glory version was even 10,000 yuan cheaper than the old version, yet the main configurations remained the same.Afterwards, various car manufacturers began to announce price cuts.

Hyundai's fuel-powered vehicle, the Elantra, had its price reduced to 75,800 yuan, and it proclaimed "oil is stronger than electricity," countering BYD's slogan "electricity is cheaper than oil."

Wuling Hongguang's Wuling Starlight, a plug-in hybrid sedan, has its entry-level model discounted to 88,800 yuan.

At the same time, Geely, Changan, Nio, Zero Run Automobile, and Denza all joined the price war, offering some discounted models.

The price war naturally also affected mid-to-high-end automobiles.In January 2024, Tesla's new Model 3 Rear-Wheel Drive version saw a price drop of 15,500 yuan, down to 245,900 yuan; the prices of the two Model Y variants also successively decreased.

As a result, the sales of HiPhi vehicles became even more dismal.

By January 2024, only 21 HiPhi X units were sold, HiPhi Y sales amounted to 136 units, and HiPhi Z sales reached 75 units.

To be frank, HiPhi has never targeted the "poor" in its sales strategy.

Of course, the "implosion" of HiPhi automobiles, apart from poor sales, is due to other reasons as well.A deputy factory director of a Heimerdinger Automobile factory stated:

“The company has been waiting for new investors to join, and the current issues are all about money. Mr. Ding also lacks funds, otherwise he wouldn't have discussed financing issues with the group's management team on multiple occasions.”

In fact, for Heimerdinger, the number of potential investors is very limited.

At the beginning of the company's establishment, the city of Yancheng in Jiangsu Province set up a special fund for Heimerdinger, aimed at providing financial support, and also rented a traditional vehicle production base, which was then transformed into a new force vehicle production base.

In 2022, Qingdao Urban Investment invested 1.38 billion yuan, participated in its overseas investment, and also assisted Heimerdinger Automobile in building its production base in Laixi.In just a few years, Hozon New Energy Automobile has secured billions of dollars in investment, but this is not enough to sustain the company's long-term operations. With a workforce of over 5,000 people, the company requires a staggering 600 million in operational costs each month.

Moreover, the amount of investment Hozon has raised pales in comparison to other car manufacturing companies.

As of September 2023, NIO has obtained 114.8 billion yuan in funding; Xiaopeng Motors had conducted 11 rounds of fundraising before going public, accumulating a total of 18.8 billion yuan; Li Auto also went through more than 10 rounds of financing before its IPO, securing a total sum exceeding ten billion yuan.

In an effort to raise funds, in 2022, Hozon proposed a plan to go public. However, due to poor vehicle sales and insufficient revenue, the company failed to meet the listing requirements, forcing the IPO plan to be aborted.

Although the founder, Ding Lei, had previously stated that the company did not need to raise funds from society or through Series A, B, C, and D rounds, Hozon New Energy Automobile now has no choice but to lower its stance and actively seek investors.Soon, Heimerdinger sought out Middle Eastern capital. In June 2023, the Saudi Investment Ministry and Human Horizons finalized a $5.6 billion cooperation plan and signed an agreement, with both parties jointly developing, manufacturing, and selling electric vehicles.

However, this agreement did not have legal effect, and the two sides only reached a preliminary intention.

It is said that the Saudi Investment Ministry is investing in a car manufacturing company in the United States and has established a factory, but when Heimerdinger's funds will be in place is still unknown.

Nevertheless, in October of the same year, the Saudi Arabian Sovereign Wealth Fund also revealed its intention to invest $250 million in Human Horizons.

The Saudi Arabian Sovereign Fund also sent personnel to conduct on-site inspections of two of Heimerdinger's factories, understanding the scale and production capacity of the factories, but did not make an investment immediately.Funding could not be secured in time, and new financing has been elusive, forcing HiPhi Motors to resort to financing leases out of desperation.

At the end of 2023, Human Horizons transferred the ownership of HiPhi Motors' production equipment, car-making molds, and related items to other enterprises, thereby obtaining working capital.

The two companies providing financing leases to HiPhi are both backed by state-owned enterprises in Yancheng City.

However, Ding Lei has not given up on seeking new investment targets.

It is said that before the New Year, he still led his team to Saudi Arabia and Qingdao to seek financial support.If capital is the key to the survival of new force enterprises, then technology is the foundation of their establishment.

Although HiPhi Motors positions itself as a high-end automobile brand, it lacks the core strength of a high-end car.

The so-called luxury vehicles of HiPhi Motors are not independently developed but are "pieced together" from various sources.

For example, the HiPhi X model has a chassis provided by a supplier, a ternary lithium battery from CATL, front and rear motors from Bosch, and the manufacturing is outsourced to Yueda Kia.

Moreover, HiPhi Motors uses cool hardware devices to reflect luxury, such as customizable lighting systems, gull-wing doors, and a three-screen interactive entertainment system in the front row, all of which are realized through suppliers.Even scandals such as "rebranded audio systems" have occurred.

The "moat" formed by money not only fails to protect the brand but also disappoints consumers, wasting the value of the high-end brand of High Hopes Automobile.

In contrast, other car manufacturers study consumer needs and meet them through self-development.

Tesla spent 17 years updating three generations of products, real-time operating systems and chips, and enhancing terminal development capabilities, which has made the brand unassailable in the industry.

Through integrated casting technology, Tesla has also simplified the production process, increased production efficiency, and reduced the cost of the Model Y by 40%.Xiaopeng Motors also plans to allocate over 40% of its R&D budget by 2024, focusing on AI technology centered around intelligent driving, with an investment of 3.5 billion yuan.

NIO, on the other hand, plans to add 20,000 charging piles and 1,000 battery swap stations by 2024.

It is evident that an unbreakable technological barrier is what allows new force automakers to have a place in the competition.

The new energy vehicle industry has now entered a phase of elimination. The year 2024 marks the first year of this elimination round and also the first year of "do-or-die" competition among Chinese automakers.

The current competition is no longer a stage where a brand can rest easy just because one or two models are popular; it requires sustainable funding, unique technology, and the ability to produce at scale.However, at present, HiPhi Motors cannot consider so much; for it, whether it can secure a substantial amount of funding within three months is the key.

After all, only by surviving first can there be a chance to "take a seat at the table."