China's High-end EV Company Facing Crisis Amid Acquisition Rumors

Chongqing—Ding Lei, CEO of HiPhi, which recently faced financial crisis turmoil that rattled the automobile market, met with Zhu Huarong, the chairman of Changan, on February 27.

HiPhi, perhaps China's most expensive EV brand, is going through a financial crisis. (Photo/HiPhi)

Changan Automobile, one of China's automotive giants, confirmed this meeting to Bridging News. Earlier rumors suggested that Changan might acquire a 51% stake in HiPhi. However, Changan stated, "It was unclear if the two leaders talked about the acquisition."

HiPhi, a Chinese EV brand established in 2017, made an immediate mark in the high-end EV market with its initial models priced at over 500,000 yuan (nearly USD 70,000). In 2023, HiPhi sold over 8,000 cars. 

However, the company encountered financial difficulties. On February 18, an insider revealed that production had been halted and performance-related salaries were no longer being paid.

In a February 22 speech to employees, Ding stated, "HiPhi has a window of no more than three months to turn the situation around. Many companies are interested in HiPhi, whether for acquisition or investment, and I will actively pursue these opportunities."

The crisis at HiPhi suggests an impending reshuffle in the new energy vehicle sector. Wang Jun, CEO of Changan Automobile, previously mentioned that during the peak period, over 300 Chinese companies were vying for car manufacturing qualifications, with 62 of them focusing on new energy strategies. Only 17 of these manufacturers have recorded actual sales figures, with most selling fewer than ten thousand units annually.

"The concentration in the new energy vehicle industry will rapidly increase, and by 2024, the top ten companies are expected to hold more than 85% of the market share," predicted Wang Jun.

(Fan Hongyi, as an intern, also contributed to this report.)