Chinese EV Brand Hycan Dismisses All Employees of Shanghai Branch

On November 15th, according to Chinese media Yicai, the Chinese electric vehicle startup Hycan has dismissed all employees of its Shanghai branch and has delayed paying severance compensation to the laid-off employees. Several former employees of Hycan’s Shanghai branch who have already left their positions told reporters, “Originally, it was agreed to pay the N+1 severance compensation by October 31st, but now it’s been over two weeks past the deadline and the compensation has not been paid, dragging on.”

Furthermore, multiple laid-off employees of Hycan mentioned that after a significant round of layoffs in July, only over 50 employees remain at Hycan’s Guangzhou headquarters to maintain the basic operations of the company. The remaining employees are expected to be relocated to the Nansha district office, and there are potential plans for company restructuring.

As of the time of writing, Hycan has not responded to inquiries.

As early as June of this year, several car owners had reported that almost all of Hycan’s sales channels in Shanghai had ceased operations, including the experience centers in shopping malls and the branch office phones going unanswered. On September 10th, the Shanghai Market Supervision Administration listed Hycan’s Shanghai branch as having abnormal operations, as they were unable to contact the registered address or business premises.

At Hycan’s Guangzhou headquarters, former employees initiated a rights protection campaign in June of this year, demanding the return of their investment funds. Between 2018 and 2021, Hycan implemented an employee stock ownership plan for core and mid-level employees, with over 50 investors, totaling more than 100 million yuan. However, due to current financial issues at Hycan, they are unable to refund the investment funds of the employee stock ownership plan.

Currently, shares totaling over 125 million yuan held by Hycan in GAC Passenger Vehicle Co., Ltd. have been frozen. Additionally, Hycan is facing lawsuits from over 15 suppliers or service providers for contract disputes at the Nansha District People’s Court in Guangzhou.

Hycan, formerly a joint venture between GAC Group and NIO, was restructured in 2021. Currently, the two largest shareholders of Hycan are Guangdong Zhujiang Investment Management Co., Ltd.’s subsidiary Guangdong Zhu Intelligent Technology Investment Co., Ltd., and a wholly-owned subsidiary of GAC Group, GAC Aian. According to GAC Group’s October production and sales data, in October, Hycan’s sales were below 110 vehicles, a year-on-year decrease of 82.37%; from January to October this year, Hycan’s cumulative sales were below 4388 vehicles, a year-on-year decrease of 83.32%.

Currently, Hycan offers four pure electric vehicle models, including Hycan 007, Hycan Z03, Hycan A06, and Hycan V094, with prices ranging from 100,000 to 400,000 yuan. Their product lineup includes sedans, SUVs, and MPVs.

To boost sales, Hycan launched the “Resident Assistance Program” in March of this year, requiring employees to assist various dealership stores in sales and implementing detailed incentive and penalty mechanisms. Additionally, Hycan’s major shareholder, Guangdong Zhujiang Investment Management Co., Ltd., mandated its three major real estate groups to implement a plan to sell cars on its behalf, engaging in “dual sales of real estate and cars.”

Previously, Hycan’s director and co-president Yang Ying, in an interview with First Financial, mentioned that the competition is particularly fierce now, and in the future, only about three companies following Tesla’s large-scale standardization route in the electric vehicle industry will survive. He believes that as a new force in the automotive industry, Hycan needs to temporarily avoid direct confrontation with Tesla and take a route of differentiated competition.

Yang Ying stated, “Hycan’s strategy is to win where we can win, and retreat where we can’t. We shouldn’t directly compete head-on with Tesla. We should observe what Tesla is doing and temporarily avoid it. Tesla’s main price range is for cars and SUVs priced between 200,000 to 250,000 yuan. Currently, apart from the products already on sale, Hycan will not touch this market for the time being.”

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