In June, we reported that former Nio brand Hycan was about to go bust. It seems that the brand is now in its final death throes. Despite being headquartered in Guangzhou, the brand was not displayed at this yearβs Guangzhou Auto Show. In contrast, at last yearβs show, Hycan bought a new MPV model, the V09.
The main problem is lack of money, which stems from sluggish sales. According to the latest news, Hycan has laid off all employees in the Shanghai branch and defaulted on compensation for laid-off employees.
The official social media account for Hycanβs Shanghai direct store stopped updating in May. Reportedly all sales channels in Shanghai were suspended during June and no one answered phone calls to the experience center or the branches.
Laid-off employees claim that only about 50 staff are left at the Guangzhou headquarters to maintain the companyβs basic operations, and the current employees were moving to Nansha district to work. Furthermore, employees claim that they had negotiated with the company for a compensation package to be paid before October 31, but this has not been paid for half a month and has been further delayed.
Layoffs began as early as April this year, with reports indicating that 50% of staff were laid off then. By July, the company still had around 600 employees, but the factory was already shut, and production and sales plans were suspended.
The current situation, with just a few dozen employees remaining, may even date back to the end of July.
As we previously reported a number of βsolutionsβ have been forced upon employees. In a scheme implemented between 2018 and 2021 Hycan enforced employee stock ownership plans on various employees borrowing an amount in the region of 100 million yuan (14 million USD). When an earlier round of layoffs began in July 2023, the company promised employees that as long as they agreed to resign, they would be refunded their shares. This, however, has not happened and has resulted in protests in June of this year.
Furthermore, employees were forced into the showroom to try to sell cars from March this year. Those who succeeded received bonuses, whereas those who did not received reductions in their salary.
It is not only employees that Hycan owes money to but also suppliers. So far this year, more than 100 cases have been filed in which Hycan is a defendant.
Hycan started life at the end of 2017 as a joint venture between GAC and Nio, with both GAC Group and GAC New Energy, now GAC Aion, taking a share in the company. Under the agreement, GAC was responsible for R&D and production of the cars while Nio provided technology and EV infrastructure. Through the JV Nio was hoping to enter the mass market while GAC was hoping to go more premium, which already sounded like a disconnect.
Nioβs share progressively dwindled from 2020 as the company suffered severe financial pressures. In 2021, Zhujiang Investment Management (aka Guangdong Pearl River Investment Management Group) became the largest shareholder, with Nio holding just 4.5%. The following year, Nio withdrew completely.
Currently, Zhujiang holds a 68.56% share of the brand, GAC Aion 20.54% and GAG Group 4.46%.
Source: Fast Technology
