In June we reported that the former Nio brand Hycan was on the verge of bankruptcy. It seems the brand is now in its final death throes. Despite being headquartered in Guangzhou, the brand was not featured at this year’s Guangzhou Auto Show. On the other hand, Hycan bought a new MPV model, the V09, at last year’s show.
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The biggest problem is the lack of money, which comes from slow sales. According to the latest news, Hycan has laid off all employees at its Shanghai branch and has defaulted in paying compensation for laid-off employees.
The official social media account for Hycan’s direct store in Shanghai stopped updating in May. Reportedly, all sales channels in Shanghai were suspended in June and no one answered calls to the experience center or branches.
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Layoff employees claim that there are only about 50 employees left at the Guangzhou headquarters to maintain the company’s basic operations, and current employees moved to Nansha district to work. Furthermore, employees claim that they had negotiated with the company for a compensation package to be paid by October 31, but this has not been paid for half a month and has been further delayed.
The layoffs started back in April this year, with reports indicating that 50% of staff were laid off at the time. In July, the company still had about 600 employees, but the factory had already closed and production and sales plans were suspended.
The current situation, with only a few dozen employees left, may even date from the end of July.
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As we previously reported, a number of ‘solutions’ have been imposed on employees. In a scheme implemented between 2018 and 2021, Hycan enforced employee stock ownership plans on several employees, lending 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 get their shares back. However, this did not happen and led to protests in June this year.
In addition, from March this year, employees were forced into the showroom to try to sell cars. Those who succeeded received bonuses, while those who did not received a reduction in their salaries.
Hycan not only owes employees money, but also suppliers. So far this year, more than 100 cases have been filed in which Hycan is a defendant.
Hycan started in late 2017 as a joint venture between GAC and Nio, with both GAC Group and GAC New Energy, now GAC Aion, taking a stake in the company. Under the agreement, GAC was responsible for R&D and production of the cars, while Nio provided the technology and EV infrastructure. Through the JV, Nio hoped to enter the mass market, while GAC hoped to become more premium, which already sounded like a disconnect.
Nio’s stock gradually fell from 2020 as the company was under severe financial pressure. In 2021, Zhujiang Investment Management (also known as Guangdong Pearl River Investment Management Group) became the largest shareholder, while Nio held only 4.5%. The following year Nio withdrew completely.
Currently, Zhujiang has a 68.56% share of the brand, GAC Aion 20.54% and GAG Group 4.46%.
Source: Fast Technology