(Yicai) Feb. 23 -- HiPhi said it suspended some services at the start of this week as a result of the pressures and challenges it is facing. Media reports last weekend said the luxury electric car company had halted production for up to six months.

The services temporarily affected include vehicle charging facilities and free charging via HiPhi’s app, the Shanghai-based company said in a statement yesterday, adding that it is actively taking steps to alleviate the situation.

According to the announcement, HiPhi is working hard to ensure the normal operation of after-sales services, maintenance of the Internet of Vehicles, the car control function of its app, and its online community. Yueda Zhichuang New Energy Vehicle, a unit of carmaker Yueda Group, will work with HiPhi to ensure its after-sales services, it noted.

Media reports broke the news on Feb. 18 that HiPhi was suspending auto production for six months, with immediate effect. A labor supplier to the firm laid off more than 100 staff who worked at its Yancheng plant, Yicai subsequently learned.

Earlier rumors said HiPhi had defaulted on supplier payments and stopped production. On Jan. 2, the company rebutted a rumor that it had ceased all work and shipments, and new project development had stopped. HiPhi said it was operating normally, while development, production, marketing, and deliveries were also progressing as usual.

Poor sales lie behind HiPhi’s difficulties. It sold only 4,237 units in 2021 and 4,349 a year later. After launching a lower-priced model, the HiPhi Y, sales increased to 8,681 last year, but that was not enough to support the company’s sustainable operation.

Human Horizons Technology, which owns the HiPhi brand, was set up in 2017. HiPhi has three models priced between CNY339,000 and CNY800,000 (USD47,150 and USD111,200) apiece.

Editor: Martin Kadiev