Ding Lei, who has not appeared in public for a long time, appeared in the official live broadcast room of HiPhi Cars a few days ago and debunked rumors of running away.

According to Caixin, HiPhi is currently undergoing pre-restructuring rather than bankruptcy. The company is currently in the recruitment stage of strategic investors and has established a new company in Yancheng, Jiangsu, starting a new after-sales service.

According to the "HiPhi Temporary Administrator" official account, as of September 14, a total of five affiliated companies of HiPhi have filed pre-restructuring applications and have been successively approved by the court. Among them, HiPhi Technology (Jiangsu) Co., Ltd. and HiPhi Holdings (Shanghai) Co., Ltd. have merged for pre-restructuring; HiPhi Investment Co., Ltd., HiPhi (Shandong) Technology Co., Ltd., and HiPhi (Qingdao) Automobile Sales and Service Co., Ltd. have merged for pre-restructuring.

From building the car of dreams to finding a way out, Ding Lei's 2024 is destined to be difficult.

"When I looked around but couldn't find the car of my dreams, I decided to build one myself," he said.

In 2017, at the age of 54, Ding Lei decided to personally get involved in car manufacturing. When asked why he chose to start a new venture at this age, he quoted a statement by Ferdinand Porsche.

From the very beginning, Ding Lei had no intention of merely going through the motions of car manufacturing. He aimed to create something extraordinary, not just another mediocre product. He wanted to break free from the past and become a game-changer in the automotive industry, guiding the way towards a new world. This was his unwavering vision and philosophy.

In 2018, the HiPhi car development team presented seven clay models of vehicles. While there was little disagreement during internal discussions, Ding Lei carefully considered each model and ultimately rejected them all. He was determined to create a masterpiece, not just a simple commodity.

To balance handling and comfort, Ding Lei instructed the technical department to adjust the chassis over 100 times. The shock absorbers contained dozens of valve plates, each of which required meticulous adjustment. Each valve plate was just a few millimeters thick, stacked one on top of the other, with precisely millimeter-sized holes drilled in them.

Ding Lei's obsession with detail and passion for technology made his vision of creating the world's first luxury tech brand a reality.

In 2020, HiPhi's first model, the HiPhi X, was launched with a top price of 800,000 yuan. At that time, BYD had not yet launched its premium brand, and other self-proclaimed high-end brands like NIO and Li Auto would likely have been silenced by HiPhi's impressive specifications:

The interior resembled that of a Rolls-Royce; the audio system was from Meridian, a renowned British brand; the carpet was made of imported wool; the leather seats were sourced from Dow Chemical; and the headlights were the same as those found on the Mercedes-Benz S-Class. Additionally, the car featured an upward-opening NT tailgate, programmable headlights, and rear-wheel steering.

Ding Lei, a physicist by training, is a typical engineer's personality. He is usually low-key, introverted, and not talkative. However, to support brand promotion, he had to adopt a more high-profile approach, which was quite a departure from his usual demeanor. In fact, many of the current promotional tactics used by automakers are reminiscent of strategies he employed in the past.

For example, when he said, "We define luxury through technology, and I am still reluctant to settle for an 800,000 yuan price tag," this subtle yet assertive expression was undoubtedly more palatable than the common claim of "the best car under X yuan."

Similarly, when piggybacking on the popularity of competitors, Ding Lei's strategy was more civilized and sophisticated than the mutual insults and attacks commonly seen among automakers today.

On September 4, 2020, Ding Lei took out three giant billboards in Times Square, New York; Leicester Square, London; and Shibuya Crossing, Tokyo, to address Tesla, Porsche, and Dyson. His message was ambiguous yet sharp:

"Hello, Tesla. You said, 'If someone builds a better electric car, it will be good for the world.' So, here we are."

"Hello, Porsche. You said, 'I couldn't find the sports car of my dreams, so I decided to build one myself.' We understand how you feel."

"Hello, Dyson. You said, 'It takes unwavering belief to turn an idea into reality.' We've proven you right."

Ding Lei's vision and aspirations for both product design and brand positioning are exceptionally high, arguably unparalleled in the Chinese automotive industry. This is largely attributed to his early experiences.

As a legend and pillar of the Chinese automotive industry, Ding Lei has overseen the development of over two dozen car models since the early days of the Santana. Having seen it all, he can no longer be satisfied with creating just another conventional car when venturing out on his own.

On February 18, 2024, the first day back to work after the Lunar New Year holiday, HiPhi Cars was reported by the media to be suspending production for six months. Although HiPhi denied this news, the company's current operating status suggests that it has essentially lost its competitive edge and viability.

According to data from Autohome, HiPhi sold a total of 4,520 vehicles in 2022, with an average monthly sales volume of less than 400. To expand its market share, HiPhi launched its third model, the HiPhi Y (a mid-to-large SUV), in July last year, priced between 339,000 and 449,000 yuan. However, this strategy to save oneself through market penetration has failed to yield results. The latest data shows that in December 2023, the total delivery volume of HiPhi's three models was only 564 units.

At the current delivery level, HiPhi has already failed, regardless of whether it suspends production or not. Looking back, this outcome is entirely reasonable, as Ding Lei never truly had a clear plan from the start. Many of his choices and decisions even contravened common sense and principles.

For instance, he vowed to create a masterpiece rather than a mere commodity. However, the task of opening up the imagination of smart electric vehicles for humanity had already been accomplished by Tesla. HiPhi, which only launched its product in 2020, clearly no longer had such a mission or opportunity. Having missed the right timing, no amount of effort could fully compensate, especially as HiPhi relied more on stacking materials to elevate itself rather than disruptive technological innovation and revolution.

Moreover, scale has always been crucial in the automotive industry, with the widely recognized breakeven point for electric vehicles set at 500,000 units. As someone who has navigated the industry for decades and achieved significant accomplishments, Ding Lei cannot be unaware of this fact. Yet, he has stated that he will not compromise on scale and dislikes the term "high volume," which seems to challenge established norms.

Furthermore, car manufacturing is an extremely costly endeavor. Companies like NIO, Li Auto, and XPeng have raised tens of billions of yuan, while traditional automakers like Geely, Great Wall, and BYD have leveraged their existing businesses for funding. In contrast, HiPhi's only publicly available financing information is a strategic investment of 5 billion yuan from the Shanghai Branch of Bank of Communications in November 2021. Crucially, HiPhi does not seem overly concerned with cash reserves, and Ding Lei has repeatedly stated that the company is not short of funds, potentially misjudging the industry and market conditions.

Lastly, by directly promoting itself in the international market and challenging companies like Tesla, Porsche, and Dyson without first establishing brand recognition in the domestic market, HiPhi appears to be rushing into things and aiming too high.

There are two fundamental reasons for all these problems.

First, Ding Lei has won too many battles in the past, and now he wants a bigger victory. He has strayed further and further down the path of idealism, widening the gap between his aspirations and reality. Sometimes, he wants too much and pushes too hard, resulting in overreach.

Second, despite his illustrious decades-long career, Ding Lei has always worked as an employee, backed by a powerful organization. Entrepreneurship is an entirely different beast, and Ding Lei is still navigating the unfamiliar territory. He needs time to grow and mature through experience.

At over 50 years old, Ding Lei dared to step out of his comfort zone, abandon the security of a stable job, and venture into the cutthroat business world. Regardless of the outcome, his bravery and determination deserve recognition. Success is not accidental, and failure is not fate. It is hoped that he will continue to uphold this perseverance and determination and embark on a new journey.

Disclaimer

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