- Human Horizons, who owns HiPhi, filed for bankruptcy after failing to cover its debts.
- The company entered a court-drive reorganization phase, as a final effort to be saved.
- HiPhi halted production last February, with all rumored takeover deals being unsuccessful.
The EV market in China is very competitive, making it extremely hard for automakers to stay afloat. Human Horizons Group Inc, the company behind premium EV startup HiPhi, entered a restructuring process, following a long period of financial hurdles.
Human Horizons recently filed for bankruptcy to a People’s Court in Yancheng, China, admitting its inability to cover debt as of April 30. The court, located in the same city with HiPhi’s manufacturing facilities, accepted the application on August 8, ordering the company to enter a reorganization phase.
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Following the confirmation of Human Horizons’ insolvency, an administration will be set to oversee the restructuring process for the next six months. As reported by Car News China, this can be seen as the last effort for HiPhi to avoid complete bankruptcy, taking advantage of its assets to attract potential investors.
The problems for HiPhi surfaced in February, when the premium EV startup suspended production for six months, following a devastating sales performance in 2023 with less than 8,000 deliveries. The company promised to pay employees for a few weeks before downgrading their salary to the minimum wage.
HiPhi Y
In April, Changan-owned Avatr declined rumors about reaching a deal with HiPhi. It has also been rumored that the company conducted talks with FAW Group, although nothing was made official.
The most promising takeover deal reports surfaced in May when a company called iAuto Group allegedly wanted to resume HiPhi production. However, concerns about the financial stability of the potential investor didn’t allow the deal to flourish, as with earlier investment opportunities from Saudi Arabia.
As reported by Bloomberg, more than 100 brands are fighting for a share in China’s EV market. The price wars and decreasing demand of recent years brought many of them to the brink of collapse – especially those not backed by a large automaker.
Human Horizons was founded in 2017, although HiPhi didn’t launch its first model until 2020. Over the years, the EV maker rolled out three EVs – the Z sedan, and the X and Y SUVs. The former also served as a base for the performance-focused HiPhi A. The same applies to HiPhi’s planned rollout in Europe, which was announced in 2023.
