HiPhi's high hopes face reality with parent company entering bankruptcy

The electric vehicle industry in China, while brimming with potential and breaking sales records, is also known for its fierce competition. One of its better-known contenders, HiPhi, once lauded as one of the most exciting players on the block, now faces a bleak future as its parent company, Human Horizons, grapples with bankruptcy.

The Yancheng Economic and Technological Development Zone People's Court made the announcement on August 8, 2024, acknowledging Human Horizons' financial woes. The company's liabilities had outweighed its assets since April 30, 2024, forcing it into a pre-reorganization phase - a critical six-month window that offers a final chance for restructuring, but gives no guarantees.

HiPhi, which ceased operations earlier this year, had attempted to stabilize its finances and fulfill obligations to its employees. But despite paying basic wages until mid-March, the company's troubles persisted.

Hopes were briefly ignited when iAuto Group pledged a substantial investment of $1 billion in May 2024, aimed at revitalizing HiPhi's operations and workforce. However, doubts persist about iAuto's own financial stability and whether this promised lifeline will truly materialize. This uncertainty echoes previous investment prospects that ultimately fizzled out, including a potential deal from Saudi Arabia.

Human Horizons, founded in 2017, entered the market with high ambitions. Its first model, the HiPhi X, launched in 2020, was positioned as a high-end luxury EV. However, the brand never quite got its sales it needed to overcome the operational challenges. While the introduction of the more affordable HiPhi Y in 2023 briefly boosted sales figures, it proved insufficient to address the company's underlying financial strain.

As Human Horizons navigates the treacherous waters of restructuring, rumors of potential acquisitions have surfaced. Changan Automobile and FAW Group, two significant players in the Chinese automotive landscape, have been linked to HiPhi, with FAW reportedly conducting due diligence on the brand.

Via