Chinese electric vehicle maker Human Horizons Group Inc., the company behind the premium HiPhi brand, has filed for pre-bankruptcy restructuring — becoming another victim of China’s cutthroat auto market.
The manufacturer lodged an application to a People’s Court in Yancheng, the eastern Chinese city where its factory is located, saying its assets could no longer cover debt as of April and fulfilled the conditions for a bankruptcy, according to a court document published Thursday.
The court ruled that Human Horizons met the conditions for a restructuring, and will appoint an administrator to oversee the process for six months, with the possibility to extend for another three months, the document said.
The struggling EV maker has suspended production since February after closing stores and being unable to pay suppliers due to years of poor sales. It delivered fewer than 8,000 of its luxury EVs in 2023.
The plight of HiPhi shows the challenge facing carmakers in China, where more than 100 brands are embroiled in a price war amid slowing consumer demand due to the sputtering economy and the end of a national EV purchasing subsidy in 2022. Other smaller players, including WM Motors Holdings Ltd and the EV arm of real estate developer China Evergrande Group, are also on the brink of collapse.
Human Horizons had tried to find outside help, with Chinese media reporting in May that a company called iAuto Group had agreed to provide $1 billion in funding to rebuild its team and resume production. That deal appears to have stalled given the company’s move towards bankruptcy proceedings. –BLOOMBERG