FYI: Chinese electric vehicle maker Human Horizons, creator of the HiPhi brand, has filed for pre-bankruptcy restructuring as it faces financial difficulties.
### Human Horizons Pursues Restructuring Amid Financial Struggles
In a recent development within the electric vehicle (EV) industry, Chinese startup Human Horizons, known for its high-performance HiPhi brand, has initiated pre-bankruptcy restructuring. Bloomberg reported on Friday that the manufacturer filed a restructuring application in a Yancheng court, located in the eastern Chinese city where its production facility is based.
### Financial Crisis and Court Ruling
Court documents dated August 9 reveal that Human Horizons’ liabilities outweighed its assets as of April. The company made a last-ditch effort to secure additional funding, which proved unsuccessful, leading to the restructuring filing. The court ruled that Human Horizons met the criteria for restructuring and appointed a receiver to supervise the process over the next six months, with a possible extension of three months.
### HiPhi Models and Market Presence
Founded in 2019, Human Horizons has brought to market the HiPhi X electric SUV and HiPhi Z electric hatchback. The startup had ambitious plans to launch a third model, the HiPhi A, in 2023. Designed as a high-performance flagship derivative of the HiPhi Z, the HiPhi A was to feature 1,287 horsepower and involve collaboration with Apollo, known for the Intensa Emozione and Project Evo gasoline hypercars.
### Sales and Production Halt
While Human Horizons doesn’t operate in the United States, it began selling its HiPhi X and Z models in Germany and Norway last year. Despite having delivered fewer than 8,000 of these niche vehicles globally in 2023, the company encountered severe financial issues and is currently unable to pay its suppliers. Production was halted in February, and the company subsequently closed its showrooms.
### Competitive Landscape and Market Conditions
Numerous EV startups have emerged over recent years, with many struggling to survive. The competitive environment in China is particularly harsh, as there are over 100 auto brands vying for market share amid an economic slowdown. Additionally, the discontinuation of national EV subsidies in 2022, which had previously boosted sales, compounded the challenges. Despite these difficulties, EVs and plug-in hybrids accounted for the majority of vehicle sales in China for the first time earlier this year.
In summary, Human Horizons’ current financial troubles underscore the difficulties faced by many EV startups in a fiercely competitive and rapidly changing market. The company’s future now hinges on the restructuring process and its ability to navigate these financial challenges.
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Authored by: Donald Smith, Editor of Automotive.fyi
