Human Horizons, the parent company of luxury EV brand HiPhi, has entered the pre-reorganization phase after filing for bankruptcy, marking a critical moment in China’s new energy vehicle (NEV) sector. The company, struggling financially, halted production nearly six months ago.
The Yancheng Economic and Technological Development Zone People’s Court accepted the pre-reorganization application on August 8, 2024. The court’s decision, which cited Human Horizons’ inability to cover its debts exceeding its assets as of April 30, 2024, acknowledged the company’s insolvency but noted its potential for restructuring.
During the six-month pre-reorganization period, which can be extended by three months if necessary, Human Horizons must cooperate with administrators to safeguard assets, manage operations prudently, and attract strategic investors. This period is seen as a last-ditch effort to avoid complete bankruptcy through a new court-supervised rescue mechanism, which aims to reduce restructuring costs and revive valuable but troubled enterprises.
HiPhi had suspended operations in February 2024, promising to pay employees’ salaries up to February 18. However, by mid-March, only basic wages were being disbursed. Despite these efforts, the company has struggled to recover, signaling potential turbulence in the domestic NEV market.
In May 2024, iAuto Group signed a strategic cooperation agreement with Human Horizons, committing 1 billion USD in funding to rebuild the team and resume production. However, concerns have arisen over iAuto’s financial stability and whether the promised funds will materialize. Similar uncertainties have plagued previous potential investments, such as those from Saudi Arabia.
Founded in 2017, Human Horizons quickly positioned HiPhi as a luxury EV brand, with its first model, HiPhi X, launched in 2020. Despite this, the brand has struggled with sales and operational challenges. Introducing the more affordable HiPhi Y in 2023 temporarily boosted sales but needed more to stabilize the company.
Rumors of Changan Automobile and FAW Group acquisitions have surfaced, with FAW reportedly conducting due diligence on HiPhi. However, the future of HiPhi remains uncertain as it navigates this critical restructuring phase.
