Chinese EV Maker HiPhi Files for Pre-Bankruptcy After 'Years of Poor Sales': Report

Updated: Aug 12 2024, 22:43 PM EDT

Chinese EV maker Human Horizons has filed for pre-bankruptcy following "years of poor sales."

The manufacturer behind the HiPhi EV brand has sent an application for pre-bankruptcy in Yancheng, China, as per Automotive News Europe. The document stated that the company could no longer cover its debt since April, according to a court.

The court also said that Human Horizons has met the requirements for restructuring and that it will hire an overseeing administrator for its six-month process. However, it's possible to extend the process for three months.

After struggling to pay suppliers due to poor sales and numerous store shutdowns, the Chinese automaker halted its production. The company reportedly delivered less than 8,000 of its EVs in 2023, highlighting the challenges and competition of the Chinese automotive industry.

The Business Times reported Monday that Human Horizons has also sought debt financing for up to 300 million yuan ($55.4 million) to resume production at its EV plant.

A similar pre-bankruptcy procedure was also made by another Chinese EV maker, China Evergrande, according to Reuters last week. The Chinese court concluded that two of the manufacturer's subsidiaries be reorganized, reducing the EV group's shares by 7.9%.

HiPhi was established in 2019 and has expanded in Europe in 2023 by selling its two models, the X large SUV and Z GT Sedan, in Germany and Norway. Furthermore, the company promoted its brand at the IAA Mobility auto show in Munich last September.

In other news, South Korean lawmakers introduced a bill that would increase firefighting resources near EV charging stations. The initiative was made after a Mercedes-Benz exploded inside an apartment complex in Incheon, Seoul.

The investigation discovered that the cause of the fire was the vehicle's lithium-ion battery, developed by the Chinese battery supplier Farasis Energy.