Losing the price war, this Chinese electric car brand went bankrupt

The sweetness of the electric car industry does not necessarily benefit all manufacturers. Otherwise, a Chinese electric car company declared bankruptcy because it was unable to compete.

With more than 100 EV brands competing, Chinese automakers, especially startups with tight financial margins, are finding it difficult to stay away.

Last year the WM brand filed for bankruptcy status. Recently, Human Horizons, the parent company of luxury electric car brand HiPhi, also filed for bankruptcy.

Quoted from Carnewschinathe company was going through a pre-organizational phase, after struggling with the financial crisis. Human Horizons reportedly stopped production nearly six months ago.

HiPhi has suspended its production operations from February 2024 after failing to reach 8,000 unit shipments in the previous year. The company promises to pay employees.

The pre-organization period is six months, but can be extended by three months if necessary. Human Horizons must work with administrators to protect assets, carefully manage operations, and attract strategic investors. This period was seen as a last-ditch effort to avoid total bankruptcy through a new court-supervised rescue mechanism, aimed at reducing restructuring costs and reviving the valuable but troubled company.

Various takeover attempts have been made by brands such as Changan’s Avatr, FAW, iAuto Group, and even investors from Saudi Arabia. However, the future of the brand remains uncertain as the People’s Court of the Yancheng Economic and Technological Development Zone just accepted a pre-organization application this month. This restructuring phase is seen as the last resort for HiPhi to avoid full bankruptcy.

HiPhi was established in 2017 as a luxury EV brand offering three models – the Z sedan, and the X and Y SUVs However, due to strong competition in China, the brand struggled with sales and operational challenges.

Taken from Carscoopsmany electric vehicle brands from China are also feeling pressure from other domestic players, and this is reasonable. Experts believe that only 1 in 7 companies are still able to generate profits.

There are about 137 electric car brands operating in China. The consulting analyst Alixpartners believes that only 19 of them will turn a profit by 2030.

The high level of deception is caused by the brutal price war that has been going on for the past few years in the Chinese domestic market and shows no signs of abating. ‘ reduce.

(admin/rgr)