156 views 4 mins 0 comments

Chinese EV maker Human Horizons suspends manufacture of luxury HiPhi brand for 6 months as market competition intensifies

In Business
February 19, 2024

The Shanghai-based company told its employees on Sunday that it was implementing a six-month suspension of its luxury HiPhi brand, effective immediately, according to local financial media outlet Jiemian.

Human Horizons declined to comment when contacted by the Post on Monday.

Two sources with knowledge of the electric car maker’s operations said the company was not able to pay its employees their salaries in January.
The decision to stop assembling its expensive cars priced above US$80,000 came after Human Horizons failed to turn its business around amid a slowdown in the Chinese EV market that may force smaller carmakers to fold.

02:18

Electric car designed by Swiss students sets new world record for acceleration

Electric car designed by Swiss students sets new world record for acceleration

“HiPhi’s crisis exacerbates the bearish sentiment about Chinese EV companies’ performance,” said Chen Jinzhu, CEO of consultancy Shanghai Mingliang Auto Service. “More small players will have to close down their businesses as competition escalates.”

It is not clear whether the company’s problems in mainland China will affect its venture in Saudi Arabia, which has not started operations yet.

HiPhi, founded in 2017, currently builds and sells three models in China, all of them under the HiPhi brand name.

Ding Lei, founder and CEO of Human Horizons, told local media in 2022 that the company had more than 5,000 employees.

EU climate demands set to erode Chinese EV makers’ export edge: expert

HiPhi does not publish delivery data. It does not feature in lists of China’s top 15 EV makers by monthly sales, according to data from the China Passenger Car Association (CPCA).

In October, the company denied a market rumour that it would cut its workforce by 20 per cent and said its operations remained normal.

EV makers sold 8.9 million vehicles to Chinese buyers last year, a 37 per cent year-on-year increase, according to the CPCA.

But sales growth in the country could slow to 20 per cent this year, according to a forecast by Fitch Ratings last November.

China is the world’s largest automotive and EV market, with sales of battery-powered cars accounting for about 60 per cent of the global total. But only a few makers, including BYD and Li Auto, are profitable.

According to calculations by the China Business News in September, at least 15 start-ups with a combined annual production capacity of 10 million units have either collapsed or been driven to the verge of insolvency as bigger players took the lion’s share of the market. That exceeds the 8.9 million EV sales on the mainland in 2023.

In October, embattled Chinese EV start-up WM Motor, once viewed as a potential rival to Tesla, filed for bankruptcy with its petition being reviewed by the Shanghai No. 3 Intermediate People’s Court. It normally takes six months before a court in China gives its verdict on a bankruptcy case.

WM said in an official post on Weibo, China’s Twitter-like social-media platform, on October 10 that it would still aim for a rebirth funded by strategic investors from around the world.

The news is published by EMEA Tribune & SCMP210520-twitter-verified-cs-70cdee.jpg (1500×750)Follow our WhatsApp verified Channel 

Support Independent Journalism with a donation (Paypal, BTC, USDT, ETH)
whatsapp channel
Avatar
/ Published posts: 44084

The latest news from the News Agencies