Chinese electric vehicle maker Human Horizons will suspend production for at least six months and furlough its employees in an attempt to keep the company going as it looks for new funding, local media has reported.
Why it matters: Human Horizons, which has been selling premium EVs under the HiPhi brand since late 2020, is the latest Chinese EV startup to scramble for cash as it tries to continue operations, as competition intensifies and growth slows in the hotly contested market.
- Shanghai-based WM Motor, founded by former Volvo executive Freeman Shen, filed for a pre-restructuring process last October after failing to go public in Hong Kong via a backdoor listing, Reuters reported. Aiways, which began exporting EVs to Europe as early as 2020, also suspended production last year, the Financial Times reported.
Details: The austerity measures were announced at a staff meeting on Sunday and immediately went into effect, people familiar with the matter told financial media outlet Caixin (in Chinese).
- Human Horizons’ workforce were told on Sunday that their base salaries would be reduced to RMB 2,690 ($374) per month, Shanghai’s minimum wage, from March 15, the Caixin report claimed.
- A company representative denied the report, without elaborating, according to Caixin.
Context: The firm’s financial woes have been signposted for some time. It recently closed two showrooms and has been searching for new financing after Saudi Arabia’s Ministry of Investment withdrew its intention to set up a joint venture in a $5.6 billion deal.
- Human Horizons recorded a brief success during 2021-2022 when the automaker delivered roughly 8,700 upper premium HiPhi EVs and established a presence in the luxury segment where autos are priced above RMB 500,000 ($78,450). By comparison, Porsche delivered 7,315 all-electric Taycan cars in China in 2021.
- The low-volume carmaker has since failed to extend its advantage in the mainstream luxury segment and struggled with a cash crunch. It delivered roughly 8,000 units last year, contributed to by the sales of its third model the HiPhi Y crossover, priced at RMB 339,000, while peers Li Auto and NIO delivered more than 376,000 and 160,000 units, respectively.
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