- HiPhi fell on tough times shortly after launching its EVs in Europe.
- The small car manufacturer has halted production for six months and needs a lifeline.
- Avatr is owned by Changan, itself a state-owned carmaker in China.
Just as rumors began circulating on Monday regarding a potential rescue of Chinese electric vehicle startup HiPhi by fellow EV maker Avatr, the state-owned automaker swiftly refuted the news of its intention to buy the company. A company spokesperson dismissed the reports, stating to Chinese media “Don’t talk nonsense. This is not happening”.
Unlike many other EV brands to emerge from China in recent years, HiPhi is not owned by an existing manufacturer like Geely. Instead, its parent company, Human Horizons, was formed from scratch by founder Ding Lei in 2017 before HiPhi’s launch in 2019. The brand has already released three compelling models: the Z, X, and Y.
Read: Avatr To Expand Global Reach With Two More Models And EU Production
However, the company has fallen on hard times. In February, it announced a six-month production halt. At the time, Lei had pointed out that the firm had just three months to turn itself around, prompting speculation that a bankruptcy filing was imminent.
On Monday, a new report surfaced in China indicating that Avatr Technology, owned by Changan and battery manufacturer CATL (plus some other investors), will step in to acquire a 51% stake in HiPhi. While Avatr rejected the news, it’s not entirely without foundation. Lei did visit a Changan facility in February and met with the firm’s chairman, Zhu Huarong, a fact confirmed by both companies. However, it remains unclear if their discussions involved a potential partial acquisition.
China’s Mydrivers reports that despite the denial, the two companies could still be engaged in discussions behind the scenes. As pointed out by CarNewsChina, technically speaking, Avatr denied that it has bought HiPhi, not that it might be in talks with HiPhi for such an acquisition.
If Avatr were to purchase a controlling stake in HiPhi, it would be interesting to see what it decides to do with the brand. It could simply provide the company with the funds it needs to resume production or it may start to use some of the technologies and systems from the HiPhi Z, X, and Y in its own vehicles.
It’s not just customers who have been impacted by HiPhi’s recent decision to suspend production for six months. Employees will be downgraded to minimum wage as the firm fights for survival. The move also adversely impacts HiPhi’s planned expansion across Europe which started in mid-2023. In November, the company also unveiled a flagship variant of the Z dubbed the A. This new model serves as a Lucid Air Sapphire and Tesla Model S Plaid rival with 1,287 hp.
Sources: MyDriver, Carnewschina