Troubled EV-Maker HiPhi Plans to Resume Production in Months Following Deal With U.S. Auto Firm

HiPhi, a Chinese luxury electric vehicle (EV) brand, is striving to resume production after securing considerable financing from a U.S. investor following a nearly three-month hiatus [para. 1]. IAuto Group Inc., a Delaware-founded auto company with an office in Hong Kong, signed a strategic agreement with HiPhi’s parent company, Human Horizons Group Inc., on May 10. This agreement outlines an initial investment of up to $1 billion for HiPhi’s restructuring, as noted in a press release published by iAuto [para. 2]. The agreement aims to restore normal business operations and vehicle production soon [para. 3].

IAuto’s co-founder and Chief Strategy Officer, Stephanie Yeung, mentioned in a statement that they expect production to resume in the next three to four months, with a goal of reaching 50,000 units within the first 12 months [para. 4]. Collaboratively, IAuto and Human Horizons have initiated restructuring, forming two specialized working groups. One group focuses on reorganizing ownership, debt, suppliers, and employees, while the other handles product planning, project design, engineering, supply chain, and marketing. These groups began their efforts on restart operations as of Friday [para. 4].

HiPhi’s potential resurgence is pivotal, given its unexpected production halt and dismissal of some contract workers in February, which blindsided many in China’s auto industry [para. 5]. Ding Lei, the resourceful founder and CEO of Human Horizons, previously held significant positions such as CEO of SAIC General Motors Corp., chairman and Communist Party secretary of Shanghai Zhangjiang Hi-Tech Park, and a deputy mayor of Shanghai’s Pudong New Area. He launched Human Horizons in 2017 and, in his effort to salvage the company, also approached state-owned automaker Changan Automobile Co. Ltd. [para. 6].

IAuto Group Inc. is described as a clean-energy vehicle company with several international patents in vehicle powertrain and motor systems [para. 7]. The firm is controlled by Chinese businessman Yang Rong, the chairman and largest single shareholder of Hong Kong-listed Hybrid Kinetic Group Ltd., an EV-maker that hasn’t yet entered mass production [para. 8]. Noteworthy is that Yang was once a prominent figure in China’s automotive sector, having previously chaired Brilliance China Automotive Holdings Ltd., a partner of BMW Group’s China operations. However, he relocated to the U.S. following asset disputes with the government of Liaoning province [para. 9].

HiPhi, which sells three premium EV models priced between 339,000 yuan ($46,900) and 800,000 yuan, reportedly sold 8,681 vehicles in 2023, according to data from the China Passenger Car Association as cited by a news outlet under the Ministry of Industry and Information Technology [para. 10]. This figure underscores the brand’s potential if it can successfully navigate its current challenges and resume production.

In sum, HiPhi’s strategic partnership with IAuto Group Inc. could mark the brand's recovery and stabilization in the luxury EV market. The infusion of up to $1 billion and the specific restructuring initiatives demonstrate a robust plan to regain production and market position [para. 1][para. 2][para. 3][para. 4]. This development will be crucial for HiPhi’s market presence, especially following the tumult caused by its sudden production halt earlier this year [para. 5][para. 6].