Human Horizons, the parent company of luxury EV brand Hi Phi, has entered the pre-reorganization phase after filing for bankruptcy, marking a critical moment in China’s new energy vehicle (NEV) sector. The company, struggling financially, halted production nearly six months ago.
The newly announced bankruptcy of Hi Phi shows that fleets must “tread carefully” when it comes to buying vehicles from the new wave of Chinese manufacturers arriving in the UK, FleetCheck is warning.
Peter Golding
Peter Golding, managing director at the fleet software specialist, pointed out that the car maker was due to begin sales in Europe this year and had already begun the process of homologating its models.
He said: “The Financial Times reported at the turn of the year that the number of Chinese EV makers was likely to fall from around 50 to 12 in the next decade, and it does look as though that process is now getting underway. Hi Phi is probably the first of several to go bust.
“Of course, the issue is not just limited to China. We’ve seen something similar with Fisker in the US, which has also filed for bankruptcy in recent months.
“The problem for fleets is that it is difficult to work out which of the new entrants have credibility. Hi Phi and Fisker were both producing what looked like convincing new models and seemed to have substantial financing in place, yet the latter is now selling off its remaining stock at a reported 80% discount while parts availability is next to non-existent.
“Fleets obviously don’t want to find themselves operating vehicles from a manufacturer that fails in this manner and need to tread carefully.”
There was a danger especially that Chinese EV manufacturers would move to dump stock in the European market following a dramatic fall in domestic demand, he added.
“We know there is considerable overproduction in China and it will be tempting for car makers to offer those models here at highly attractive prices but of course, those manufacturers are exactly the ones that are most likely to fail in the future.
“Our advice is to look to the Chinese manufacturers who are establishing genuine roots in Europe by creating franchise dealer networks, parts distribution hubs and ideally, also investing in manufacturing capacity here, too. Those car makers might not be the cheapest but are the ones who are planning to be here for the long haul and want to form genuine, ongoing partnerships with fleets.”
