Chinese media, citing insiders, report that Changan, through its subsidiary Avatr Technology, may gain control of the electric vehicle startup HiPhi (it aka Human Horizons), which left production in February due to severe financial problems.
The Human Horizons company, operating under the HiPhi brand, entered the Chinese market in 2021 and has become famous for its striking design their electric vehicles. Unfortunately, the too high cost of HiPhi models, not very effective management and the global slowdown in demand for electric vehicles that began last year led Human Horizons to financial collapse: in February the company announced the shutdown of its plant in Jiangsu province for six months and is now trying to find ways out crisis.
HiPhi A
Insiders quoted by CnEVPost report that a deal with Avatr Technology could be a salvation for HiPhi — supposedly a corresponding agreement has already been reached and a merger of teams has even begun, but representatives of both companies have so far denied this information. Meanwhile, back in February, Chinese media reported that Human Horizons founder Ding Lei met with Changan management about the possible sale of a controlling stake in Human Horizons.
Avatr Technology was founded in 2018 as a joint venture between Changan and Nio, but Nio soon left the project due to financial difficulties, and was replaced by battery manufacturer CATL and IT giant Huawei — with this updated composition, the joint venture reached the Chinese market with the Avatr 11 crossover, last year the Avatr 12 platform sedan debuted at the Munich Motor Show.
Avatr 12
Changan is the largest shareholder of Avatr Technology with a share of 41%, CATL owns 14%, Huawei does not own Avatr shares, but participates in the project as a key supplier of software and a number of technological solutions. Avatr, like HiPhi, positions its models in the premium segment. Avatr electric cars also have a very distinctive and memorable design, although not as eye-catching as the HiPhi.
In recent months, Avatr sales have stagnated amid a price war in China that has continued since last year, unleashed by electric vehicle manufacturers at the instigation of Tesla. Last year, Avatr expected to sell 100,000 cars, but in reality sold less than 30,000. This year, Avatr management hopes to reach the milestone of 100,000 cars, for which it plans to launch two more affordable models, which will presumably be called Avatr 15 and Avatr 16, and they will be offered not only with fully electric, but also with plug-in hybrid power plants.
Having a major investor in Changan, Avatr Technology may not yet be afraid of the financial stupor in which HiPhi is located. HiPhi electric cars could, in theory, complement the Avatr lineup — the difference in design in China bothers few people. However, it is not yet clear whether Changan plans to retain the HiPhi brand or, after the merger, the companies will operate under one brand, that is, Avatr. We will monitor developments and report if the deal between Avatr and HiPhi actually goes through.