The newly announced bankruptcy of HiPhi is a warning to fleets when it comes to incoming EV brands, FleetCheck has said.

HiPhi was due to begin sales in Europe this year

Human Horizons, parent company to the fledgling EV brand, filed for bankruptcy in China earlier this month, putting paid to plans to launch its EVs in Europe.

The carmaker was due to begin sales this year and had already started the process of homologating its models, which included the Y SUV and Z saloon.

FleetCheck said the bankruptcy showed that fleets must “tread carefully” when it comes to EV market entrants.

Peter Golding, managing director at the fleet software specialist, commented: “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. HiPhi is probably the first of several to go bust.”

FleetCheck stressed that the issue was not just limited to China and pointed to the demise of US EV firm Fisker, 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. HiPhi 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,” Golding explained.

“Fleets obviously don’t want to find themselves operating vehicles from a manufacturer that fails in this manner and need to tread carefully.”

Potential problems include a move by EV manufacturers to dump stock in the European market following falls in domestic demand, particularly in China.

“We know there is considerable overproduction in China and it will be tempting for carmakers 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,” Golding elaborated.

“Our advice is to look to the Chinese manufacturers that are establishing genuine roots in Europe by creating franchise dealer networks, parts distribution hubs and, ideally, also investing in manufacturing capacity here, too. Those carmakers might not be the cheapest but are the ones that are planning to be here for the long haul and want to form genuine, ongoing partnerships with fleets.”