Avatr has approached HiPhi and may have struck a partnership deal, with the two now reorganizing their teams, according to local media.

HiPhi may have struck restructuring deal with Changan's EV arm Avatr, report says-CnEVPost

(Image credit: CnEVPost)

Troubled Chinese electric vehicle (EV) brand HiPhi may have struck a deal with another local brand to avoid its failure.

Changan Automobile's EV unit Avatr has been in talks with HiPhi and the two may have struck a partnership deal, local media outlet Lanjinger said in a report today, citing a source close to Avatr.

The two are already reorganizing their teams, according to the report.

Avatr responded to this by saying that it has no further information to disclose at this point in time, the report noted, without providing further details.

Hours later, in a statement posted on Weibo, Avatr said rumors that it had finalized its acquisition of HiPhi false.

HiPhi is Human Horizons' EV brand and the latest Chinese EV maker to run into operational difficulties.

On February 18 -- the first working day after China's 2024 New Year holiday -- HiPhi announced a six-month suspension of production, instead of celebrating the start of work like other car makers.

On February 22, local media outlet Sina Tech reported that HiPhi founder Ding Lei apologized to employees in an internal meeting with them, saying that he was using old-fashioned business strategies and was no match for his peers who came from Internet companies.

Ding said at the time that HiPhi's window for a turnaround would be three months at most, and that he would be actively working toward that end.

On February 28, Jiemian cited people familiar with the matter as saying HiPhi was in contact with Changan about a takeover.

Another local media outlet, Yicai, reported at the time that Ding met with Changan chairman Zhu Huarong in Chongqing, where the auto giant is headquartered, on February 27 to discuss the matter, and that HiPhi brought the company's vehicles for Changan's team to experience.

Founded in 2017, HiPhi is targeting the high-end EV market of RMB 500,000 ($69,450) to RMB 800,000.

The company released its first model, the HiPhi X, in October 2020, which began deliveries in May 2021 and is currently priced at a starting price of RMB 570,000 yuan.

In August 2022, HiPhi launched its second model, the HiPhi Z, which is currently priced at a starting price of RMB 510,000 yuan.

On July 15, 2023, HiPhi launched its least expensive model to date, the HiPhi Y, in an attempt to enter the mainstream premium EV market. The model has a starting price of RMB 339,000 and deliveries began on July 29, 2023.

HiPhi founder apologizes to employees, says firm has only 3-month window left