BEIJING, January 9 (TMTPost)— Human Horizons Group Inc., a Saudi Arabia-backed luxury electric vehicle (EV) maker in China, is mired in rumors of collapse.

Credit：Human Horizons

Human Horizon has suspended all the works, including deliveries and development of new projects, according to a screenshot posted on a Chinese forum chiphell recently. The screenshot also showed sources who revealed Human Horizon’s suspension suggested preparation for filing a lawsuit against the EV maker. According to another screenshot of a WeChat group chat, Human Horizon has failed to deliver vehicles due to a cash crunch and suppliers halted their shipments. News circulated online said Human Horizon announced, through its account at ByteDance’s collaboration platform Lark Suite, it would axe a number of employee benefits such as subsidized meals, transportation subsidies and free shuttle services.

Human Horizon last week posted a statement on Chinese social media platform Weibo to dismiss the abovementioned news. The company said all the operations remain normal and works ranging from research and development (R&D), production, marketing to delivery are also proceeding normally. “The original post about these rumors has been deleted and the relevant platform has issued a warning the member who posted it,” Human Horizon said in the statement. “The misinterpretation of related information has resulted in serious damage to the brand reputation of Human Horizon, and misled the public, the company thus has reported a case to the public security authorities, Please not believe in these rumors and spread them.”

Rumors around Human Horizon were not very unexpected as the EV company has been experiencing a sharply decline in the past year. Human Horizon launched its first model HiPhi X in 2020, less than three years after the establishment. The premium version of HiPhi X costs RMB800,000, almost the highest price tag for a EV made by the Chinese manufacturer at that time. Human Horizon then released another two models HiPhi Y and HiPhi Z, mainly targeting high-end EVs priced at a range of RMB600,000 and RMB800,000. Despite the elevated pricing, the Shanghai-based company still sold 4,237 units in 2021 and 4,349 in the following year. However, sales from January to November 2023 totaled 7,256 EVs, and just two months saw vehicles registered for Insurance topped 1,000 units. The monthly registered volume in other months were no more than 600 units. HiPhi Z and X, two models with higher selling price, had once sold couples of units in certain months.

Human Horizon’s founder Ding Lei had said  his company has its original capital from the United States’ sources and the government investment, without any immediate plan for private equity investment. The company has launched only one public fundraising, which took place in January 2021 as a form of strategic investment amounting RMB5.0 billion from the Communication Bank of China, Shanghai Branch, according to Qichacha, a provider of data and analytics on Chinese companies.

Human Horizon has reached a partnership with Saudi Arabia when sales of the company decelerated. In July 2023, Saudi Arabia’s Ministry of Investment has signed a US$5.6 billion deal with Human Horizons to set up a joint venture for R&D, manufacturing and sale of vehicles. The deal accounts for more than half of the US$10bn investment agreements that were signed on the first day of an Arab-China business conference in Riyadh across different industries including technology, renewable energy, agriculture, real estate, metals, tourism and healthcare among others.

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is discussing with Human Horizon to invest at least US$250 million, as part of efforts for the kindom to build a domestic auto industry Bloomberg reported in November. PIF could buy into Human Horizons at a US$3 billion valuation and the EV company is considering rasing as much as US$1 billion from private investors to boost growth, the report cited sources.