Ailing Chinese automaker WM Motors Ltd. has filed for bankruptcy, making the startup the latest casualty in China’s crowded electric vehicle market.
(Bloomberg) — Ailing Chinese automaker WM Motors Ltd. has filed for bankruptcy, making the startup the latest casualty in China’s crowded electric vehicle market.
The bankruptcy filing was disclosed in a notice published on China’s national enterprise bankruptcy information disclosure platform.
The move comes just a month after Hong Kong-listed Apollo Future Mobility Group Ltd. walked away from a deal to buy WM Motor for $2.02 billion, cited financial market uncertainty and China’s uneven economic recovery from the pandemic.
The startup’s struggle reflects the boom-and-bust cycle seen among smaller EV players grappling to compete amid explosive competition, with the likes of BYD Co. and Geely Automotive Holdings Ltd. emerging as the dominant auto brands in China.
Closely held WM Motors, which was founded by Freeman Shen, a former chief executive officer of Zhejiang Geely Holding Group Co., sold just 35,647 electric sport utility vehicles in 2021 and only around 34,700 last year, data from the China Automotive Technology and Research Center show. In the first eight months of this year, it managed to sell a paltry 1,387 cars.
The situation is a sharp turnaround from just a few years ago, when WM Motor was regarded as one of the most promising Chinese EV startups, setting delivery records and considering a listing on Shanghai’s Star board, China’s answer to the Nasdaq. Early backers included tech giants Baidu Inc. and Tencent Holdings Ltd., and it at one point had planned to integrate Baidu’s self-driving capability into its vehicles.
The company had planned to launch its latest M7 model in 2023, which would have meant WM had five models on the market, but that hasn’t happened yet. The company was also forced to lay off employees, suspend factory productions, and cut down on aftersales services.
Read More: Pay Cuts and Layoffs at China’s WM Motor Show EV Industry Stress
The world’s largest new-energy vehicle market now spans about 100 manufacturers churning out pure-electric and plug-in hybrid models, down from around 500 registered makers in 2019 when government subsidies turbocharged the industry.
The market has also been embroiled in a fierce price war this year, which has cut into automakers’ margins.
Deliveries of China-made EVs and plug-in hybrids hit record high 716,000 in August, data from China Passenger Car Association show, with the bulk coming from dominant players like BYD and Tesla Inc.
(Adds sales figures in fifth paragraph. An earlier version of this story corrected the date of the bankruptcy filing.)
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