11/10/2023 (China) - Chinese electric-vehicle manufacturer WM Motor has filed for bankruptcy in Shanghai, becoming the latest casualty in a fiercely competitive market increasingly dominated by domestic giant BYD Co.
This bankruptcy filing came after Hong Kong-listed Apollo Future Mobility Group Ltd withdrew from a deal to purchase WM Motor for US$2.02 billion, citing financial market uncertainty and China's uneven economic recovery.
WM Motor, which once showed great promise as a Chinese EV startup backed by Baidu Inc and Tencent Holdings Ltd, has fallen victim to the volatile dynamics of the world's largest EV market. In 2021, the company sold approximately 35,000 electric sport utility vehicles, a figure that remained similar in the following year. However, their sales dwindled to just 1,387 cars in the first eight months of the current year.
WM Motor had initially planned to launch its latest M7 EV in 2023, which would have expanded its lineup to five models. Unfortunately, these plans fell through, resulting in layoffs, factory production suspensions, and a reduction in aftersales services.
China's EV market, characterized by cutthroat competition, had seen around 100 manufacturers producing pure-electric and plug-in hybrid models. This marked a significant reduction from the approximately 500 registered makers in 2019 when government subsidies had fueled the industry.
Some Chinese EV startups, like Nio Inc and Xpeng Inc, were seeking funding to weather the challenges of the market. Nio had sold a 7% stake to an entity controlled by Abu Dhabi for about US$740 million and was considering raising an additional US$3 billion, while Xpeng secured a US$700 million investment from Volkswagen AG over the summer.