Chinese EV start-up WM Motor files for bankruptcy

BEIJING – Chinese electric vehicle (EV) start-up WM Motor has filed for bankruptcy, marking the demise of a promising standout among China’s EV makers as price competition in the world’s largest auto market heats up.

A court in Shanghai is handling the bankruptcy case, according to a filing on Monday on the national enterprise bankruptcy information disclosure platform.

United States-listed second-hand car dealer Kaixin Auto Holdings had announced in September a non-binding acquisition term sheet with the troubled EV maker.

The deal came after WM Motor’s back-door listing through a reverse takeover with Hong Kong-listed Apollo Future Mobility fell through.

The failed deal was seen as a survival move after two previous fruitless attempts by WM Motor to seek a listing in Hong Kong and Shanghai’s Star Market.

Founded in 2015 by renowned auto veteran Freeman Shen, WM Motor was seen to be among rising Chinese EV start-ups Nio, Li Auto and XPeng. Its backers included Chinese tech giant Baidu and Shanghai’s state-owned asset regulator.

But the Shanghai-based start-up was struggling to eke out profits in the capital-intensive auto sector.

WM Motor’s annual losses doubled to 8.2 billion yuan (S$1.56 billion) over the three years to 2021, according to its stock prospectus released in June 2022 for a planned Hong Kong initial public offering.

China’s passenger vehicle sales returned to growth in August year on year, ending a streak of losses since May, as deeper discounts and tax breaks for green vehicles boosted consumer sentiment.

Concerns remain, however, over consumer spending on big-ticket items such as cars amid a shaky post-Covid-19 economic recovery. REUTERS