CHINA • A former top executive behind China's biggest acquisition of an overseas carmaker is setting out to make history twice, raising US$1 billion (S$1.3 billion) in an initial fund-raising round as the latest home-grown electric vehicle start-up to challenge Tesla Motors.
Mr Freeman Shen left Volvo Cars owner Zhejiang Geely Holding Group Co in 2014 and, last year, founded WM Motor, which he says has secured funding from both domestic and overseas investors.
WM plans to introduce its first model in 2018 and boost production to more than 100,000 units annually within the following three years, he said.
"We have profound experience in the industry, which distinguishes us from other start-up companies, even Tesla," said Mr Shen, who has worked in the auto industry for 22 years.
"We don't want to make toy-like luxury cars for the minority. We will target the mass market."
WM said that the sum it has raised is a show of confidence in a start-up competing with more than 200 Chinese electric-vehicle companies, some backed by the likes of Alibaba Group Holding's Jack Ma, Foxconn Technology Group's Terry Gou and Tencent Holdings's Ma Huateng.
Both traditional automakers and the bevy of start-ups see potential in the government's commitment to boost yearly sales of new-energy vehicles - its term for plug-in hybrid and fully-electric cars - by 10-fold in the next decade.
Start-ups rarely reach the so-called unicorn status of a US$1 billion valuation in initial funding rounds. Zhejiang Ant Small & Micro Financial Services Group, known as Ant Financial and controlled by Alibaba's billionaire chairman Ma, raised funds at about a US$40 billion valuation in June last year. Tesla started with just US$7.5 million in April 2004.
To reduce dependence on oil imports and curtail pollution, the Chinese government is promoting what it considers a strategic industry by subsidising both companies and consumers. It is seeking three million new-energy vehicle sales a year by 2025, from 330,000 last year, when the country surpassed the United States to become the world's biggest electric-car market.
WM was named after the German word weltmeister, which means global champion. Its management team has extensive experience in China's auto industry, ranging from product development, parts procurement, production and sales, according to Mr Shen.
The company joins a frenzy of upstarts seeking to speed up investment in China's electric-car sector. Chehejia, founded by Internet entrepreneur Li Xiang, said it has begun constructing an assembly plant with eventual capacity to make 300,000 vehicles a year.
LeEco, backed by billionaire Jia Yueting, announced plans to invest as much as 20 billion yuan (S$4 billion) in a vehicle plant in eastern China and an auto theme park.
WM is developing cars using two platforms and conducting road tests, Mr Shen said. The company plans to apply for a production licence later this year and set up a factory in eastern China, he said, declining to give more details.
Mr Shen attended Harvard Business School's Advanced Management Programme while working for Geely, which bought Volvo from Ford Motor in 2010, in the largest overseas acquisition by a Chinese automaker. He previously spent more than a decade working at autoparts maker BorgWarner and Italian automaker Fiat SpA.