BEIJING, Oct 10 (Reuters) –
Chinese electric vehicle startup WM Motor has filed for
bankruptcy, marking the demise of a promising standout among
China 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 dated Monday on the national enterprise
bankruptcy information disclosure platform.
U.S.-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 backdoor 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
Shanghai’s STAR Market and Hong Kong.
Founded in 2015 by renowned auto veteran Freeman Shen,
WM Motor was seen to be among rising Chinese EV startups Nio
, Li Auto and XPeng. Its backers
included Chinese tech giant Baidu and Shanghai’s
state-owned asset regulator.
But the Shanghai-based startup was struggling to eke out
profits in the capital-intensive auto sector.
WM Motor’s annual losses doubled to 8.2 billion yuan
($1.13 billion) over the three years to 2021, according to its
stock prospectus released in June 2022 for a planned Hong Kong
IPO.
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 economic
recovery.
($1 = 7.2871 Chinese yuan renminbi)
(Reporting by Qiaoyi Li, Zhang Yan and Brenda Goh
Editing by Shri Navaratnam and Kim Coghill)
