WM Motor China-based EV startup files for bankruptcy

As pricing competition in the biggest car market in the world heats up, Chinese electric vehicle startup WM Motor has applied for bankruptcy, signaling the end of a prospective leader among China's EV manufacturers.

According to a file made on the National Business Bankruptcy Information disclosure website on Monday, the bankruptcy case is being handled by a court in Shanghai.

In September, the ailing EV manufacturer and U.S.-listed used vehicle reseller Kaixin Auto Holdings announced a non-binding acquisition term sheet. The transaction took place after WM Motor's attempt to list via a backdoor reverse takeover with Hong Kong-listed Apollo Future Mobility failed.

After two earlier unsuccessful attempts by WM Motor to pursue a listing in Shanghai's STAR Market and Hong Kong, the failed bid was considered a survival tactic. WM Motor was one of the burgeoning Chinese EV companies, along with Nio, Li Auto, and XPeng, when it was founded in 2015 by recognised auto industry veteran Freeman Shen. Baidu, a major player in Chinese technology, and Shanghai's state-owned asset regulator were among its sponsors.

However, the Shanghai-based firm was having a difficult time turning a profit in the capital-intensive car industry.

According to WM Motor's stock prospectus published in June 2022 for a proposed Hong Kong IPO, the company's yearly losses increased to 8.2 billion yuan ($1.13 billion) over the three years leading up to 2021.