Chinese EV start-up WM Motor reportedly cuts employees’ pay by up to 50 per cent as it grapples with weak sales
- The electric car start-up, which is looking to launch an IPO in Hong Kong, trails big domestic rivals in terms of sales
- It is struggling financially, according to two executives at its supply-chain vendors
WM did not respond to the Post’s queries about the pay cuts.
Two executives with WM’s supply-chain vendors said the company was grappling with financial problems and struggling to sustain its operations because of lacklustre sales in the highly competitive market.
In 2021, it lost 1.95 billion yuan (US$270 million), 68 per cent more than a year earlier.
Once viewed as a promising electric vehicle (EV) start-up, WM mainly builds battery-powered vehicles priced between 150,000 yuan (US$20,574) and 200,000 yuan, targeting mainland China’s huge population of middle-class motorists.
In June, WM filed an IPO application to the Hong Kong stock exchange. It is not known when its fundraising plan is likely to be implemented.
None of the top Chinese smart-car builders have made a profit so far, as they spend heavily on developing new models.
The drive to encourage people to ditch their petrol cars has attracted some 200 companies that have invested tens of billions of dollars in developing, designing and assembling electric cars.
Founded in 2015 by Freeman Shen Hui, WM has a manufacturing facility in Wenzhou, in China’s eastern Zhejiang province, equipped with mass customisation capability and a capacity of 100,000 units a year.
Another factory in Huanggang, in central China’s Hubei province, has a capacity of 150,000 cars.
In 2021, WM delivered 44,152 vehicles to mainland customers, more than double the number a year earlier.
In the first eight months of this year, the company sold 25,158 vehicles in China.
The sales numbers lagged far behind Nio, Xpeng and Li Auto, which normally deliver about 10,000 vehicles each in one month.
US carmaker Tesla is the runaway leader in the mainland’s premium EV segment. Its Shanghai-based Gigafactory delivered a record 83,135 units in September.
By 2030, three out of every five new vehicles sold in the country will be powered by batteries, the Swiss bank predicted last year.