In a recent statement, renowned Chinese electric vehicle company WM Motor announced its decision to file for bankruptcy, shedding light on the intense competition within the world’s largest car and electric vehicle market. While China has been at the forefront of electric vehicle development globally, the multitude of brands and sluggish consumer spending pose significant challenges for local companies operating in this sector.
WM Motor, which garnered significant support from internet giant Baidu and tech titan Tencent, was considered to be among the promising firms that could thrive in this competitive landscape. However, the company highlighted the difficulties it encountered due to various factors, including the Covid-19 pandemic, a downturn in the capital market, soaring raw material prices, and a general shortage of funds, leading to its decision to file for bankruptcy.
In its statement posted on social media, WM Motor emphasized that the pre-restructuring phase will attract strategic investors from across the globe, enabling the company to revive itself and embark on a path of development from a healthier and stronger position.
Previously, WM Motor had aimed to achieve a backdoor listing on the Hong Kong stock exchange through a reverse takeover by Baidu’s Apollo. However, the proposed deal fell through just last month, adding to the challenges faced by the company.
According to Counterpoint Research, the Chinese market currently boasts approximately 100 brands selling electric vehicles. Among them, the homegrown player BYD occupies the largest market share and has been instrumental in driving down prices, further intensifying competition within the industry.