Major EV company goes bankrupt despite being backed by wealthy tech giant – blaming a lack of customer demand
A MAJOR EV company has gone bankrupt citing a lack of customer demands, despite being backed by a tech giant.
The Chinese start-up looked like it had the legs to become a big player in the electric car industry but has now collapsed.
WM Motors filed for bankruptcy on Monday after floundering sales.
The impact of the pandemic and rising prices, as well as increasing competition in the sector, have been blamed for its struggles.
The company was unable to dig itself out of its financial hole despite the backing of Tencent, the world’s largest investor in the video game industry, and tech firm Baidu.
Between 2019 and 2021, its annual losses doubled to around £1 billion.
A deal between WM and second-hand dealer Kaixin Auto Holdings, first floated in September, fell through earlier this year.
The firm also tried twice to gain a listing on the stock exchange, first in Shanghai and then in Hong Kong, with no success.
EV expert Sam Evans, also known as The Electric Viking, discussed the bankruptcy on his YouTube channel.
He said: “WM Motors…sold 5,000 or more electric cars for six consecutive months.
“It was on track to be one of the biggest, most successful EV manufacturers in China. Now it’s bankrupt.”
The bankruptcy has hit amid a collapse in sales for many big-name brands in China.
Both Jeep and Mitsubishi have pulled out of operations in the country over the past year amid financial struggles there.
This has led to vast EV graveyards springing up littered with abandoned motors left to rot.
At the same time, a select few Chinese carmakers have begun to flood the European market, leading to fears of an “invasion” of cheap Asian EVs.
The EU is currently considering imposing tariffs on all electric cars from outside the bloc, in large part due to concerns over competition from the People’s Republic.
However, EV advocates say that imported EVs may benefit customers with lower purchase costs, as many Chinese companies are supported by significant state subsidies.
It comes after drivers were warned that two million people a day may be wrongly fined by ULEZ cameras.
Meanwhile, an expert mechanic explained how cars are ruined by “cheap plastic”.