Five companies recently applied to Chinese courts to freeze property owned by a subsidiary of electric vehicle firm WM Motor totaling about 130 million yuan ($18.9 million). Legal bodies have now agreed to the appeal.
The specific subsidiary is WM Motor New Energy Vehicle Sales (Shanghai) Co., Ltd., established in 2018 with registered capital of 500 million yuan. The company is wholly owned by WM Motor, and its legal representative is founder Freeman Shen.
WM Motor is facing financial difficulties after failing to carry out an IPO in Hong Kong. Freeman Shen issued an internal letter in November 2022, saying that in order to cope with the financial pressure, the company would reduce operating costs through a series of financial measures. Since then, news emerged that WM Motor will go public in Hong Kong by a backdoor listing to alleviate its financial problems.
WM Motor has also received financial support from state-owned institutions. Qichacha, a Chinese business information platform, showed that WM Motor Technology (Sichuan) Co., Ltd. added Mianyang Anzhou Investment Holding Group Co., Ltd. as its largest shareholder on December 20, holding 67.3%, while WM Motor’s portion dropped to 32.7%. At the same time, Freeman Shen no longer serves as the legal representative, and the registered capital has increased from 170 million yuan to 520 million yuan.
Prior to this, WM Motor and Mianyang, Sichuan Province, had already cooperated in 2019 to establish an automated driving demonstration industrial park and automated driving technology center.
After winning the second spot in terms of new energy vehicle makers’ delivery volume in 2019, WM Motor’s performance began to decline. In 2021, it delivered 44,200 vehicles, while NIO, XPeng and Li Auto all delivered over 90,000 vehicles. In 2022, NIO, XPeng, Li Auto, NETA and Leapmotor all delivered over 100,000 vehicles, while the China Passenger Car Association’s data show that WM Motor sold less than 30,000 vehicles in the first 11 months of last year.
Personnel changes are taking place within the firm. In August 2020, Lu Bin, the co-founder and chief travel officer of WM Motor, left the company. Lu once held important positions in SAIC General Motors, Geely, Chery and other car companies. Du Ligang, another veteran of WM Motor, was rumored to leave the job in December last year. He was mainly responsible for the investment, financing, listing, and capital operation of WM Motor.
Jiemian News quoted an investor as saying that WM Motor’s decline has been caused by many reasons, such as a lack of competitive products, the radical self-motivation of the founding team, competitors’ upgrades and industrial transformation.