Chinese electric car manufacturer WM Motor, facing financial challenges, appears to be on the brink of changing ownership. Kaixin Auto, a Chinese car trading group, has formally announced its intention to acquire a 100% stake in WM Motor from its current shareholders, with the transaction involving the issuance of new shares. While specific details of the acquisition remain undisclosed, Kaixin Auto highlights WM Motor's recent strides in overseas expansion as a pivotal factor.
WM Motor's recent endeavors have included “various cooperation projects in the European Union, the Middle East, ASEAN, North America, and other regions,” according to Kaixin Auto's brief announcement. Notably, in January 2021, WM Motor entered into a strategic agreement with Enel X, aimed at introducing WM's electric vehicles to markets in Europe, China, Southeast Asia, the Middle East, and South America.
Established in 2015, WM Motor has successfully sold over 100,000 electric cars across approximately 200 Chinese cities. The company offers a range of four models – E5, EX5, EX6, and W6, with plans to commence deliveries of its fifth model, the M7 electric sedan, scheduled for presentation in the autumn of 2021. WM Motor operates production facilities in Wenzhou and Huanggang.
This potential acquisition comes after WM Motor's efforts, approximately two years ago, to secure $500 million in a two-part Series D financing round. The funds were intended for the development of autonomous driving technologies, product enhancements, and the expansion of its sales and service networks. These endeavors followed a substantial funding injection of €1.25 billion in 2020. However, WM Motor faced financial hardships in the preceding year due to the COVID-19 pandemic, rising material costs, and supply chain disruptions.
Prior to exploring a deal with Kaixin Auto, WM Motor had contemplated a listing on the Hong Kong stock exchange through a reverse takeover of Apollo Future Mobility Group, an already-listed entity in Hong Kong. While WM Motor had applied for the listing in 2022, it had not received a response from the stock exchange. However, earlier this month, both companies put their plan on hold, leaving the future of this listing initiative uncertain.
While the precise fate of WM Motor remains unclear, it is evident that the company will persevere. Mingjun Lin, Chairman and CEO of Kaixin Auto, remarked, “WM Motor's fashion technology product positioning and branding align well with Kaixin's strategic development objectives. Through this intended acquisition, WM Motor stands to access increased capital support to bolster the growth of its smart mobility business.”