DOMESTIC electric vehicle (EV) startup WM Motor Ltd. has filed for bankruptcy, making it the latest casualty in China’s crowded electric vehicle market as price competition in the world’s largest auto market heats up.

A court in Shanghai is handling the bankruptcy case, according to a filing dated Monday on the national enterprise bankruptcy information disclosure platform.

U.S.-listed second-hand car dealer Kaixin Auto Holdings announced in September a non-binding acquisition term sheet with WM Motor.

The deal came after WM Motor’s backdoor listing through a reverse takeover with Hong Kong-listed Apollo Future Mobility fell through a month ago.

The failed deal was seen as a survival move after two previous fruitless attempts by WM Motor to seek a listing in Shanghai’s STAR Market and Hong Kong.

WM Motor’s struggle reflects the boom-and-bust cycle seen among smaller EV players grappling to compete amid explosive competition, with the likes of BYD Co. and Geely Automotive Holdings Ltd. emerging as the dominant auto brands in China.

Founded in 2015 by Freeman Shen, a former chief executive officer of Zhejiang Geely Holding Group Co., closely held WM Motor was regarded as one of the most promising Chinese EV startups. Early backers included tech giants Baidu Inc. and Tencent Holdings Ltd., and it at one point had planned to integrate Baidu’s self-driving capability into its vehicles.

But the Shanghai-based startup was struggling to eke out profits in the capital-intensive auto sector. The firm sold just 35,647 electric sport utility vehicles in 2021 and only around 34,700 last year, data from the China Automotive Technology and Research Center show. In the first eight months of this year, it managed to sell a paltry 1,387 cars.

WM Motor’s annual losses doubled to 8.2 billion yuan (US$1.13 billion) over the three years to 2021, according to its stock prospectus released in June 2022 for a planned Hong Kong listing.

China’s passenger vehicle sales returned to growth in August year on year, ending a streak of losses since May, as deeper discounts and tax breaks for green vehicles boosted consumer sentiment.

China, the world’s largest new-energy vehicle market, now has about 100 manufacturers churning out pure electric and plug-in hybrid models, down from around 500 registered makers in 2019 when government subsidies turbocharged the industry.

Deliveries of China-made EVs and plug-in hybrids hit a record high of 716,000 in August, with the bulk coming from dominant players like BYD and Tesla Inc.

(SD-Agencies)