Kaixin Auto to take over WM Motor
The financially troubled Chinese electric car manufacturer WM Motor looks set to get a new owner. The Chinese car trading group Kaixin Auto announces its intention to take over WM Motor completely.
Kaixin Auto has signed a non-binding letter of intent to acquire 100 per cent of WM Motor from its shareholders by issuing a certain number of new shares. Kaixin Auto’s brief announcement does not provide details on the acquisition but emphasises that WM Motor has made major breakthroughs in overseas expansion this year.
It also said the company had “launched various cooperation projects in the European Union, the Middle East, ASEAN, North America, and other regions.” In January 2021, WM Motor signed a strategic agreement with Enel X to bring WM’s vehicles to Europe, China, Southeast Asia, the Middle East and South America.
Founded in 2015, the manufacturer has sold more than 100,000 electric cars in around 200 cities in China. WM Motor offers four models named E5, EX5, EX6 as well the W6 and is about to start deliveries of its fifth model, the M7 electric sedan, which will be presented in autumn 2021. The manufacturer has two production facilities in Wenzhou and Huanggang.
About two years ago, the Chinese electric car start-up had sought to raise 500 million US dollars in a two-part Series D financing round. The money was to go towards the development of autonomous driving and other technologies and products, as well as the expansion of its sales and service channels. And this was after WM Motor had raised the equivalent of 1.25 billion euros in 2020. Nevertheless, the young company ran into financial difficulties last year due to Corona, rising material costs and patchy supply chains.
Ahead of the potential deal with Kaixin Auto, WM Motor wanted to try its luck on the Hong Kong stock exchange through a reverse takeover of Apollo Future Mobility Group. The latter is already listed in Hong Kong. WM had even applied to the stock exchange in 2022, according to Chinese media reports, but had not received a response so far. At the beginning of the month, the companies had then put their plan on hold.
It is still unclear exactly what will happen with WM Motor. What is certain is that it will continue. Mingjun Lin, Chairman and CEO of Kaixin, said: “WM Motor’s fashion technology product positioning and branding has a good match with Kaixin’s strategic development goals. Through the intended acquisition, WM Motor will gain access to more capital support to enhance the development of its smart mobility business!”
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