Catches Fire 4 Times in 35 Days -Would You Dare to Drive? Debt-Ridden China’s New EV Industry.

Recently, the news that Chinese electric vehicle company WM Motor (Weltmeister) is laying off employees, closing stores and possibly even going out of business sparked heated online discussions. The company has a glamorous history of being one of the first to build electric cars in China and touted as a new force in car manufacturing. It was also called the "Four Little Dragons of New Power" by netizens, along with other Chinese motor manufacturers Nio, Xiaopeng, and Li Auto. The company also achieved the number one sales volume of new power bicycle models in 2019. But now, it is in a sales slump and in debt, with its buildings and headquarters in Shanghai lying vacant and in despair.

Nevertheless, WM Motor has fared better than many of its counterparts in China's new energy vehicle industry. Despite burning through over 30 billion yuan in financing, the company has managed to produce at least one vehicle. In contrast, there are numerous new energy car companies that have exhausted all their funding and yet failed to produce a single car.

For example, Byton Motors, which burned 8.4 billion yuan and failed to launch a car on to the consumer market; Reech Automobile, which raised more than 10 billion yuan and was once considered to be the most stable car company in new energy, did not mass-produce a single car before it closed down; In addition, there is Singulato, which has raised 17 billion yuan. After 8 years of operation, the car is still in the “PPT" stage of mass production; And of course, there is Evergrande. According to its management, Evergrande has invested a total of 47.4 billion yuan in the new energy vehicle industry, but until December 30, 2022, Evergrande has only delivered 324 vehicles to customers. Currently, the company is entangled in numerous lawsuits and facing ongoing legal battles as its creditors pursue legal action against it.

Of course, there are also many new energy vehicle companies that were set up simply to obtain state subsidies, and countless others have gone out of business.

After the new year in 2023, the restrictions imposed by the US on China in the chip field will be further escalated. Saying goodbye to the "subsidy era" means that the electric vehicle industry will switch from policy-driven to market-driven. Coupled with the chip ban, it is bound to worsen the development of EVs. The new energy vehicle industry, which is heavily supported by the government, will struggle to survive in a tight spot. It is not difficult to imagine that widespread bankruptcy or a large number of company failures, similar to the chip industry, will occur.