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A handout picture of Shell Recharge electric vehicle (EV) charging hub, Shenzhen Bao'an International Airport, Shenzhen, China September 19, 2023. Courtesy of Shell/Handout via REUTERS Image used for illustrative purpose.
Chinese electric vehicle startup WM Motor has filed for bankruptcy, marking the demise of a promising standout among China EV makers 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 had announced in September a non-binding acquisition term sheet with the troubled EV maker.
The deal came after WM Motor's backdoor listing through a reverse takeover with Hong Kong-listed Apollo Future Mobility fell through.
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.
Founded in 2015 by renowned auto veteran Freeman Shen, WM Motor was seen to be among rising Chinese EV startups Nio , Li Auto and XPeng. Its backers included Chinese tech giant Baidu and Shanghai's state-owned asset regulator.
But the Shanghai-based startup was struggling to eke out profits in the capital-intensive auto sector.
WM Motor's annual losses doubled to 8.2 billion yuan ($1.13 billion) over the three years to 2021, according to its stock prospectus released in June 2022 for a planned Hong Kong IPO.
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.
Concerns remain, however, over consumer spending on big-ticket items such as cars amid a shaky post-COVID economic recovery.
($1 = 7.2871 Chinese yuan renminbi) (Reporting by Qiaoyi Li, Zhang Yan and Brenda Goh Editing by Shri Navaratnam and Kim Coghill)