China EV maker WM Motor gets $1.7b in debt financing

Shanghai Pudong Development Bank led the syndicate of 11 banks. The four largest state lenders, Industrial & Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank, are participating.

The previous equity funding round was led by SAIC Motor and featured an array of local government vehicles from the likes of Hubei, Anhui, Hunan, and Guangzhou provinces. It was presented as a model for Shanghai’s government-enterprise cooperation scheme. 

Existing investors such as Baidu, SIG Asia, and Yingke Capital also took part. Baidu and Baidu Capital contributed to a funding round of undisclosed size with SIG and Ameba Capital in 2017. Baidu Capital then led a RMB3 billion Series C in 2019, supported by state-owned fund Taihang Industrial Fund and Linear Venture.

WM is positioned as a low-end player among China's independent EV makers, targeting commercial vehicles. However, the company embarked on a rebrand earlier last year, hiring the likes of singer Jam Hsiao as a spokesperson. WM claims that sales to individuals born after 1995 increased 43.4% year-on-year in the first six months of 2020. Families accounted for 69% of overall sales.

In January, WM's W6 became the first domestic model capable of unmanned driving in specific scenarios to enter mass production. It is supposed to be capable of unmanned parking, a function developed in collaboration with Baidu. Pre-sales will begin in March with deliveries starting from April.

Following a difficult 2019, China’s EV industry saw two IPOs in 2020 - Li Auto raised $1.1 billion through a NASDAQ offering and then Xpeng tapped the New York Stock Exchange for $1.5 billion. With Nio listing in 2018, WM is the last of China's best-funded EV start-ups in private hands.

Real estate developer Evergrande Group has ambitions to challenge them, raising HK$4 billion ($516 million) last year for Evergrande New Energy Vehicle. It entered the EV space with the acquisition of Sweden's NEVS, also in 2020. 

Most recently, US-based EV maker Faraday Future - which is backed by Yueting Jia, a Chinese tycoon who filed for bankruptcy in 2019 - announced plans to list in the US through a merger with a special purpose acquisition company (SPAC).

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