Starting in October, WM Motor is paying only 70 percent of normal salaries to regular employees and 50 percent to management, according to local media.
WM Motor, once one of the most high-profile new car makers in China, appears to be facing new financial difficulties.
Starting in October, WM Motor is paying only 70 percent of normal wages to regular employees and 50 percent to management, local media outlet The Paper reported yesterday.
These new financial measures are aimed at helping WM Motor survive the capital winter and get a better performance in the future competition, the report said, citing sources close to the company.
WM Motor has not yet responded to the rumors, the report noted.
WM Motor was once one of the best-known electric vehicle companies in China, but it hasn't done so well in the past two years.
The company had been actively reporting monthly sales figures in 2020, but since last year has often not been reporting that number.
WM Motor launched its first model in September 2018 and has cumulative sales of 83,495 units of all its models as of December 31, 2021, according to its Hong Kong IPO prospectus filed earlier this year.
In 2019-2021, WM Motor's vehicle sales were 12,799, 21,937 and 44,152 units, respectively.
The company currently has one production base in Wenzhou, Zhejiang and one in Huanggang, Hubei, with a maximum annual production capacity of 100,000 and 150,000 units, respectively.
The company's revenue was RMB 1.76 billion, RMB 2.67 billion and RMB 4.74 billion in 2019-2021, with growth rates of 51.6 percent and 77.5 percent in 2020 and 2021, respectively, according to the prospectus.
It has gross losses of RMB 1.03 billion, RMB 1.16 billion, and RMB 1.95 billion in 2019-2021, respectively.
It has cash and cash equivalents of RMB 3.68 billion as of March 31, 2022.
"Our operations require significant capital. Failure to obtain adequate financing on acceptable terms could have a material adverse effect on our business as well as our results of operations," the prospectus reads.
The company's current models on sale include the EX5, EX6, W6, E5 and plans to launch the M7 flagship sedan later this year.