Electric vehicle manufacturer WM-Motor has closed its Rmb3 billion ($446 million) Series C round of funding.
Tech giant Baidu led the round, together with Shanxi Financial Holding Group and Linear Venture.
WM-Motor has accumulated Rmb23 billion in funding so far from a blue chip list of investors that include Tencent, SIG and Sequoia, as well as Baidu. The startup has also been able to attract talents like Rupert Mitchell, the former co-head of Asia-Pacific equity syndicate at Goldman Sachs, to be its chief strategy officer.
Baidu said that it wanted to apply its autonomous driving technology to WM’s vehicles when it first invested in the company in 2017. In January this year, WM said that it intends to mass produce what are called Level Three autonomous driving vehicles with Baidu in 2021. That is a specific rating that refers to cars that can self-drive under specific conditions, such as brief periods of loss-of-concentration.
The government has cut subsidies for electric vehicles in recent years and it is time for manufacturers to show that they can actually deliver a high-quality car to consumers. In November last year, the Chinese Ministry of Industry and Information Technology released the names of a first batch of companies which had halted the manufacture of their electric vehicles for more than 12 months. Some have seen this as a contraction of the electric vehicle market, but others believe that it shows the government’s determination to clean up the market.
For electric vehicle companies with more reliable technology and funding, the next headache is when to deliver the car to consumers. WM-Motor said that it had delivered 10,000 vehicles to customers by the end of February - two months later than scheduled.
The complicated process is what delayed the delivery, according to WM-Motor chief executive Shen Hui. Car retailers need to help customers to apply for both central and local government subsidies and go through license applications as well.
Founded in 2015, WM-Motor produced and delivered its first vehicle in September last year. Unlike other electric car manufacturers, WM didn’t cooperate with a traditional car manufacturer for its production but set up a factory of its own. A slower speed of production means that WM-Motor has faced complaints from customers. A late delivery means that users will receive a smaller subsidy in line with the new state policy.
Other electric vehicle manufacturers are also trying to speed up their processes before consumers lose interest. NIO, a manufacturer which cooperates with JAC Motors for production, claims to have delivered 11,348 cars by the end of last year. XPeng Motors, another leading industry player, has been in no rush to set a deadline for itself but says that it is aiming to deliver about 30,000 vehicles by the end of this year.
Although last year was not great for traditional car manufacturers, it was superb for electric vehicle makers. The number of cars sold in China dropped 2.8% to 28 million, while the sale of new energy vehicles increased by almost 62% to 1.26 million, according to data from the China Association of Automobile Manufacturers.
This doesn't mean that Chinese electric car manufacturers can rest on their laurels. Customers are getting pickier on quality, and the manufacturers themselves are starting to feel the pressure from international players too. Tesla’s entrance into the Chinese market has not only been high-profile, the US electric vehicle maker also announced a huge discount on March 1 of as much as a 50%.
“The enemy is now at the gate,” NIO’s investor Li Xiang said. “Time is limited for Chinese car manufacturers.”