WM Motor: Too Aggressive To Achieve A Goal Taking Tesla 10 Years?
It is a rather aggressive goal for a company founded in 2015.
In 2017, Tesla delivered over 100,000 vehicles in total, which had increased 33% than that of 2016. The company’s first automobile Tesla Roadster was delivered in February 2008, which took Tesla 10 years to deliver 100,000 vehicles. However, an ambitious Chinese EV startup, WM Motor, aims to deliver 10,000 vehicles by the end of 2018 with targeted deliveries of another 90,000 units in 2019. It is a rather aggressive goal for a company founded in 2015.
Concerns of Safety and Subsidy
At the early phase, WM Motor’s founder, Freeman H. Shen, launched the plan of mass production and claimed that Tesla’s electric cars are high-quality but expensive while equivalents built by Chinese manufacturers are cheap but with doubtful quality. WM Motor is completely different from these two. However, looming series of queries towards EX5, WM Motor's first electric auto, appears to entail a departure from their visions.
The story began on 14th May 2018. a car equipped with the battery from Godsend Power was reported to combust spontaneously, which also used by three kinds of WM Motor's declaration model according to the new vehicle public list published by the Ministry of Industry and Information Technology (MIIT) on 16th May. Even though Lu Bin, the co-founder and strategy VP of WM Motor, responded soon that the three models will not be delivered to customers in the second half year of 2018, it inevitably dragged the new-born company to Pre-order Cancellation Wave quickly.
If the first thing is about safety, then the next is about money. Currently, the startup does not have any dealerships, so orders must go through from factory to so-called delivery places in 15 cities in China. As a result, customers are recommended to pre-order their cars from the nearest location if there is no delivery place where they live. WM Motor officially declaimed that under the influence of battery crisis, local subsidies are also applied. The Manufacture Suggested Retail Price (MSRP) of EX5 is ranged from CNY 186,000 to 247,000 , the price after applying subsidies is CNY 112,000 to CNY 164,000. The total subsidy is quite a large amount. However, another official term released in one of WM’s user group chat told a completely different story that, since 27th Sep 2018, whoever ordered a car without citizenship from the 15 cities shall be overcharged a security deposit to cover the local subsidy. Users were furious and accused that it was a fraud. Moreover, concerns of failing to deliver 10,000 cars by the end of 2018 are arising, which means due to the deduction of central government subsidy, users might or must be subject to extra payment if they get their supposed-to-be-delivered-in-2018 car in 2019.
Rhetoric and Fulfillment
WM Motor is marching on a way against what it stood for initially, affordability and credibility. To review the track of WM Motor, we shall focus on the vehicle itself. and ignore all the vehicle-related fancies WM Motor provided, such as Apps, digital services and car-sharing, For example, last year, Freeman H. Shen claimed that the model on sale next year would be qualified as L2 automated driving in an interview with a think-tank named 30 Intelligence of Chinese Automobile. ADAS(Advanced Driver Assistance Systems), which promised to be a standard, is not available to be installed in the 2018 EX5. ACC(Adaptive Cruise Control), LDW(Lane Departure Warning) and AEB(Autonomous Emergency Braking) and other functionalities will be open to optional equipment in April 2019. Both ACC and AEB are automated driving functionalities belonging to Level 1 or 2(Driver assistance and partial automation).
WM Motor did one thing right, though. Unlike NIO, who is partnered with JAC( also known as Anhui Jianghuai Automobile Group) to produce ES8 and subsequent vehicles, WM Motor decided to construct its factory based in Wenzhou city in Zhejiang province, China in 2016, which has a production capacity of 200,000 units per annum. The success of Tesla is partly due to building its own factory rather than working with outside business parties.
Reported by Nikkei, Shen, who previously was the senior vice president of Volvo Cars and familiar with the European automobile industry, said that experience and personal connections at Geely helped him a lot when he started the new business. Superior supply chain management is essential for an automobile manufacturer, which reflects in various aspects in the process of car-manufacturing and enabled the start of WM Motor’s volume delivery of EX5 SUV in late September 2018, "This is a milestone for WM Motor, and the first step in our long journey ahead," said Shen according to China Daily. As is the first company who accomplished mass production delivery among several ambitious Chinese electric-vehicle startups except for NIO, WM Motor was remarkable considering its delivery speed. One officer from WM Motor's calling center informs us that customers shall wait for about four months after paying the advance.
It is challenging to bring “luxury-alike quality to a mainstream car”. Especially in China, the competition between foreign and domestic manufacturers, and between traditional car-manufacturers and startups, is severely fierce. Mapping your customers precisely is crucial. For example, NIO aims to win the high-end customers’ heart while WM Motor portrays itself as an “affordable brand”, which we can tell from the competitive price. Even under such a rigorous subsidy policy, WM Motor still enjoys decent subventions. Chinese customers have one feature that is especially beneficial for EV startups-they care price and quality more than the brand name. EX5 may have confronted the first bar-its price(at least by 2020 when the subsidy policy will phase out completely), but the quality will take time to be testified in the future.
——Author: LinYan.Write to LinYan at LinYan@EqualOcean.com