During the press release on 8th March of 2019, the CEO of WM Motor (威马汽车) SHEN Hui (沈晖) revealed intriguing insights on WM Motor’s current operations and has declared the inspiring near future of the EV and autonomous driving industry.
“I am an Engineer. I am not really familiar with these IPO things; we focus our energy on enhancing our product. Besides, if WM Motor to be listed, it should be higher valued than Tesla. Because Tesla produces luxury cars, whereas we target the middle class” said Shen Hui in response to a question about WM Motor’s possible IPO price.
With its strategic partnerships in autonomous driving hardware development and experienced management team, together with “affordable” and innovative EV cars; WM Motor has always been a magnet for the Venture Capital. However, Shen Hui revealed that much more has yet to come.
Currently WM Motor is the second largest EV Start-Up with around USD 1 billion fundings. It comes just after NIO and followed by Xiaopeng Motors. "We are not destitute of new investors; in fact, we are so picky in cooperating with the investor." said the CEO. Indeed, WM Motor has been invested by the VCs that have significant cooperation and investment experience in autonomous driving and mass data processing, such as Sequoia and Baidu.
“We have a gradual long-term development plan that consists of three stages. The first is to popularize the smart EVs. We are at the end of this stage and moving to the second stage, where we start to produce hardware for automated driving cars. The final stage is to integrate the big data and create an entirely connected autonomous driving ecosystem, but we are still far away from the final stage” WM Motor is currently cooperating with Baidu for the second stage.
Back to the market, the CEO thinks if WM Motor could keep producing smart EVs at a price range of CNY 200,000 and 300,000, they would target the biggest market in China that young professionals could afford. As a matter of fact, National Bureau of Statistics of China reveals that an average salary of an employee at IT and financial industry is ranged between CNY 120,000 to 130,000 per year; which means a price of CNY 200,000 would be highly affordable for a typical married couple to buy WM Motor’s cars.
While the CEO is consistently focusing on the price of WM Motor cars; he is aware of the regulatory challenges. Shen Hui thinks continually updated regulations and subsidy policies of China, creates a blurred image in the minds of the customers and the uncertainty ultimately affects the entire EV market.
For some, Tesla comparison may be seen as an unscalable one. However, if WM Motor could successfully have the middle class Chinese, it would not be so long for one to compare WM Motor to Tesla. Yet, WM Motor has never been and will never be the only player who tries to build the presence in the abundant China Market.
NIO, for instance, is yet another smart EV Maker targeting the same cake. NIO’s EV sales were USD 491.8 million in the fourth quarter of 2018, representing an increase of 137.0% from the third quarter of 2018. NIO targets a slightly more affluent customer segment with a price of around CNY 450,000 for ES8. However, NIO commits on price stability while ensuring better efficiency and quality in every new product. In fact; in the fourth quarter of 2018, NIO has spent USD 220 million on R&D, which represents an increase of 83.8% from the fourth quarter of 2017. The increase in research and development expenses was primarily attributed to the development activities of ES6 and SUV models.
In terms of the product characteristics and target customer, NIO seems to be a better scalable example if compared to Tesla, but not WM Motor. On the other hand, WM Motor’s target group might be a bigger and gigantic one.