Li Xiang: NIO, XPeng, and Li Auto Never Falsify Financing

On September sixteenth, Li Xiang, Chairman and CEO of Li Auto, expressed on Weibo, “Over the past few years, every single new energy vehicle company that has inflated or falsified financing amounts has completely disappeared. Those who tried to make a comeback ultimately failed. The investment partners who collaborated in the fraud also generally performed very poorly in recent years because of shared values.”

Regarding Li Xiang’s assertion, some netizens raised doubts and requested, “Among the car companies recently announced to have obtained financing, which ones are NIO, Neta, Evergrande, and XPeng referring to?” Li Xiang reposted a remark saying, “NIO, XPeng, and Li Auto have never fabricated or falsely reported any financing. The three founders personally invested billions of dollars in real money. Those founders who engage in false reporting and fabrication generally don’t invest a penny themselves but register a bunch of affiliated companies for personal gains.”

Li Xiang’s veiled criticism of which automobile firm has acquired blended opinions from netizens, however extra feedback level in the direction of WM Motor.

SEE ALSO: WM Motor and Kaixin Auto Sign a Letter of Intent for Merger and Acquisition

WM Motor, previously often called one of many main firms within the new power car sector, was established in January 2015. It was based by Freeman Shen, former Vice President and Director of Geely Holding Group, and former Senior Vice President of Volvo Cars and Chairman for China area. With in depth expertise within the automotive trade, WM Motor gained assist from varied capital sources together with SAIC Motor Corporation, Tencent Investment, Sequoia Capital China, Baidu Inc., amongst others. From 2017 to 2022, WM Motor accomplished a complete of 12 rounds of financing (A-D rounds), elevating roughly 35 billion yuan (＄4.8 billion) from main markets. This made it the brand new power car start-up with the very best pre-IPO financing quantity at the moment; whereas NIO, XPeng, and Li Auto, one other firm throughout that interval didn’t exceed 20 billion yuan (＄2.7 billion) in pre-IPO financing.

In September 2018, WM Motor’s first mass-produced car, the EX5, was launched. In 2019, WM Motor delivered a complete of 12,799 automobiles all year long, rating second amongst new power car firms solely after NIO. However, amidst the backdrop of hovering gross sales for brand new power car startups, WM Motor discovered itself in a deepening operational disaster. From 2019 to 2021, WM Motor bought a cumulative whole of 78,900 new automobiles however incurred losses amounting to 13.632 billion yuan (＄1.9 billion) over three years. On common, every automobile bought resulted in a loss exceeding 170 thousand yuan (＄23 thousand ).

Considering WM Motor’s previous expertise, it has virtually relied on exterior financing to outlive. That is why cash-strapped WM Motor is making each effort to hunt an IPO financing with a purpose to resolve the present operational disaster. According to Kapbook, as of March 2022, the corporate’s whole money and money equivalents amounted to solely 3.678 billion yuan (＄0.5 billion). If they can’t go public in a well timed method and receive new capital injection, this cash won’t final lengthy.

WM Motor has been searching for an IPO for a very long time. It has beforehand utilized to checklist on the Science and Technology Innovation Board and The Stock Exchange of Hong Kong, however each makes an attempt resulted in failure. As a consequence, WM Motor has set its sights on a backdoor itemizing.

On January eleventh, APOLLO disclosed a significant acquisition announcement. The firm plans to amass all of the issued shares of WM Motor Global Investment Limited, a wholly-owned subsidiary of WM Motor Technology Group Company Limited (known as “WM Motor”), for about 20.23 billion US {dollars} (roughly HKD 15.854 billion). The settlement might be carried out by way of the issuance of 28.8 billion shares at a value of HKD 0.55 per share.

However, simply when the skin world thought that WM Motor might efficiently go public by way of a reverse merger, APOLLO immediately introduced on September tenth to terminate the RTO course of. This implies that WM Motor’s plan of going public by way of a reverse acquisition, which had been deliberate for so long as 8 months, resulted in failure.

Just as the skin world thought that WM Motor is likely to be in massive hassle, on September eleventh, Kaixin Auto immediately introduced that it had signed a non-binding letter of intent to amass 100% fairness held by shareholders of WM Motor. Strangely sufficient, WM Motor didn’t launch this information concurrently. It is known that Kaixin Auto is a used automobile seller and went public on NASDAQ in May 2019. In August 2021, it established a brand new power car division and shifted from being a used automobile seller to manufacturing new power automobiles. However, Kaixin Auto’s monetary scenario shouldn’t be optimistic because it has been constantly shedding cash since 2019, with its inventory value remaining low and even dealing with the chance of delisting at one level.

As the automobile manufacturing enters the second half, the funding threshold required by new forces within the trade is getting larger and larger. In order to make sure adequate monetary assist for analysis and improvement in addition to growth, many automotive firms are searching for IPOs to resolve their funding difficulties. For instance, Neta, Avita, GAC AION, Zeekr Automotive, and so on., are all searching for listings on the secondary market.

But this additionally requires a sufficiently giant market competitors, whether or not it’s Zeekr, GAC AION, or WM Motor, the shareholders behind all of them have robust capabilities and can present adequate capital assist. However, each WM Motor and Kaixin Auto aren’t optimistic when it comes to operations and funds. Especially for WM Motor, it appears extra like a brand new drive firm deserted by the occasions. Its merchandise lack technological innovation and its enterprise scenario has lengthy been on alert. In this regard, the mix of Kaixin Auto and WM Motor doesn’t appear to obtain optimistic expectations from the market.