The deal is subject to a “wide range of factors” including regulatory approvals, the filing said. Apollo is involved in EV engineering and tech services but does not make cars.
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Tesla owners in China protest against price cuts as consumers tighten budgets
Tesla owners in China protest against price cuts as consumers tighten budgets
“Gaining access to fresh capital is vitally important for WM since it may be liquidated due to the financial squeeze,” said Ivan Li, a fund manager at Loyal Wealth Management in Shanghai.
The rescue could signal a wave of consolidation amid fierce competition in a sector that encompasses around 200 EV companies.
“Some other [mainland] EV start-ups will be desperate to raise funds soon,” Li said.
Under a reverse merger, a private firm, after merging with a listed company, becomes public as its core assets are injected into the listing vehicle. Such deals normally involve new share issuance to raise fresh funds.
Tesla’s price cuts could revive sales growth as rivals hold back on discounts
Founded in 2015 by Freeman Shen Hui, a former CEO of Zhejiang Geely Holding Group, WM grappled with severe financial problems in the second half of 2022.
WM cut staff salaries by up to 50 per cent in October amid weak sales and widening losses, Shanghai-based financial media outlet Jiemian reported. The company was also forced to close showrooms to reduce costs. In Shanghai, for example, the brand closed about half its locations.The carmaker sold about 32,300 electric cars in the first 11 months of 2022, down 10.3 per cent on year despite a 96 per cent surge in total EV sales in mainland China last year.
In 2021, WM lost 1.95 billion yuan (US$289 million), 68 per cent more than in the previous year.
Demand for premium electric cars in China is declining as lay-offs in the technology industry and the pandemic-ravaged economy are pushing buyers towards cheaper, locally made electric cars, instead of imported models or foreign brands like Tesla.
Tesla has slashed prices on its Shanghai-made Model 3 and Model Y vehicles twice in three months to lure customers back to its showrooms. The basic edition of the Model 3 now costs 229,900 yuan – an 18 per cent cut following the two rounds of price cuts.
