(Yicai Global) Nov. 22 -- WM Motor, a Chinese smart electric vehicle startup, is cutting salaries for all employees, including halving senior management pay, amid sluggish sales and a lack of forward movement in its initial public offering.

Year-end bonuses and other employee benefits have also been shelved this year to ease the financial pressure on the automaker, WM Motor staff confirmed to Yicai Global today after an email concerning the measures and penned by Shen Hui, chairman and chief executive, circulated online.

The Shanghai-based company’s expenses and operating costs will be cut, Shen said in the email. To that end, senior managers will only be paid 50 percent of their basic salaries from October, while everyone else will only get 70 percent, he said.

Founded in 2015, WM Motor were among the top four China’s new energy vehicle startups with its annual sales volume broken above 10,000 units in 2019, and its investors include notables such as internet giants Baidu and Tencent Holdings.

WM Motor sold just 29,284 cars from January to October this year, far fewer than Nio, Xpeng Motors and Li Auto, according to data from the China Passenger Car Association.

WM Motor filed for an IPO in Hong Kong in early June, but the listing process has made little headway since then.

With sale stagnated while the production costs have kept rising, the external financing became a vital channel to maintain the firm’s survival and development. By the end of last year, WM Motor had been through four fundraisers, banking more than CNY41 billion (USD5.73 billion) in total.

“With traditional car giants joining the new energy vehicle market, competition will become more fierce in the next one or two years,” said Bai Yiyang, manager of the research department of China Merchants Bank International Securities. “Second-tier brands of emerging automakers need to raise the funds they need for continuous investment via IPO financing.”  

Editors: Tang Shihua, Tom Litting