(Yicai) Sept. 11 -- The reverse merger of WM Motor Technology, a cash-strapped Chinese electric vehicle startup backed by Baidu, into the Hong Kong-listed arm of Apollo Future Mobility Group has been called off.

WM Motor and Apollo Future have agreed to terminate the takeover deal after taking many factors into consideration, including global stock market turbulence, geopolitical conflicts, financial market uncertainty, and the short-term economic recovery following the pandemic, the latter said on Sept. 8.

The deal’s demise ends the carmaker’s latest plan to go public in Hong Kong. The USD2 billion takeover had been seen as a way for Shanghai-based WM Motor, once one of China’s most-promising EV startups, to survive in the country’s increasingly cut-throat auto market.

WM Motor will continue to try and raise money, with founder and Chief Executive Officer Freeman Shen noting on Weibo yesterday that he went to Munich and New York this week as “a good gain takes a lot of pain.”

The company has previously raised around CNY41 billion (USD5.7 billion) from investors, including Baidu, Tencent Holdings, and Agile Group.

In January, Apollo Future said it would buy WM Motor Global Investment by issuing 28.8 billion shares to WM Motor, which failed to complete a standalone initial public offering in Hong Kong last year. After the backdoor listing, the pair were to jointly develop and mass-produce the smart sports sedan X@A, priced at over USD100,000 apiece.

The automaker lost CNY17.4 billion in the past three years due to declining sales. Last year, sales fell 33 percent to just 29,450 cars, according to data from the China Passenger Car Association.

This year, it has faced factory closures, employee salary demands, as well as sales channel and after-sales service outages. In July, a Chinese court lifted a high-level consumption ban on Shen issued the month before.

WM Motor will start to export its vehicles and restore its production gradually, it said during the unveiling of its smart operation system Living Engine 2.2 in July.

Editor: Martin Kadiev