I was in China the last half of February doing interviews for a comprehensive report on China’s NEV sector I am writing for Wards Intelligence. It should be out in May. Everyone buy it!
One of the folks I interviewed was my old friend Freeman Shen, whom I met in the year 2000 or so when he was head of BorgWarner China. That doesn’t even come up in his list of positions nowadays it was so long ago. He went on to be a top exec at FCA and Volvo/Geely. Now Freeman is putting those years of experience and connections to good use at WM Motor, an EV startup initially known as Weltmeister, Its Chinese name remains Weima.
My Wards Intelligence report is looking at how NEVs in China are the basic unit of a digital lifestyle. I tend to think of that as meaning a way to get content to consumers, but Freeman looks at it from the other angle – as a big data gathering advice. WM’s BEVs are part of a digital ecosystem, he told me, one where owners use the connected car to meet your daily needs from paying for insurance for the car to paying for parking, electricity, and everything else Chinese already do digitally anyway using WeChat.
Rather than portraying itself as a part of an entire digital lifestyle the way NIO and Byton do, WM Motor sees itself as a vehicle company. But the vehicle is a “rolling data collector,” says Freeman.
“We are a hardware company,” he says. “The vehicle is smart hardware, a way to capture big data to improve performance.”
WM Motor is currently selling one BEV, the EX5 SUV. Freeman says “thousands” of units have been delivered since it went on sale in Beijing in December of 2018. The price before incentives is 200,000 RMB. He doesn’t fear the end of government subsidies (which is good as it happens soon.)
WM EX5 in garage under building where EV maker has an office.
“I like it that they are cancelling the (NEV purchase) incentives,” says Freeman. “We are already at a lower price point.”
It hasn’t announced sales volume goals yet, but WM Motor aims to be number one on a delivery basis by 2021, says Freeman. He emphasizes delivery to differentiate WM from EV startups that talk about volume in terms of sales but not how many vehicles have actually been given to the owner. Have no doubt, however, volume sales are Freeman’s goal. Big volume. WM Motor will launch two more models in 2019 and two models in 2020.
“I want to become the Volkswagen or Xiaomi of the EV sector,” he says. “I don’t want to be Mercedes.” Xiaomi is a very popular low-priced mobile phone brand n China.
As for his distribution model, WM Motor will do direct marketing as well as have franchised dealers, says Freeman. It is a new retail concept in China, he says, because WM Motor will have a direct relationship with every owner, even if the BEV is purchased through a franchised dealer. The dealers will help deliver the vehicle and provide aftersales service, but all the data the vehicle generates belongs to WM Motor.
One area that is crucial to any startup’s survival is funding, a lot of it. WM is funded through equity plus bank loans, says Freeman. This is one area where his immense industry cred is very helpful.
“I have a very good reputation,” says Freeman. “I did fund raising for the Geely acquisition of Volvo.”
WM Motor just finished a round of funding raising from investors including Baidu, Tencent, Sequoia Capital China, and government-backed Chengtong Fund as well as some “big SOEs,” says Freeman. This round raised more than 20 billion RMB, or nearly US $300 million.
“We are focusing on local sources of capital,” says Freeman. It has no plans to export to the U.S. “yet,” he says.
Some see ride-hailing or ride-sharing fleets as the biggest future market for BEVs. WM Motor is flexible, says Freeman. It can be B2B or B2C. Already, Beijing-based delivery service Meituan Dianping is testing the EX5, he says. “We can produce a car just for ride-hailing,” he adds. “There is a lot you can do to make the driver and the passenger safer.”