In 2003, a new automotive startup was founded in California, but had only a 10% chance of success, according to its current CEO. By 2019, the same company had already made close to a million passenger cars and had become the leading EV maker in the world.
This company is Tesla, and besides electric cars, it has expanded to other products, like the Tesla Powerwall/Powerpack/Megapack stationary batteries and Solar Roofs.
Last year, the global electric car fleet exceeded 7.3 million, rising by over 2 million cars compared with 2018.
So, it’s no wonder that other startups, like Rivian, Lucid, Sono, and Lightyear, just to name a few, have started popping up everywhere, and no other place has had more startups than in China.
But one big advantage that Tesla had in the beginning, and that the current ones lack, is time. Whereas the Californian brand had 5 years to present its first model (2008 — Roadster), and an extra 4 to start its first mass-produced EV (2012 — Model S), still catching most of the legacy OEMs with their pants down, the new generation of EV startups has to more quickly catch the ball and start running. They have to make in a couple of years what Tesla took 5 to achieve.
Still, China remains a hotbed for EV startups, as it is the world’s largest electric car market, with roughly half of total global plug-in sales each year. Additionally, it enjoys strong governmental support, with Beijing spending about $60 billion to support the local industry over the last decade in an effort to clean the air of its cities and decrease dependency on foreign oil. So, it is natural that a number of promising EV startups are showing up there.
While some of most notable Chinese startups (Byton, Singulato, or NEVS) are yet to deliver units to their soon-to-be-customers, other Chinese EV startups have already hit the market; and while some of them are focused on small, affordable EVs — like Dearcc and Kandi — and are suffering (like most in that category) due to last year’s subsidy cut; others started at the top end of the market, like NIO and Qiantu, and are finding that local buyers in that price range aren’t very adept at buying from domestic makers. NIO, however, is finding some success with its lower priced ES6, which is still in the upper middle half of the market but has a larger pool of potential buyers.
Somewhere between the NIO ES6 and the core of the market, we have Xiaopeng and WM Motor, with both companies starting their careers with compact crossovers, the first with the Xpeng G3, and the second with the Weltmeister EX5. Both companies raced with NIO for the title of best selling startup in 2019. (Nio won the race, with 20,751 units sold, ahead of Weltmeister’s 16,823 and Xpeng’s 14,191 – data based on independent 3rd party data for new vehicle mandatory liability insurance.)
Interestingly, this year both Weltmeister and Xiaopeng will play their second card in the game, but this time they will compete in different categories, with the first launching a midsize crossover, the EX6 Plus, while the second goes after the full-size car segment, with the P7.
In the case of WM Motor, the Shanghai-based company is backed by the technology giants Baidu and Tencent, and sells its EVs under the name Weltmeister. The first production model, the EX5 compact crossover, first left Wenzhou factory lines in late 2018.
The current Wenzhou factory has a 100,000 unit capacity, and the company is already expanding its production capabilities by building a second factory, in Huanggang. In addition to these plants, WM Motor also has R&D facilities in China, Germany, and the USA.
To know more about WM Motor and its Weltmeister brand, I interviewed Rupert Mitchell, Chief Strategy Officer of WM Motor.
Can you make a short story about how WM Motor came to be and what makes it stand out from its competitors?
WM Motor was launched through the collective vision of a number of China’s automotive industry veterans eager to enter the race and build the car of the future. WM Motor’s CEO and founder, Freeman Shen, came from Geely, where he was responsible for the acquisition of Volvo from Ford in 2010, and the subsequent transition of its manufacturing operations to China. His vision for WM Motor was, first and foremost, to offer reliable, high-quality, long-range, smart electric vehicles to the mass market in China for the first time.
Freeman recognised that, in order to achieve this, WM’s vehicles had to be built with customer experience as first principle. This led to the development of our three core technologies — the Living Motion electric powertrain, the Living Pilot intelligent driving assistance system, with L2 ADAS autonomous driving features, as well as the Living Engine operating system, which offers smart connectivity and interactive features in the cabin and transforms the vehicles from a mobility tool to a fully customized interactive space.
This core technology trio is WM Motor’s competitive advantage. The Living Engine is equipped with some of the most advanced connectivity functions, which are added to and updated via regular OTA updates. The Living Engine features an advanced AI assistant called “Xiaowei,” that can control vehicle functions and apps automatically through natural language voice commands.
With over 150 years of auto industry experience among them, Freeman and the wider leadership team at WM recognised that key to the success of automotive startups is to focus on getting to product first and ensuring that R&D and manufacturing procedures are brought in-house. This led to the construction of WM Motor’s first fully-owned mass production facility in Wenzhou, Zhejiang Province, which has a current annual production capacity of 100,000 units (maximum capacity of 200,000 units p.a.) and was completed in December 2017.
WM Motor’s long-term strategy is to become a supplier of smart mobility services in China’s emerging sharing economy. WM’s product offering already extends into several auto-related service markets, including charging services, ride hailing, ride sharing, autonomous driving, and rental services. Charging and ride sharing services are already integrated through WM’s proprietary app, GET’n’GO, which functions as a smart mobility portal for WM users and will eventually grow to become the go-to solution that brings all of our users’ mobility needs to one place.
In one sentence, how would you define 2019?
From the perspective of the EV sector, I would define 2019 as a short-term setback to an otherwise irresistible market transition, caused by China’s first ever auto recession coinciding with subsidy reductions, trade war impacts, and associated influences on consumer confidence.
After the success of the EX5 compact crossover, what are your expectations for the new EX6 midsize model? Are there any other models set to be launched this year?
The success of the EX5 is due in large part to its accessibility and attractiveness for the largest segment of China’s consumer market, which, until the EX5’s release, did not have access to long-range, pure electric vehicles with advanced driver assist functions and smart connectivity features.
The EX6 Plus is WM Motor’s second model based on its first proprietary vehicle skateboard and shares the same core technology architecture. The EX6 Plus is another pure electric, long-range smart SUV, which comes with a larger interior space (seating up to 6 with plenty of storage) and a redesigned, sporty exterior shape. The EX6 Plus is also equipped with WM Motor’s newest Thermal Management 2.0 battery system that provides industry-leading range preservation in cold climate conditions and maximises battery longevity.
WM’s product strategy is to release one new vehicle model per year. In keeping with this strategy, our first sedan model will be unveiled at this year’s Beijing Auto Show.
Does WM Motor have a sales target for 2020?
2019 was WM Motor’s first year of vehicle deliveries, and it’s often difficult for new market entrants to make precise predictions of their sales growth. Even throughout the harsh economic headwinds of last year, WM Motor was able to make and deliver 16,810 vehicles, making it the best selling pure electric A Class SUV in China. Notwithstanding the short term Coronavirus related market slowdown, signs are pointing to 2020 as being much kinder to China’s auto industry and, given our early success, solid product line-up and excellent feedback from our early adopters, we are optimistic that we will see significant sales growth into 2020 and beyond.
You have R&D studios in China, Germany, and the USA. How do the different teams work together in the company?
WM Motor has been forming an international team focused specifically on research and development, a core part of our business. As of December, 2019, WM Motor had filed 1,261 patents, of which over 100 were related to artificial intelligence systems for our Living Engine OS.
While we do have some small scale international operations, our focus has been on expanding our national presence in China. The business is headquartered in Shanghai, with global R&D based in Chengdu along with a self-driving technology centre, located in Mianyang, Sichuan Province.
Is WM Motor open to make partnerships with other OEMs?
WM Motor was the first pure electric vehicle startup in China to develop fully-owned mass production capabilities, allowing us full control over product development and manufacturing quality without the often cumbersome and costly compliance processes that come with manufacturing joint ventures or third party agreements.
In saying that, WM Motor has much to offer in the ways of e-powertrain, manufacturing and other core technologies, and would be open to opportunities for collaboration with other automakers through the sharing of such resources.
WM Motor has formed very successful collaborations with other businesses for the sourcing of software and hardware systems; such as our motor modules from Borg Warner; our L2 ADAS technology, which we co-developed with Bosch; and our Vehicle-to-Home capabilities integrated through Xiaomi’s Mijia platform.
Which features (electric powertrain, autonomous driving, and sharability) do you think will be the most important in the near future, and how is WM Motor positioned regarding them?
Among the common business models of new entrants to the automotive market, there are clear trends towards electrification, connectivity, vehicle-to-home integration, and in-cabin entertainment. In light of this, what we see are startups taking market share from the established OEMs by offering alternatives that the larger automakers have been slow (or unwilling) to develop.
Carmakers are pushing to develop their own unique e-powertrain (“skateboard”) capabilities or borrowing from those who have platforms readily available. These powertrains will be increasingly modular, whereby vehicle form factors can be swapped out without the need to redesign the entire chassis. Developing and building a proprietary skateboard chassis in-house has dramatically reduced manufacturing complexity and new product lead time.
Features which support mobility-as-a-service (MaaS) applications are also incredibly important for all new vehicle models to compete in a market where connectivity is king. As part of its mobility-as-a-service (MaaS) strategy, WM Motor has deployed a fleet of 1,000 vehicles available for rent in Hainan, China, through WM Motor’s GET‘n’GO mobility portal. Under the pilot program, WM Motor rents out vehicles to tourists on a daily basis, with collection and return centres set up at two of the island’s major airports. Hainan was the location of choice for the pilot programme due to its being a popular tourist location (China’s Hawaii), with annual tourist visits growing to around 119 million in 2019.
Apart from renting services, WM has also entered the ride hailing and ride sharing segments, offering its EX5 model on China’s most popular hailing platforms. Due to our OTA update capabilities, WM can add new features to fleet vehicles as customer preferences shift and new technologies emerge, and can therefore offer unique customization options to ride hailing or car sharing users, such as automatic pick-up scheduling, phone-to-car control functions, and vehicle-to-home connectivity.
Which are the future plans for the company? Do you plan to export in the next couple of years?
WM Motor will continue to fulfill its commitment to releasing one new vehicle model per year, while expanding our product line into the emerging sharing economy. Our vision includes an eventual expansion into international markets, both for our EV’s and MaaS services, and we are currently assessing the suitability of overseas markets for export at the appropriate time.
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