WM Motor, once among the top four of China’s new electric vehicle (EV) startups, has recently sliced staff salaries by up to 50% amid weak sales and widening losses worsening its financial woes.
Da Ji Yuan, citing an internal memo circulated online on November 22, reported that senior managers will receive only half of their basic wages starting October, and 70% for the rest.
The company will also change the monthly payday to the 25th instead of the 8th each month.
All bonuses, including extra payment, retention pay, and year-end bonus will no longer be available. The government’s 5% car purchase subsidy will also be taken away.
Regarding the reasons for slashing staff wages, Shen Hui, chairman of WM Motor, said in the letter that the company is not only impacted by the severe COVID pandemic in Shanghai, Beijing, Chengdu and many other places, but also faces significant supply chain problems.
Shen added that rising raw material costs, coupled with untimely supply challenges have impeded the firm’s production capacity and normal operation.
According to SCMP, WM sells their battery-powered vehicles at prices between $20,900 and $27,900, catering to a large community of Chinese middle-class motorists.
Meanwhile, its domestic competitors, including Xpeng, Li Auto and Nio, set product prices above $27,900 to compete against Tesla’s Model 3 and Model Y electric cars.
In terms of sales volume, Yi Cai, citing China Passenger Car Association, reported that WM Motor sold only 29,284 electric vehicles in the year’s first 10 months, far fewer than that of its rivals.
In October alone, the Shanghai-based EV maker sold 1,117 cars and could not enter into the top 15 list.
As reported by Da Ji Yuan, despite WM’s reporting shrinking revenue and cutting staff wages, the company’s chairman still receives sky-high pay, which draws lots of public attention in China.
Last year, Shen’s salary reached as high as $176 million (1.26 billion yuan), the equivalent of nearly 30% of the company’s revenue.
In addition, of the $244 million (1.75 billion yuan) paid for top management, Shen’s figure amounts to 72% of the total payment.