WM Motor's EX5: cheap cells, three fires, and a recall that began the slide to bankruptcy

WM Motor was the establishment startup of China's EV wave: founded by Shen Hui, a Geely and Volvo veteran, it sold 16,876 cars in 2019 and its EX5 was briefly the best-selling startup EV. To keep the volume model cheap, some batches ran cells from Zhongxing Gaoneng — a ZTE subsidiary new to automotive cells — 75Ah ternary packs at 215Wh/kg.

In October 2020 three EX5s burned within a month, one exploding on October 27. WM filed a recall of 1,282 vehicles with the market regulator: cells made between June 8 and September 23, 2020 carried impurities from the supplier's production that caused abnormal lithium plating and, in extreme cases, short circuits and fire. The recall was 3.6% of everything the company had ever sold.

The fires marked the brand at the moment it was trying to list. Sales fell from 39,095 in early 2021 to 29,358 a year later; losses for 2019–2021 passed ¥17 billion. In October 2023 a Shanghai court accepted pre-reorganisation, and the founder who had said 'survive, like a beast of burden' was running a company in bankruptcy.

Impure cells from a cheaper supplier caused lithium plating and fires; the recall cost trust, sales fell from 39,095 to 29,358, and losses passed ¥17B in three years.

The cells came from Zhongxing Gaoneng, a ZTE subsidiary new to EV cells — impurities mixed in its production caused abnormal lithium plating and short-circuit fires

Three fires in a month forced a recall of 1,282 EX5s — 3.6% of everything WM had sold — and every later fire headline quoted the recall

Trust was the funding model: sales fell from 39,095 to 29,358 a year after the recall, losses passed ¥17B in three years, and the Shanghai court took the case in 2023

An EV's battery supplier is its safety department — impurities from a cheaper cell maker became fires, a recall, and a trust bill no IPO could pay.