Electric cars from bankrupt Chinese automakers are losing functionality

The rapid development of the Chinese electric vehicle market has an unpleasant side effect – unviable companies leave it, often leaving customers alone with problems. The products of the company WM Motor, which went bankrupt in 2023, are a clear confirmation of this, since their functionality deteriorates over time.

Image source: Neta Auto

Bloomberg, as usual, decided to reveal the “problems of the little man”, taking as an example the story of a Shanghai resident named Mu, who in 2022 became the happy (at that time) owner of an EX5 electric car from WM Motor. Now, when the second year has already passed since the bankruptcy of this car manufacturer, Mu is fully feeling the consequences. He cannot support the car using an electronic key transmitted via Bluetooth, the on-board multimedia system works with failures, the maps of the navigation system do not update, and watching streaming video cannot boast of stability.

Formally, the car performs its transport functions properly, and it is cheaper to operate than its gasoline predecessor. In addition to the “fading” of the intelligent functions of the electric car, there are problems with insurance and potential difficulties in finding spare parts in the future. Some insurers have begun to raise prices on contracts for owners of cars of problematic brands.

The curtailment of subsidies amid increased competition, which has led to “price wars”, has led to the strengthening of the positions of dominant players like BYD in the Chinese electric vehicle market, while the existence of small businesses has been threatened. For example, just a little over a year after starting operations in the Chinese market, Jiyue Auto faced the need to find additional sources of funding and reduce the volume of production of electric vehicles. Owners of the latter often work part-time as taxi drivers to justify the purchase and morally compensate for the loss of functionality of on-board electronics. A secondary market for spare parts for cars of bankrupt brands has also formed in China, which has become a kind of “online dismantling”. Hackers have appeared who install unlicensed software on the on-board systems of cars, partially restoring the lost functions.

Bloomberg also reported on the misadventures of one Neta S owner who was unable to repair the on-board entertainment system display due to the automaker’s financial problems and a shortage of components. Software updates have become less frequent, the hapless owner noted, and bug fixes are now less effective. Neta Auto itself hopes that the situation will improve by April. Against this backdrop, buyers are increasingly looking to larger players in the Chinese market when choosing their next car, only increasing consolidation.