Battery strategy error, Watma's financial crisis caused shutdown

On June 28, Shenzhen Watma Battery Co., Ltd. issued a notice to all employees, publicly acknowledging for the first time the "financial difficulties" the company has encountered in the past six months, and stated that in order to solve the impact on the career development of all employees caused by the company's insufficient orders and financial difficulties, the company's senior management has decided after strategic research: All employees will have a six-month holiday starting from July 1, 2018.

At present, a person from Waterma has confirmed this news to the media. We also contacted the public relations department of Waterma, who said that he had resigned in March this year and was unable to respond to this at present.

Since the beginning of this year, there have been continuous reports of "Waterma is unable to pay employees' wages on time", "unable to pay employees' five social insurances and one housing fund on time", "the parent company is unable to repay debts and multiple bank accounts are frozen". On April 1 this year, Waterma's parent company, Jianrui Woneng, issued an evening announcement stating that the company had overdue debts of 1.998 billion yuan, mainly bills payable and bank loans. The company will actively negotiate with suppliers and customers, and communicate with banks and other financial institutions to resolve supplier debt issues and bank overdue issues. On April 2, Jianrui Woneng's stock hit bottom and was cold, and news about Waterma's funds, debts, losses, and frozen accounts were exposed one after another.

Zhong Mengguang, secretary to the chairman of the Watma Group, also once admitted Watma's strategic mistakes, saying that there was a misjudgment of the impact of new energy industry policies and that overly aggressive expansion caused cash flow problems, but the company was confident that it could get out of the predicament.

In addition to funding, Wattma's market performance this year has also shown signs of falling behind. From 2016 to 2017, Wattma ranked third among domestic power battery companies for two consecutive years, but data from January to May this year showed that the third place that once belonged to Wattma has been replaced by Guoxuan High-tech, and it has fallen out of the top ten.

This is largely related to Watma's rather single product line. As the industry's requirements for battery range increase and policies lean toward high-density, long-range batteries, Watma, which focuses on lithium iron phosphate batteries, has been facing challenges from ternary battery companies.

At the beginning of this year, Li Yao, chairman of Wattma, revealed for the first time that the company will build a ternary battery production line in the first half of this year, and complete the design of square battery cells and PACK production lines within the year to improve Wattma's product line and provide customers with diversified battery matching options. However, with the worsening of the financial crisis and all employees being "given a holiday", Wattma's development in 2018 will face more uncertainties. As competition in the power battery industry intensifies, Wattma may be the first to bear the brunt.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.