Analysts say China is leading the world when it comes to electric vehicle development, but the sheer number of brands and sluggish consumer spending make it tough for local companies.
WM Motor was seen as one of the firms more likely to succeed, with primary backing from internet giant Baidu and additional support from tech titan Tencent.
But in a statement posted Tuesday on social media, it said that in recent years it had "entered a difficult operating environment".
It cited the Covid-19 pandemic, capital market downturn, the price of raw materials and a general shortage of funds as reasons for the bankruptcy filing.
"WM Motor's pre-restructuring will bring in strategic investors from around the world," the statement said.
"We will be reborn and embark on the road of development once again in a healthier and stronger position."
The firm previously sought to achieve a backdoor listing on the Hong Kong stock exchange via a reverse takeover by Baidu's Apollo, but the deal fell through last month.
There are around 100 brands selling EVs in China, according to Counterpoint Research.
Of these, BYD is the biggest domestic player, hoovering up market share and driving down prices.
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