‘Rock bottom’ Nissan looking to invest in a Chinese electric car startup — but which one?

A reeling Nissan is looking to expand its footprint in China’s electric vehicle market by investing in one of the country’s electric startups.

Bloomberg reports that Nissan has “narrowed the potential targets” to a number of startups, including WM Motor, the Zhejiang Hozon New Energy Automobile Co., and CHJ Automotive. Nissan is reportedly interested in buying a stake of up to 25%.

Despite the worldwide success of Nissan’s Leaf, the Japanese carmaker apparently sees a need to invest in a local company to better connect with the Chinese market. Nissan is ready to act quickly, “before potential acquisition targets become too big and expensive,” a source told Bloomberg. The report also notes:

The company is shying away from players whose cars may clash with Nissan’s own offerings in the EV space. The carmaker considers Chinese startups to be more agile than established manufacturers, making them better suited to potentially disrupt the industry, they said.

Nissan launched its own Leaf-based electric car just for the China market last year, the Sylphy Zero Emission.

‘Rock Bottom’

This news comes as Nissan prepares to announce its weakest earnings in 11 years, with a forecasted 28% decrease in annual operating profit.

As Reuters reports, Nissan CEO Hiroto Saikawa said at a Tuesday press conference, “Today we have hit rock bottom.”

Saikawa also said “most of the problems we are facing are the negative legacy of our old leader,” in reference to former CEO Carlos Ghosn, who was arrested last November and ousted from the company for alleged financial misconduct. Ghosn, who has denied all charges, is awaiting trial in Japan.

There are talks of Nissan further strengthening its alliance with Renault, which Ghosn headed. Renault may even discuss “forming a joint holding company to give both companies equal footing,” sources told Reuters, but Saikawa dismissed the idea of a full merger with Renault.

The Startups

All three of the electric startups in which Nissan is reportedly interested have either already released a production vehicle or are in the process of doing so.

WM Motor is the maker of the Weltmeister brand. It launched its Weltmeister EX5 SUV last year, and it plans to release more EVs in the coming years. The startup has raised billions over the past few years, with its most recent round of funding led by Baidu, often called “the Google of China.” WM and Baidu are collaborating on an autonomous driving center. The company is run by Freeman Shen, a former Geely executive.

The Zhejiang Hozon New Energy Automobile Co. is the company behind the Hozon Auto brand. Hozon Auto opened an autonomous R&D center in Silicon Valley last year. The startup also launched a crossover SUV last year, the Neta N01, with plans for more vehicles to follow.

CHJ Automotive started taking pre-orders for its Leading Ideal ONE EV last month. The vehicle is, unsurprisingly, also an SUV.