SHANGHAI—China’s army of electric-vehicle startups were once positioned to put China at the head of the global EV revolution, but the coronavirus and struggles before the pandemic threaten ruin for dozens of them.

With lucrative state subsidies set to end soon and private capital drying up, hard-pressed startups are now chasing funding to keep afloat.

“We do need to get investment very quickly,” said Huang Ximing, a former Ford Motor Co. and General Motors Co. employee who founded Bordrin Motors, an EV startup based in the city of Nanjing. Mr. Huang had lined up meetings with potential investors—most importantly with the government of Tianjin, a port city near Beijing—early this year as he sought a financial lifeline.

“But the virus disrupted that,” he said. “We hoped to close deals in February, but nobody could work.”

It has been a sharp reversal of fortunes for Chinese EV companies. Flush with subsidies and private capital, the startups had once looked unstoppable. By early 2019, the country had 635 of them, according to the government-backed NEV State Monitoring Center, some promising to reinvent the automobile just as Apple Inc. transformed the cellphone.


But there is little to show for all the hype. Most of China’s EV startups have yet to make a single production car, and the few that have aren’t selling nearly enough to survive. China’s EV subsidies previously filled the gap left by meager sales, but those are now due to end this year, while most private investors have grown disillusioned.

Market conditions have also conspired against them. EV startups had been banking on a fast ramp-up in 2020 sales to generate some much-needed cash flow. But after EV sales in China declined 4% to 1.21 million vehicles last year as an unprecedented downturn gripped the auto sector, the coronavirus, hitting consumer confidence, has further crushed demand. Auto sales could fall 25% year-over-year in the first half of 2020, the China Association of Automobile Manufacturers estimates—although on Thursday the Ministry of Commerce said it was planning stimulus measures for the sector, including EV promotions.

Dozens of new electric-vehicle models are expected to arrive at dealerships in the next few years. We followed eight Wall Street Journal reporters in four countries to see if they, and the world, are ready to make the switch.

While local startups have struggled to make an impression, Tesla Inc. and several established auto makers, notably BYD Co. , have been ramping up their EV sales, suggesting the startups may have missed their chance.

“Call it game over for most EV startups in China,” said Michael Dunne, chief executive of consulting firm ZoZoGo. “Without fresh funding most will simply grind to a halt.”


NIO Inc., China’s best-known EV startup, sold 20,565 cars last year—more than any of its startup peers—but lost $1.6 billion in the process, with a negative 9.9% margin on each vehicle sold.

NIO has cut costs and slashed head count. It has a 5,000-order backlog and should start delivering positive margins in the second quarter, the company said in response to questions.

NIO and other startups—once champions of Chinese private-sector innovation—are now turning to the one entity that is still prepared to bankroll many EV companies: the Chinese state.

In February, NIO announced a preliminary agreement with the government of Hefei, a city 300 miles west of Shanghai. Hefei would provide funding in return for NIO moving its headquarters there and deepening its relationships with local companies, chiefly JAC Motors, a state-owned auto maker that already assembles NIO’s cars.


Local governments in China have a history of making risky bets on EV companies, seeing them as a means to modernize fusty local car makers and support the economy through jobs and taxes, “even if it means financial losses,” said Mr. Dunne.

Mr. Huang’s Bordrin is beating a similar path to the government’s door.

The company has already burned through roughly $300 million developing EVs at research-and-development centers in Nanjing and Oak Park, Mich.

While some Chinese EV startups were founded by people with little car-making know-how, Bordrin, staffed by experienced auto professionals, has built a high-quality EV from the ground up, said Mr. Huang, who started the company in 2016. That quality will win over customers, even though Bordrin’s brand is little-known, he said.


Bordrin’s first car, a $28,000 electric crossover resembling Tesla’s Model Y is also relatively affordable compared with Tesla’s locally built Model 3, which starts at around $42,300.

That will all count for nothing, though, without a big cash injection to fund mass production. Numerous startups have faltered at this capital-intensive stage, developing a nice-looking EV that never gets built. While formal bankruptcies are rare in China’s auto sector, the country is already home to many zombie EV companies that have effectively failed.

Bordrin needs to sell between 50,000 and 100,000 cars a year to start making a profit, but with the coronavirus complicating his plans, Mr. Huang said manufacturing won’t start until late 2020 at the earliest.

That timetable now hinges on the success of the talks under way with the government of Tianjin.

Money is already tight: Mr. Huang said payments to some staff and suppliers have been delayed. The company’s EV development hasn’t been affected, he said, but mass production demands a massive funding boost.

To help persuade Tianjin officials, Mr. Huang last year formed a joint venture with Tianjin FAW Xiali Automobile Co., a struggling local auto maker. Building Bordrin’s EVs there would potentially safeguard about 1,000 jobs and stoke the local economy—provided Tianjin foots the bill.

“That all depends on financing,” he said.

—Raffaele Huang contributed to this article.

Write to Trefor Moss at Trefor.Moss@wsj.com