(Yicai) Nov. 27 -- A source at Zongmu Technology confirmed to Yicai today that the Chinese autonomous driving startup has adjusted staff salaries while normal payments are expected to resume by year-end after a new round of funding.

Contrary to social media reports, the source at the Shanghai-based company said it has not fully suspended staff payments.

The reports said the producer of FlashBot, an unmanned vehicle designed for charging electric cars, recently held an all-staff meeting to announce that due to the business’ underperformance salaries would be halted from this month, with only basic living expenses paid.

Zongmu is operating normally, the person said, and expects to secure new financing before year-end to meet its significant capital needs resulting from a big recent expansion. Salary payments will be restored to normal once the funding is received, but until then the firm will prioritize the funds it has for production and the delivery of strategic projects, the source added.

Founded in 2013, Zongmu has completed 10 rounds of financing so far, including investments from the Yangtze River Xiaomi Industry Fund, backed by Xiaomi Chief Executive Lei Jun. Over the past three years, Zongmu has lost nearly CNY1.6 billion (USD220.6 million).

Zongmu has suspended performance and year-end bonuses since 2023 as a result of the challenging industry environment and missed business targets, the insider said.

Funding for self-driving tech firms has dwindled in the last two years, following relatively abundant years in 2020 and 2021, Paul Gong, head of auto research at UBS Group in China, told Yicai. Despite this, there has been no technological backsliding in terms of development or widespread adoption, he pointed out.

Zongmu is not the only company in the industry facing challenges. On Nov. 22, Great Wall Motor-backed Haomo.AI confirmed job losses, describing them as “normal organizational structure adjustments.”

Editor: Emmi Laine