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Password error while resetting M1 Mac

I tried freshly setting up my M1 Mac by wiping the SSD through Disk Utility in recovery mode and then doing a clean install. If I try to create a user in the setup dialog after the installation is complete, I always get the error message “Creation of computer user failed”. After a restart, all tentatively created users are even listed; every time I try to log in, I get the error message that the password is wrong – but I’m sure I’m entering it correctly.

With the M1 Mac, deleting and reinstalling macOS is not enough; You have to reset it. Shut down the Mac and on the next startup hold down the power button until the startup chooser appears, from which you select Options. Open a Terminal window from the Utilities menu and type the command resetpassword a. When the “Reset Password” window opens, click on it, open the “Recovery Assistant/Erase Mac…” menu and follow the rest of the instructions, which will guide you through a clean installation of macOS. The next time the setup dialog runs you should be able to create the user.

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