Forgot the password to your Mac? Need to perform a full wipe/reset? Here are the full steps to erase and reset your M1 Mac to factory settings.

  1. Start by shutting down your Mac (if it is currently powered on).
  2. Power on your Mac by holding the power button down, and continue holding the power button until the "Startup Options" prompt appears.
  3. Click the "Options" icon after the startup options finish loading.
  4. On the next screen, click the menu and select "Terminal."
  5. On the terminal, enter "resetpassword" (without quotes), then press Enter.
  6. A "Reset Password" window should then appear. Click outside the terminal window until the menu bar shows "Recovery Assistant" (not "Recovery Utility"). Click the "Recovery Assistance" menu and select "Erase Mac." If prompted to confirm erasing, click yes.
  7. Once your Mac has been erased, exit back to the recovery tools.
  8. Select the option to reinstall Mac OS. (Note: this will take some time to complete, so you may wish to charge your Mac while performing the reinstall.)
  9. Once the reinstall has completed, you can add new accounts to your Mac without issue.


Sources:
1. https://wccftech.com/how-to/fix-macos-stuck-at-create-a-computer-account-on-m1-mac-tutorial/amp/
2. https://apple.stackexchange.com/questions/408876/m1-mac-clean-install-getting-stuck-at-create-a-computer-account