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Text/Director Dong
Source/Yuanchuan Technology Review (ID: kechuangych)
The highlights of new energy vehicles in the past two years have gradually dimmed, and it seems that the chill is passing on to every car person.
tesla
Tesla, which has become the ceiling of the industry and continues to break through the ceiling, has fallen 55% from its highest point. Like all U.S. stock technology companies, the rise and fall of stock prices are inseparable from the Fed’s release of water, shrinking balance sheets, and raising interest rates. In addition to monetary policy factors, there are also Tesla’s own reasons.
Deliveries fell quarter-on-quarter for the first time since 2020. In July, Tesla’s second-quarter production report showed that 258,000 vehicles were produced globally, a year-on-year increase of 25%, but a month-on-month decrease of 15%; 254,000 vehicles were delivered, a year-on-year increase of 26.5%, and a month-on-month decrease of 18%.
Although some analysts in the market lowered the delivery volume from the previously expected high of 310,000 to 270,000 before the release of the quarterly report, unfortunately, it still missed and fell short of expectations. So much so that analysts couldn’t say the phrase “as we expected” to the road show.
It is quite helpless to fall short of expectations. Look at supply and demand:
On the supply side, new factories have to climb. As Musk said in an interview in June, “The factories in Berlin and Austin are now huge money melting pots. They make a huge roar, which is the sound of money burning.” At the same time, The outbreak has also created instability in supply chains.
In terms of demand, there are rumors that the Shanghai factory will reduce production due to lower demand than expected, but the company quickly dismissed the rumor as untrue. However, the withdrawal of new energy vehicle subsidies has really happened. Some risks brought by the single-pedal mode are also being re-evaluated by some consumers. But Tesla’s brand is still appealing. Especially after Musk became the big boss of Twitter, the world’s largest social platform.
Musk’s eloquence on Twitter has expanded the radiation circle of personal charm, but it is also worrying Tesla’s investors:
Tesla shares are sold, Twitter is changed internally, is the energy of time management masters really enough?
Electric car Tesla Tesla, social platform Twitter, brain-computer interface Neuralink, Starlink Starlink, humanoid robot Optimus, solar SolarCity, space SpaceX, tunnel Boring Company, grocery store (mobile phone, Dogecoin, flame gun), etc.
Once the “Nine Sons Seize the Inheritance” comes out, history also tells us that such a situation will lead to chaos. Especially for this new energy vehicle, its own war is not over yet. The train runs fast, thanks to the headband. If the business needs to develop, Musk needs to be loved.
But if you think Tesla is miserable, that’s not it.
New forces
There is Tesla in the United States, and new forces in China. Ideal, Weilai, and Xiaopeng, as representatives of new forces, have “enjoyed” with Tesla in the US stock market. But now they are also suffering together.
The stock prices of the three major companies are the most significant feedback. Although the stock price of Xpeng Motors has almost doubled recently, it is still only 20% of the highest point. Weilai is also almost 20% of the highest point, and ideal because of the small increase before, so the retracement is also small, which is 50% of the highest point.
The biggest pressure facing new forces is still sales, gross profit margins, and losses.
Xiaopeng is adjusting. A 36Kr report stated that Xiaopeng Motors held several management meetings around October to reflect on issues such as company operations and product strategies. There are even rumors that the founder He Xiaopeng once choked up at the internal meeting[1]. The trigger point is related to G9. Factors such as configuration are not as good as consumers expected, causing dissatisfaction. Mistakes in product strength are very serious for the single-product explosion strategy.
The delivery volume in August and September still did not exceed 10,000, and there was a month-on-month decline. In October, sales decreased by another 40% month-on-month. 2022 is coming to an end, but it is almost unrealistic to complete the sales KPI.
If sales are not enough, it will be difficult to achieve profitability. In addition, the valuation of autonomous driving has shrunk and the premium of product power is weak. The obsession with the research and development of autonomous driving has also increased the pressure on Xiaopeng Motors. Xiaopeng loses 68,000 yuan for every car sold, and Xiaopeng has a net loss of 6.7 billion yuan in the first three quarters of 2022.
This number can make Ideal Auto lose ten times in the second quarter.
In the second quarter of 2022, Ideal has a net loss of 640 million yuan, which is not much, and the gross profit rate is also around 22%, which is relatively good among new forces. Therefore, Li Xiang, the founder of Ideal, also said on Weibo that the moment when the two products of L9 and L8 are delivered at the same time is also the time to say goodbye to seven consecutive years of loss-making operations.
With the rhetoric of “the best SUV within five million yuan”, the goal of ending the loss seems to be quite reasonable. To get rid of losses, in addition to controlling costs, the current sales volume of 10,000 may have to be doubled to be more secure. However, considering factors such as the sharp drop in sales in August and the turmoil caused by ONE, product strength is still a test in order to make a profit.
For profitability, Weilai also proposed a goal.
Weilai, which takes a high-end route and values user service, has sold more cars, but its losses have also increased in a single quarter. In the third quarter of this year, it lost 4.1 billion yuan in one quarter. In response to various pressures, Li Bin, the founder of Weilai, said in an internal speech of “not forgetting the original intention and forging ahead”, “I have no right to wait and see, let alone shrink.” Adhere to research and development, and insist on entering more national markets.
Weilai also said that it plans to make batteries and chips by itself, hoping to achieve profitability in 2024. Indeed, with the price of lithium mines at a high level, automakers complained that money was taken away by batteries, and battery owners complained that money was taken away by mine owners. In that case, do it yourself. And BYD, which insists on integration, has also made a profit of 10,000 yuan from bicycles, which proves this point.
To be honest, it took Tesla more than 16 years to achieve profitability. From the perspective of time, new forces don’t have to care. However, in the case of too fierce competition, continuous losses may not be a good signal, and may even fall behind.
For Weilai, who has experienced the “desperate situation” in 2018, he is particularly concerned about whether he is left behind. In his internal speech, Li Bin also repeatedly mentioned, “(The gross profit is less than 25%), if you don’t reach it, you have no chance.” 2024 and 2025 are the final stages of electric vehicles. If you reach the second square, you still want to catch up The first phalanx is basically impossible. [2] The urgency is beyond words.
But if you think that the new forces are miserable, that’s not true.
second square
What is the standard of the second phalanx and what companies are there? Maybe everyone has a different opinion. As the saying goes, as long as the field is subdivided enough and the angle is novel enough, every company can become the first.
But if “whether you have enjoyed the brightest moment in the stock market in 2020” is used as the standard, Leap Motors must be in the second phalanx.
It is not too late for Leap Motors to be established. At the end of 2015, the new forces can basically be regarded as front and back. But the market momentum is relatively small.
Zero-run sales are okay. The trial-and-error model S01 has been tossing for about four years, and then the T03 for A00-class sedans has been recognized by the market. The price is about 80,000 yuan, which has indeed grabbed a lot of markets. The C series is also remarkable. The price strategy allows Zero Pao to harvest 100,000 sales in the first 11 months of 2022.
The company’s product promotion is “the expectation of the 500,000 level can be realized with less than 200,000”, which is the same as the original intention of the 5 million SUV, and it is very good. Consumers are very useful, but the company’s shareholders are under great pressure. At this price, the gross profit margin of the product is not optimistic. It will be -44% in 2021, and it will still be around -9% this year.
The gross profit margin puts a lot of pressure on the zero run of the listing. Leapmotor has 9 rounds of financing, the largest of which is 2.5 billion yuan, which is not too big compared with Wei Xiaoli. On September 29, 2022, Leap Motors was finally listed on the Hong Kong Stock Exchange, and it fell by 35% on the day of listing. Nine trading days later, the share price was cut in half.
Regarding the listing time, Zhu Jiangming, the founder of the company, said frankly, “It is indeed not a good time period, and it is in a downward channel. But the main reason we choose to go public is that we don’t care about the current time period, and we care more about getting our market share as soon as possible” [ 3].
In the vernacular, to compete, you need money, and you must go public as soon as possible. After all, investors dare to invest in assets that banks and trusts dare not take over.
Leap Motors’ words are very sincere. Although it broke after listing, the situation is still better than that of Weimar, which can’t make it.
WM Motor, which was also established in 2015, was second only to Weilai in sales in 2019, and its continuous financing is about 30 billion yuan. With money and products, it should be a one-yuan general among new forces. So much so that the founder Shen Hui once made a bet to Wang Xing from a distance, if Weimar advances to the top three of the new forces, he hoped that Wang Xing would personally deliver a takeaway to his door. The high spirits can be seen.
In the subsequent development, whether the factory investment is too high, whether the intelligence cannot keep up with the pace, and the litigation disputes with Geely, etc., in short, what is presented is that in the first three quarters of this year, Weimar sold only 30,000 vehicles . Cash flow is also already tight.
In 2020, Weimar failed to plan to go public on the Science and Technology Innovation Board. In December 2022, there were rumors that Weimar used the “Apollo Travel” to achieve Hong Kong stock listing. The company declined to comment. But for the development of Weimar, going public is really important. In other words, money really matters.
When the times abandon you, you won’t say hello. And when the second phalanx wants to abandon you, it doesn’t consider whether it has a “golden spoon” in its mouth at that time.
But if you think that the second phalanx is miserable, that’s not true.
crowd the table
There are too many players who hope to squeeze into the poker table.
There are successful ones, such as Nezha Automobile, relying on B-end online car-hailing and G-end, and sold 144,000 vehicles in the first 11 months of 2022, ranking second in domestic sales.
It is also difficult to even think about building a car, not to mention it is on the market and sold. For example, Li Yinan’s self-travel home. Li Yinan’s Maverick Electric has achieved a lot in the field of two-wheeled electric vehicles. Therefore, the genius boy also set his sights on Silun and established Niu Chuang Company (Martian Stone Technology). In October 2022, the Ziyoujia NV model was released, and the 20,000 intent gold order also caused considerable repercussions in the car circle.
Ziyoujia’s foundry factory is the Changzhou factory of Dacheng Automobile, and the factory of Dacheng Automobile is the “family property” of Zotye Automobile. Reminiscent of Zotye’s previous high imitation models and the fact that the listed company has just taken off its cap from ST, some people say that this is a “Zhaizhongzhai”, and quality control needs to be extra cautious.
As a result, in less than two months, let alone quality control, it is now a problem to even produce it.
The problem is stuck in the production qualification. my country needs qualification approval for automobile production. New players can obtain production licenses by acquiring qualified companies. For example, Ideal Automobile spent 650 million yuan to acquire Lifan Motors’ production qualifications; it can also be made by qualified factories, but the latter needs to be in The rear of the car clearly defines the foundry, just like Weilai’s JAC logo.
However, the qualification review standards for OEM production will also change in early 2022. The Ministry of Industry and Information Technology issued the “Notice on Carrying out the Pilot Work of New Energy Automobile Commissioned Production”. Among them, the entrusted enterprises are more stringent than the previous regulations, and also require new energy-related production qualifications. In other words, new players can no longer adopt the cooperation model of NIO and JAC.
The original intention of the notice is to reduce waste of production capacity and urge enterprises to plan rationally, and also proposes ideas for mergers and reorganizations. The release of the notice is also before the release of Ziyoujia, and it is not a sudden attack. But it does bring stricter standards to the foundry, such as borrowing the form of a vest, which is not allowed in essence. This requires Li Yinan to think more long-term and firmer about the cooperation with Dacheng Automobile.
Taking into account Mahayana’s own debt problems, when quality control, qualifications, branding, etc. are intertwined, it is indeed easy to “cut the mess quickly and pull it down without cooperation”, and fall at the door of mass production. There are also rumors and rumors of Ziyoujia’s “closure”. The issue of qualifications has also led to rumors that Xiaomi was instructed to build cars.
When it comes to falling at the gate of mass production, we have to mention Evergrande Automobile. It is difficult to cross borders in itself, not to mention the difficulties in the real estate business.
But just like Wang’s richest man in 2017, the passive Waterloo at that time, in hindsight, became an act of knowing. The decisive stop loss now may also be a good choice.
After all, if 2024 and 2025 are the final stage, companies without brand and appeal are just starting now, and the money and time invested are just a prince to accompany them.
Not to mention, in addition to the new forces and the second phalanx, BYD is a popular brand that has been rolling for more than 20 years, leading in sales volume and gross profit margin, and has been favored by Buffett. There are also companies such as Apple, Huawei, and Xiaomi, which have proven their brand power, are also facing the end.
But if you think that the squeeze on the poker table is miserable, that’s not the case.
darkest hour
Everyone came to squeeze the poker table, no doubt they saw room for development in the industry.
From 2020, in three years, the penetration rate of new energy vehicles will be close to 30%, more than two years earlier than planned. In the market of less than 100,000 to 200,000 yuan, the penetration rate of new energy vehicles is 19%. This is the room for future industry growth. And, there are also intelligent imaginary scenes.
Although the stage of savage growth has passed, each player has his own chills: Tesla needs more love from Musk to maintain its leadership; new forces need product strength and sales to achieve profitability; the second phalanx needs to get money quickly , Guaranteed not to fall behind.
But from the perspective of development space, new energy vehicles are still much better than many industries and fields, and there are many bright spots. For example, Xiaopeng’s G10 has filled the market with anticipation; the gross profit margin of Zero Run is also improving; Weilai is expanding the European market; lithium mines are also reducing prices, and the gross profit margin will improve.
However, on the other hand, in the face of fierce competition, some people will definitely fall behind. The founders and entrepreneurs of electric vehicles really need to be less ambitious, less conceited, more prudent, and try their best to balance the needs of multiple parties:
Investors need stock prices to soar and be rewarded, the government needs industrial development to have momentum, consumers need high-quality and low-cost products, employees need companies to be stable and have a bright future, and companies need money and profits to continue to grow.
If the wind is gone, those without wings will fall; if the tide recedes, those who swim naked will be ashamed; when winter comes, those with thin clothes will be cold. It’s not realistic for everyone to win at the poker table.
The phrase “darkest hour” has been heard a lot this year. Many people use it to describe the environment, but it is not complete. In fact, it is more to describe the inner.
Just like Churchill in the movie “Darkest Hour”, although the Nazis attacked fiercely and oppressively, but the king’s distrust, the people’s lack of confidence and preparation, and even his own wavering, this is the darkest moment, and it is Churchill who needs courage to cheer up of.
Therefore, maintaining confidence, patience, original intention, and determination are still what Autobots need. This is true in the automotive industry, and it is true in many industries. There are many such moments in the light and shadow of history, followed by dawn, morning light, and rising sun.
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