Recently, Weilai Automobile Li Bin said in an interview with the media: "The capital threshold that needs to be reserved for car manufacturing, a few years ago I said 20 billion, and now there is no 40 billion that may not be able to do it."
Li Bin said, "I think the threshold of the automotive industry is much higher than we thought, and today may not be the same as a few years ago." At this point in time, I think the threshold for investment in research and development, service systems and infrastructure has actually become higher. In Li Bin's view, the high investment in the automotive industry is not only in terms of fixed assets, but more importantly, in the research and development and service system.
For the current statement that 40 billion is needed to build cars, Li Bin explained that 40 billion is not an accurate number, but an intuitive judgment. "It's not that there is no chance [of 40 billion], I would never say such a thing, but the risk will be much higher," he said. 40 billion refers to the capital reserves needed to truly become a competitive, sustainable and risk-resistant enterprise. If you don't have so much money in reserve, you have to take a very big risk.
Li Bin said bluntly, "This is not to scare entrepreneurs, I am also an entrepreneur, we are still losing money today, why lose money?" It's because we want to invest in the future. Without investing, I can make a profit quickly, but what's the point? It is likely that it will fall off a cliff in two years. ”
As we all know, Li Bin once said a sentence widely circulated in the industry: no 20 billion do not build a car. At the 2016 Global New Energy Vehicle Conference, Li Bin bluntly said at the meeting that car manufacturing is a very money-burning thing, so new start-ups want to build cars, at least more than 20 billion yuan of capital preparation, otherwise don't want to do a good job. In addition, it is also necessary to improve the efficiency of the use of funds, that is to say, even if there is a capital reserve of 20 billion yuan, the money still needs to be saved. Because the industrial chain of car manufacturing is very long, any link in the middle does not control the cost, which will lead to high cost of mass production vehicles, so that the product loses market competitiveness.
Nio Was founded in November 2014, in 2016 When Li Bin said "no 20 billion do not build a car", NIO did not have a model on the market, the first product ES8 was listed in December 2017, landed on the New York Stock Exchange in September 2018, and the second model of NIO, ES6, was officially listed in December of the same year. Since then, Weilai as a new force head enterprise began to be concerned by the market, in 2019 Weilai fell into a huge loss, Li Bin was even called "the most miserable person in 2019", netizens once commented "the earliest this year, the slowest next year".
Weilai in 2019 is particularly memorable for Li Bin. In that year, Weilai Automobile's funds were in a hurry, and under the influence of news such as recalls caused by spontaneous combustion of products, layoffs and cost reductions, and executive departures, the stock price of Weilai Automobile plummeted. In October 2019, NIO's share price reached a minimum of $1.19, on the verge of a $1 delisting red line. At that time, in order to alleviate the financial problem, WEILAI actively sought financing, including Beijing Yizhuang State Investment, Zhejiang Huzhou Wuxing District Government and other financing matters, but all of them failed.
Entering 2020, WEILAI still showed a sluggish development state under the influence of the epidemic in the first half of the year, but after receiving financial support from the Anhui Municipal Government, its funding problems were alleviated. After the second half of 2020, under the outlet of new energy vehicles, Weilai, as the earliest new power company to lay out new energy vehicles, once soared in stock. Up to now, NIO's total market capitalization is $48.54 billion, ranking 14th in the global market.
At the beginning of the year, Li Bin lamented in an interview with CCTV that in 2019, Weilai laid off 30% of its employees, and its stock price also fell to a freezing point, and many people thought that Weilai was going to delist. Of course, we all know that the capital market does not talk about feelings, and sometimes we have to thank the capital for not saving, because if we save Weilai at that time, there will definitely be many conditions. Of course, for Weilai at that time, any conditions would be agreed, after all, if Weilai fell, there would be nothing.
From the current point of view, although there is still uncertainty in the development of Weilai's future market, it has gained a foothold. However, the current Weilai is still in a state of loss, and when it will achieve self-hematopoiesis is still unknown. According to NIO's third-quarter financial report, NIO's total revenue in the third quarter was RMB9,805.3 million, an increase of 116.6% year-on-year; net loss was RMB835.3 million, narrowing by 20.2% compared with the same period last year and 42.3% wider than the previous quarter; and net loss attributable to the company's common shareholders was RMB2,858.9 million, an increase of 140.7% compared with the same period last year.
However, in 2019, Li Bin also publicly stated that Weilai's profit may take ten years, Weilai is still only a four-year-old child, do not think about four-year-old children to make milk powder money. In an interview with the media, Li Bin also said that the current Weilai is the Tesla of four years ago. At the time, Tesla sold 100,000 cars worldwide and lost $2.2 billion.
How to evaluate "no 40 billion do not build a car"? The automotive industry is concerned that according to the current market competitive trend, although 40 billion is not an accurate number, the threshold for car manufacturing is indeed constantly improving, stemming from the improvement of consumer consumption concepts, and more attention is paid to product quality, brand image, sales and services. In March this year, Xiaomi officially announced that it had officially entered the market to build cars, with an initial investment of 10 billion yuan and an estimated investment of 10 billion US dollars in the next 10 years. Not long ago, Volkswagen announced a new plan for electrification transformation, which will invest 89 billion euros (about $101 billion) over the next five years. On December 14, Toyota President Akio Toyoda said that it plans to invest $35 billion in electric vehicles, and it is expected that Toyota will launch 30 pure electric vehicles worldwide by 2030, with the ultimate goal of selling 3.5 million units worldwide by 2030.
All indications show that the layout of new energy requires a lot of financial support, product research and development, infrastructure construction, store laying, production qualifications and other matters need funds. Of course, a lot of money is not guaranteed to be successful. Evergrande Automobile, which has been laying out new energy since 2017, has accumulated losses of more than 15 billion yuan as of the first half of the year, but Hengchi new cars have not yet been mass-produced off the production line, and the future is slim. However, as Li Bin said, more funds means that the risk is lower, after all, if you have money, you can do more things, and if you don't have money, you can only delist.