As soon as we step into 2022, the three new car-making forces of Weilai, Xiaopeng and Ideal can't wait to show their report cards for the past year. For the three new car-making forces of "Wei Xiaoli", the past year may not be perfect - the problem of chip shortage and tight supply chain is still not solved; but the single-month delivery volume collectively exceeds 10,000, and the annual delivery volume hits the 100,000 mark, which is still enough to make them happy.
Objectively speaking, compared with 2020, the progress of the new car-making forces in the past year is quite obvious. According to the statistics of Autohome, there are only 10 new car-making forces with real output in 2020, including Weilai, Ideal, Xiaopeng, Weima, Nezha, Zero Run, Guo jizhijun, Aiways, Yundu and Xinte, and the annual delivery of the best Weilai Automobile is only 43,728 vehicles, and the ideal and Xiaopeng are hovering at the level of 20,000+.
After shouldering the difficulties of mass production and continuing to expand production capacity, "Wei Xiaoli" entered the blindfolded running mode. However, with the intensification of competition between each other, coupled with the continuous evolution of the market pattern, user demand, and complex supply chain conditions, the development of "Wei Xiaoli" in 2022 will not be smooth.
In the context of the increasingly thickened outlet of new energy vehicles, a more fierce market battle has begun.
(Image courtesy of Pixabay)
All-round PK, "Wei Xiaoli" who leads the way?
The Institute of Value mentioned in its previous report that the new forces of car-making have formed an obvious three-tier pattern: "Wei Xiaoli" occupies the first echelon, and the annual delivery volume has the strength to impact the 100,000-vehicle mark; Nezha, Zero Run, Weima, etc. are the second echelon, and the annual delivery volume is about 40,000-60,000; the members of the third echelon such as Aiways, the monthly delivery volume is still hovering in the hundreds, and the first two camps have opened a big gap.
In the head camp, the competition between "Wei Xiaoli" has entered a white-hot stage: in addition to delivery, the all-round PK around the revenue, loss, stock price and market value of the three giants is the most concerned topic in the industry.
Judging from the most critical delivery data, the seat of "Wei Xiaoli" readjustment in 2021: the original big brother Wei Lai fell off the throne, XiaoPeng climbed to the top strongly, and the lead was quite obvious.
According to the data, Xiaopeng delivered a total of 98,155 vehicles in 2021, an increase of a staggering 263% year-on-year. In contrast, the former boss Wei's annual delivery volume was 91429 vehicles, an increase of 109.1% year-on-year, and both data lagged behind Xiaopeng significantly.
Although the annual delivery volume of 90491 vehicles of the ideal car is slightly lower than that of Weilai, it is obviously more powerful after entering the second half of the year: in the last three months of 2021, the ideal delivery volume was 7649 vehicles, 13485 vehicles and 14087 vehicles, respectively, and the delivery volume of Weilai in the same period was 3667 vehicles, 10878 vehicles and 10489 vehicles, which was not only overtaken by the former, but also grew more slowly.
As for the new forces behind "Wei Xiaoli", there is still a big gap between the delivery volume and the three giants, and there is no comparative significance at present: Nezha Automobile, Zero Run Automobile and WM Automobile recorded 69,674 vehicles, 43,121 vehicles and 44,157 vehicles in 2021, respectively, and the fastest growing Nezha increased by 361.1% year-on-year, but the growth rate of WM was less than 100%, which was still not as good as Weilai, which was deeply involved in the supply chain crisis.
In the view of the Value Research Institute, for a long time to come, the peak duel of the new forces of car manufacturing will still unfold between "Wei Xiaoli", and second-tier brands will continue to work hard to catch up with the pace of the three giants.
However, unlike the downturn in delivery, if you look at the data closer to the capital market such as revenue, profit, and market value, Weilai's leading position in the big three has not yet been replaced.
According to the data, WEILAI's revenue in the first three quarters of 2021 was 7.982 billion, 8.448 billion and 9.805 billion, an increase of 481.8%, 127.2% and 116.6% respectively year-on-year, and the gross profit margin of vehicle sales in the latest quarter was also maintained at a good level of 18.6%. In terms of horizontal comparison, Xiaopeng's revenue in the first three quarters of fiscal 2021 recorded 2.951 billion, 3.761 billion and 5.72 billion, respectively, and the ideal was 3.58 billion, 5.04 billion and 7.78 billion, respectively, which is a certain gap compared with Weilai.
In terms of market capitalization, as of Wednesday's close, NIO's market value was about $47.526 billion, and the recent stock price hovered between $19-30. Ideal and Xiaopeng have market capitalizations of $30.1 billion and $39.5 billion, respectively, but both are far more stock-priced than WEILAI.
On the whole, looking back at the 2021 report card of "Wei Xiaoli", the fourth quarter is the turning point where Weilai fell to dig the throne and Xiaopeng suddenly emerged. Among them, there is not only the supply chain crisis caused by the chip shortage, but also the strategic victory of Xiaopeng to seize market share by taking the affordable and low-price route.
Of course, in the area of profit/loss, "Wei Xiaoli" can be regarded as a difficult brother, and no one should laugh at anyone.
Xiaopeng Motors, which ranked first in deliveries, had a net loss of 1.59 billion yuan in the third quarter of last year, further enlarged from 1.15 billion yuan in the same period in 2020 and also exceeded market expectations of 1.177 billion. The situation of NIO is also not optimistic, with a net loss of 835 million yuan in the third quarter, although it narrowed compared with the same period in 2020, but it expanded by 42.3% month-on-month. The ideal of cost control among the three giants has not been able to get rid of the quagmire of losses, recording an operating loss of 98 million yuan in the third quarter, with a net loss of 22 million.
In the view of the Value Research Institute, the reason why WEIlai can still maintain its leading position in revenue and market value is related to its first-mover advantage in the market and a higher user base. However, since entering the fourth quarter, Weilai's stock price has been turbulent, and its advantages in the capital market have been greatly reduced - in other words, relying solely on eating old capital cannot maintain Weilai's leading position in the capital market.
As far as the current development situation is concerned, Xiaopeng and his ideal potential are greater and their staying power is more sufficient. In the face of an increasingly complex competitive situation in the coming year, the big three need to check and fill in the gaps and make up for their shortcomings as soon as possible.
(Picture from WEILAI's official website)
"Wei Xiaoli" has its own fate
As we all know, car manufacturing is a very challenging industry: supply chain management, technology research and development, and the construction of downstream distribution networks all require a lot of manpower and material resources and massive investment. The new car-making forces, which have been established for less than 10 years, naturally cannot do everything in all aspects, and their own shortcomings are still obvious.
Among them, there are some common flaws, such as the aforementioned losses. A closer look at Wei Xiaoli's financial report shows that the inability to get rid of losses is mainly due to the imbalance in cost control – especially marketing and research and development expenditures.
The data shows that the loss situation is slightly better, the third quarter of the R & D expenditure is also as high as 888 million, year-on-year, month-on-month growth of 165.6% and 36%, the increase in R & D personnel and a series of technical tests for new models, all need to spend a lot of money. Weilai and Xiaopeng also had a similar experience, with R&D expenditure reaching 1.193 billion yuan and 1.264 billion yuan respectively in the third quarter of last year, an increase of 101.9% and 99% year-on-year.
But in addition, "Wei Xiaoli" also has its own deeper worries, as well as unique troubles. The Value Institute believes that the ability to solve these troubles will be the key to determining their success or failure in the coming year.
(Image from UNsplash)
The death of Weilai's supply chain
First of all, Weilai, which was clearly left behind in the fourth quarter of last year, is undoubtedly its most vulnerable supply chain.
Li Bin, who was praised by many media as "China's Musk" in the early years, estimated that he could not imagine that Weilai had led the new car-making forces for many years and would be mixed up by the supply chain at this critical moment in 2021.
In August last year, NIO announced that it would lower its delivery forecast for the third quarter from 23,000-25,000 units to 22,500-23,500 units. At that time, Weilai's delivery volume had been surpassed by Ideal and Xiaopeng one after another, and it had been reduced from a leader to a latecomer. But Li Bin may not have expected that weilai's supply chain crisis lasted longer than expected and brought greater impact.
In the supply chain crisis encountered by Weilai, the lack of core is still the most serious problem. According to foreign media statistics, due to the impact of the epidemic and other factors, the global supply of automotive chips has become very tight since the end of 2020, and the average delivery cycle has been extended from the previous 13 weeks to 22.3 weeks. AFS data shows that as of December last year, the global auto industry lost 10.23 million units due to lack of cores, and Chinese manufacturers cut production by 1.982 million units.
In order to solve the problem that the supply chain is not stable enough, Weilai actually has targeted deployment as early as 2020: including focusing on the research and development of "three electricity" technology through self-research means, breaking through the "one-to-one" model of OEMs and cooperative manufacturers, expanding the scale of partners, and so on. Unfortunately, the menacing chip shortage and repeated epidemics have disrupted the pace of Weilai's reform to some extent.
The Value Institute believes that since it has realized its own problems, Weilai's supply chain transformation is still worth looking forward to. What needs to be done next may be to add a few more layers of security to yourself on the basis of the original - such as improving the upstream bargaining power by increasing the supply of direct procurement, and expanding the supply circle.
At present, NIO purchases more than 70% of the production materials around the 600 km diameter area of the Hefei plant, which has the advantage of increasing supplier concentration, facilitating management, and reducing transportation costs. However, in the context of the epidemic, overly concentrated production planning also faces higher risks. Taking precautions for this problem is the next issue that Weilai needs to consider.
Xiaopeng stumbled on the high-end market
Of course, Xiaopeng, which has achieved a big outbreak at the end of the year, is not invulnerable - competing for the mid-to-high-end market is a difficult task.
According to the report released by Pacific Auto Network, the purchase budget of existing new energy vehicle users is mainly concentrated in the range of 100,000-300,000 yuan, similar to traditional fuel vehicles. However, among the new car buyers, the purchase budget is higher, and the new models with an average price of more than 300,000 are also loved for ten minutes, and there is a clear trend of consumption upgrading.
This trend is naturally not a good news for Xiaopeng, whose average selling price is at the bottom of the "Wei Xiaoli" three giants.
According to the data, Xiaopeng occupies the main sales force of the models sold is the Xiaopeng P7, whose sales exceeded the WEIO ES8 in April last year, and then surpassed the ideal ONE in September, and has maintained a growth trend until October. But the problem is that the price of Xiaopeng P7 in its early 200,000s is the lowest in the horizontal comparison - the national unified retail price of the ideal ONE 2021 when it is on sale is 338,000, and the subsidized price of Weilai ES8 is between 450,000 and 600,000, which is much higher than that of Xiaopeng P7.
According to the data reviewed by the Value Research Institute, the average selling price of Xiaopeng models on sale is about 210,000, which is at the bottom of the "Wei Xiaoli". The direct result of the low price is to pull down the gross profit margin.
According to the data, the gross profit margins of Ideal and WEIlai in the third quarter of last year were 23.3% and 18%, respectively, and Xiaopeng was only 14%, which was also the last seat. Judging from the data of the past few quarters, Xiaopeng's gross profit margin level has been lower than that of Weilai and Ideal, which has a lot to do with the selling price.
(Image source see watermark)
Nowadays, as new energy vehicle users enter the stage of consumption upgrading, Xiaopeng's disadvantage may be further magnified. In view of this, entering the high-end market by launching new models has become an important task for Xiaopeng: Xiaopeng plans to enter the market of 400,000-500,000 in 2023, and even launched the X2, a fifth-generation aircraft traveler at last year's Shanghai Auto Show, showing its ambition to enter the flying car market.
In order to earn higher gross profits, Xiaopeng will inevitably have to hit the high-end market.
Ideal expansion puzzle
As for the ideal of the most rational operation and the best loss control at this stage, the biggest trouble is in the monotonous product line - relying on the ideal ONE model alone is not the optimal solution after all.
Since entering 2021, the one-model policy seems to be no longer a profitable choice for ideals. On the one hand, the production of product lines with lower requirements under a single model can reduce the investment of ideals in research and development and marketing, which is also an important reason why ideals are far ahead in the cost control competition of the "Wei Xiaoli" three giants.
But on the other hand, the overly monotonous product line also restricts the ideal pace of expansion - in the case of Weilai's continuous sinking and Xiaopeng's onslaught on the high-end market, ideals certainly cannot sit still.
According to the original plan, the ideal will launch a full-size range extender luxury SUV this year, which may also become the ideal last range extender model. In addition, Ideal also plans to launch two pure electric SUVs in 2023 and continue to expand its product line.
However, while expanding the product line, the ideal also has to solve another expansion problem: infrastructure. Since the ideal ONE is a range extender model, the endurance has obvious advantages over the main models of Weilai and Xiaopeng, so the ideal has been quite low-key and Buddhist in the previous infrastructure war. However, after the launch of pure electric SUVs and the gradual expansion of product lines, defects in infrastructure such as substations and supercharging stations must also be filled in time.
Otherwise, the ideal expansion plan may be difficult to carry out.
(Picture from ideal car official website)
Outlook 2022: Five keywords for the new forces of car manufacturing
Although the three giants of "Wei Xiaoli" have their own troubles, many people in the industry still have high hopes for the development of the new energy vehicle market in the next year. Cui Dongshu, secretary general of the Association, predicted in an interview with the media in January that the sales target of new energy vehicles in 2022 should be higher than he had previously expected:
"My original judgment was that the sales of new energy passenger cars in 2022 were expected to be 4.8 million units, and it should be adjusted to more than 5.5 million units at present, and the penetration rate is expected to reach about 25%."
In addition to Cui Dongshu, a number of data agencies have also made optimistic predictions for new energy vehicle sales in 2022. Industry insiders generally believe that with the cultivation of user consumption habits, the improvement of the credibility of new energy vehicles and the gradual improvement of infrastructure, the scale of domestic new energy vehicle production and sales will maintain steady growth and continue to lead the global market.
However, in the view of the Value Research Institute, in addition to strengthening the weak links in its own management and production system, the new car-making forces led by "Wei Xiaoli" must also cope with new challenges brought about by changes in the external objective environment. In order to maintain growth in the new year, "Wei Xiaoli" needs to continue to complete self-correction around at least five key words.
Key word one: subsidy decline
On the last day of 2021, the Ministry of Finance, the Ministry of Industry and Information Technology, the Ministry of Science and Technology and the National Development and Reform Commission jointly issued the "2022 New Energy Vehicle Promotion Subsidy Plan", announcing that in the new year, the subsidy standard for new energy vehicles will be reduced by 30% on the basis of 2021, and the subsidies for vehicles that meet the requirements in the field of urban buses, road passenger transport, taxi (including online car-hailing), sanitation, urban logistics and distribution, postal express, civil aviation airports and party and government organs will be reduced by 20%.
In the view of the Institute of Value, the "weaning" of new energy vehicles is an irreversible trend, and the decline in subsidy policies in the past few years is the most direct evidence. After the subsidy is reduced, the capital strength is not as strong as that of traditional car companies, and the new car-making forces that have not yet solved the problem of loss need to start from two aspects to make up for the losses.
First, do a good job of cost control, reduce marginal costs, and try to control the price increase.
Since the fourth quarter of 2020, "Wei Xiaoli" has achieved a positive gross profit at the same time, and the cost control effect of the three giants has improved significantly. However, there is still a clear gap between traditional car companies such as Geely and BYD, as well as the big brother Tesla. One of Tesla's strengths is to drive down upstream raw material costs by expanding capacity, increasing procurement scale and extending supply chains. This point is definitely worth learning from the "Wei Xiaoli".
Second, help users cultivate their consumer minds as soon as possible, so that they can smoothly transition to a new stage of purchasing new energy vehicles without subsidies.
The good news is that after years of development, the new car-making forces have cultivated a number of loyal users, and the entire new energy vehicle consumer market has gradually transitioned from policy-oriented to quality-oriented. According to the statistics released by the Economic Research Herald, the progress of battery technology and the construction speed of charging facilities have gradually surpassed the government subsidy policy, and have become the main consideration for consumers whether to buy new energy vehicles.
In other words, in order to win the trust of potential consumers, the new forces of car manufacturing in the new year also need to carry out targeted layout around supporting facilities, after-sales service and research and development technology.
Keyword 2: supporting service competition
The Institute of Value mentioned in previous reports that the arms race around infrastructure such as power exchange and charging has quietly begun.
According to the information on the official website, Weilai is the best infrastructure construction among the three giants. According to the official data released on January 1 this year, by the end of 2021, NIO Power has built more than 770 substations and 605 supercharging stations nationwide. In the past year, WEILAI has made every effort to strengthen infrastructure construction, adding 505 new supercharging stations and more than 2,500 supercharged piles throughout the year, of which 160 high-speed substations have also been connected to more third-party charging piles.
Xiaopeng, which has different power points, currently has a total of 661 brand supercharging stations, which is slightly higher than Weilai. But through horizontal comparison, we can still see the gap between them and Tesla - the data shows that Tesla has opened more than 1,000 super charging stations and more than 700 destination charging stations in Chinese mainland.
And don't forget, Ideal is already clearly lagging behind in this infrastructure war. In the view of the Value Research Institute, in the face of Tesla, as well as Volkswagen, BYD and other traditional car companies, "Wei Xiaoli" still has a lot of room for improvement in the next year in the supporting facilities and services.
Weilai has already spoken that it will lay out the replacement power station at all costs and practice its "five vertical, three horizontal and four metropolitan areas" high-speed power exchange network plan. Weilai co-founder Qin Lihong expects that from 2022 to 2025, WEILAI will build about 600 new substations per year in Chinese mainland, with the goal of building more than 4,000 substations worldwide by 2025, so that 90% of the user housing will become "electric district houses".
Keyword three: supply chain /production line management
Finally, it has to be mentioned, of course, there are supply chain management problems that have plagued the new car-making forces for a long time.
As mentioned earlier, WEILAI encountered a serious supply chain crisis in 2021, which gave Xiaopeng and the ideal opportunity to overtake at the end of the year. However, in the view of the Value Research Institute, the chip famine is a serious crisis sweeping across various industries around the world, and although the most seriously affected at this stage is Weilai, it does not mean that Xiaopeng and Ideal can always be alone. In order to cope with the current and possible future crises, strengthening supply chain management is the key task that "Wei Xiaoli" cannot escape in 2022.
As for the direction of "Wei Xiaoli", it is nothing more than a few old topics that are often talked about: strengthening self-research strength, increasing the scale of production capacity and expanding the supplier team. But in addition, the Value Research Institute believes that there is another point that is also worthy of the attention of the new car-making forces - strengthening the digital and intelligent construction of the production line.
In October last year, the ideal smart factory officially started construction in Shunyi, Beijing, with a total construction area of 270,000 square meters, and is scheduled to be officially put into operation by the end of 2023. The biggest selling point of the ideal smart factory is to improve production efficiency through digital and intelligent means, and it is expected that the annual output will be increased to 100,000 vehicles.
Among them, such as the introduction of high-speed steel and aluminum hybrid automatic stamping line stamping workshop, equipped with intelligent logistics system and unmanned electrical inspection, the whole workshop electric tightening technology production line, as well as the automation rate of 100% of the four models of flexible production lines, all reflect the ideal of the new factory's technological innovation.
The ideal is running wildly in front, Weilai and Xiaopeng, naturally they are not willing to be behind. By increasing production capacity through the intelligent transformation of the production line, it is believed that it will be the next major breakthrough of "Wei Xiaoli".
Keyword four: sinking market
After strengthening the construction of supporting facilities and increasing production capacity, the new forces of car manufacturing will inevitably face another new test: expansion.
According to the statistics of the Prospective Industry Research Institute, by October 2021, the penetration rate of new energy vehicles in China will reach 12.2%, an obvious improvement from 2.8% in 2017, and it is expected to exceed 35% by the end of next year. But the problem is that the main increase in new energy vehicles is still concentrated in the first-line and new first-line markets, and these two main battlefields are facing the dilemma of gradual saturation.
(Image from Prospective Industry Research Institute)
According to the latest research report of Shanghai Securities, as of the third quarter of 2021, 80% of first-tier and new first-tier cities have reached the penetration rate target of new energy vehicles in 2025 ahead of schedule, and in Beijing, Shanghai and other cities with more serious purchase restrictions and traffic restrictions, the penetration rate has exceeded 30%.
In contrast, the european region with the most aggressive new energy vehicle subsidy policy and the highest penetration rate is only 16% overall - in other words, the penetration rate of new energy vehicles in first-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen is already at the leading level in the world. After the market is gradually saturated, in the coming period, it is difficult to avoid the slowdown in the growth rate of new energy vehicle sales in first-tier cities.
In view of this, the new forces of car manufacturing must seize the time to find new increments in the sinking market.
The Value Research Institute observed that since last year, the sales of new energy vehicles in many townships across the country have increased significantly, and the sinking market battle of new car-making forces has achieved certain results.
The data shows that in the first three quarters of 2021, the cumulative sales of new energy vehicles going to the countryside exceeded 600,000, an increase of more than 2 times year-on-year. As of the first half of last year, the new energy vehicle market in third- and fifth-tier cities accounted for nearly 30%, becoming a new engine to promote market growth. Xiaopeng, who has an advantage in cost performance, occupies the first-mover advantage. He Xiaopeng said bluntly that more advanced technology and more advanced configurations will be installed in models facing the sinking market, providing more groups with the opportunity to enjoy the convenience of science and technology.
In addition, Weilai, which has been aiming at the high-end market, has also compromised in the face of reality, opened its own sinking road, and released ET5 last year to cut into the mid-end market below 300,000 yuan.
It is foreseeable that after the market share of first- and second-tier cities is exhausted, the new car-making forces will launch the next stage of fierce competition around the sinking market.
Keyword five: going to sea
In addition to the sinking market, another direction of expansion of new car-making forces is to go to sea.
In fact, "Wei Xiaoli" has long been targeted for overseas markets. Xiaopeng, for example, put the first stop of overseas expansion in Europe. In December last year, Xiaopeng officially delivered new cars to Norwegian users. Moreover, in the past two years, Xiaopeng has also repeatedly invested in European countries such as Sweden, Denmark and the Netherlands to strengthen supply chain construction. Gu Hong, vice chairman of Xiaopeng, also talked about Xiaopeng's ambitions for the international market in an earlier interview with CNBC:
"As a company focused on global opportunities, we want to balance deliveries in domestic and overseas markets, with the long-term goal of selling 50% of our cars abroad and staying home."
Ideal set up his own overseas market team in May last year and began to study issues such as sales channels in overseas markets to prepare for large-scale overseas trips. Ideal co-founder Shen Yanan also said in an interview with the media:
"Ideal Car does have overseas market layout plans and is under close consideration."
Judging from the current layout, most of the first stops of the new car-making forces going to sea are aimed at the European market - high consumption willingness, broad market space and the strong support of the local government for new energy vehicles are all great temptations for "Wei Xiaoli".
However, going abroad and expanding overseas will inevitably face fierce competition with international giants such as Tesla. The data shows that Tesla Model 3 and Model Y are the world's best-selling new energy vehicles. According to Clean Technica, Tesla Model Y averaged about 38,000 vehicles in the first three quarters of this year, and set an all-time high of 68,000 units in September. The Model 3 was the world's highest-selling new energy vehicle in September this year, with monthly sales of 70,800 units.
Due to the first-mover advantage, strong brand effect and mass production ability, "Wei Xiaoli" wants to grab the big cake of the overseas market from Tesla's hands, and it is not so easy. In the coming year, there will be a fierce battle waiting for them.
(Image by Pexels)
Write at the end
In a recent interview with 36Kr, Li Bin analyzed the development of new car-making forces and the market competition pattern:
"I have a point of view, from 2019 to 2024 is called the qualifying stage (of the new car-making forces), and after 2024 and 2025 is the real final stage. The qualifiers have entered the most critical three years, and how to do in the next three years directly determines whether they can qualify or not. ”
Regardless of whether Li Bin's "qualification theory" will come true, from his speech, we can at least be sure of one point: Weilai realizes that it has now come to a critical moment in the market battle for new car-making forces. In the face of all-round competition in the next few years, around the delivery volume, supply chain, supporting services and other dimensions, "Wei Xiaoli" believes that it is psychologically prepared.
All in all, new energy vehicles are the trend of the times, and the "Wei Xiaoli" that rides on the East Wind of the times is ushering in its own era. As for who can lead the way, it may really depend on the development and change in the next three years.