Changan New Energy completed a B round of financing of nearly 5 billion yuan, and 97 employees became shareholders

On January 24, Chongqing Changan New Energy Automobile Technology Co., Ltd. (hereinafter referred to as "Changan New Energy") announced at the signing ceremony of the B round of financing that it had completed 4.977 billion yuan of financing. Among them, Changan Automobile increased its capital by 1.36 billion yuan, and Southern Assets intends to increase its capital by 710 million yuan, and the main capital increase parties also include investors such as BOCOM Yubo No. 1, Chengyuan Fund, Wuhu Xinshi Xinhong and Southern Industrial Fund. After the completion of the capital increase, Changan Automobile's shareholding in Changan New Energy was diluted from 48.95% to 40.66%, and it remained the largest shareholder.

In this round of financing, Changan New Energy introduced the incentive mechanism of employee shareholding, and a total of 97 core backbone employees contributed 117 million yuan to participate in the B round of financing.

Changan Automobile believes that in order to develop the new energy automobile industry, it is necessary to introduce a new operating system, a new incentive mechanism, and a new marketing method through financing to bring new products, new experiences and new brands to users. These innovations are difficult to succeed under the institutional mechanism of traditional car companies, so Changan New Energy must successfully realize the transformation from a traditional car company to a new energy enterprise under a new independent entity, through financing and development, and under the common care of major shareholders. Changan New Energy needs to increase financing efforts and take the lead in resources and institutional mechanisms in order to compete fiercely in the future.

Changan Automobile is the first automobile central enterprise in China to spin off the new energy business and develop independently, and the first automobile to realize the reform of mixed ownership. Changan Automobile began to enter the field of new energy vehicles in 2011, and in 2017, it announced a "Shangri-La" plan with an investment of 100 billion yuan. In 2018, Changan Automobile packaged all its new energy businesses to establish Changan New Energy. However, Changan Automobile's financing road is not smooth. In October 2018, Changan New Energy publicly listed a capital increase, but in June 2019, due to differences with investors, Changan Automobile unexpectedly applied to suspend the termination of this capital increase. After adjusting the capital increase plan, Changan Automobile completed its Series A financing plan in December 2019. Up to now, Changan New Energy has completed two rounds of financing A and B, with a total financing amount of 7.817 billion yuan.

Yang Dayong, general manager of Changan New Energy, publicly stated last year that Changan New Energy plans to IPO on the Science and Technology Innovation Board, according to the plan, within ten years after the IPO, Changan New Energy sales will reach 1 million vehicles, and become the first enterprise of independent new energy in China.

Changan New Energy said that after completing this round of financing, it plans to complete the public listing around 2025, and Changan Automobile supports Changan New Energy to decide whether to continue the next round of financing before the IPO according to the development needs.

At present, Changan New Energy has 4 models on sale, including The Ben E-Star, CS15 E-Pro, CS55 Pure Electric Edition and Yidong EV460. According to the official shuj, Changan New Energy sales will exceed 100,000 vehicles in 2021, an increase of 300% year-on-year. However, the small car Ben E-Star is still the main sales model, accounting for a higher proportion. According to the plan, this year, Changan New Energy will challenge the annual sales target of 210,000 vehicles and strive to achieve the target of 700,000 vehicles in 2025.

At present, the new energy market is developing rapidly. According to data released by the China Association of Automobile Manufacturers, sales of new energy vehicles reached 3.521 million units in 2021, an increase of 1.6 times year-on-year. However, the competition in the field of new energy vehicles is also fierce, and the annual sales of new forces in the head car manufacturing force have approached 100,000 vehicles. For traditional car companies such as Changan, the development of new energy vehicles still faces no small challenges.

According to the plan, this year Changan New Energy will launch C385, C673 and A158 and other models, the first two models are based on the EPA1 platform, of which C385 positioning A+ class pure electric sedan, will be officially listed in the first half of this year; C673 positioning cross-border SUV models; A158 is positioned as a national boutique scooter, the fastest will be released in March.