After a year, Changan New Energy's B round of financing has finally settled.
On January 24, Changan New Energy announced the completion of the B round of financing, with a financing amount of about 4.977 billion yuan. Compared with the planned financing of 3 billion yuan at the beginning of 2021, nearly 2 billion yuan was exceeded.
Among them, Changan Automobile increased its capital by 1.36 billion yuan, and the main parties to increase the capital also include Southern Industrial Asset Management, Bocom Yubo No. 1, Chengyuan Fund and Wuhu Xinshi Xinhong. After the completion of the capital increase, Changan Automobile's shareholding in Changan New Energy was diluted from 48.95% to 40.66%, although it was still the largest shareholder.
"Capital is one of the indispensable resources for the current competition in the new energy automobile industry", so Changan Automobile fully supports Changan New Energy to obtain development funds through equity, debt and public listing.
Changan Automobile officials said that after the completion of this round of financing, Changan New Energy plans to complete the public listing around 2025. However, it is not excluded that before the IPO, Changan New Energy will continue to carry out the next round of financing according to the needs of development.
Operating independently, replenishing ammunition, and seeking listing, in the new energy battlefield, traditional car companies are struggling to launch a counterattack.
Next IPO
According to Changan New Energy, since the official opening of the B round of financing in April 2021, Changan New Energy has identified 9 high-quality investors after nearly 200 negotiations and three rounds of screening, and finally completed the delisting of investment institutions on December 23, 2021.
Draft: Future Automotive Daily
In the B round of financing of Changan New Energy, we can see the figure of investors in the government department, the finance department and the industry department.
According to Tianyan' investigation, the largest shareholder of the Chengyuan Fund, which increased the capital of Chang'an New Energy by 700 million yuan, is Chongqing Liangjiang New Area Industrial Development Group Co., Ltd., which is controlled by the Chongqing Liangjiang New Area Management Committee and belongs to the government-affiliated investors; the Deqing Mixed Reform No. 2 Fund, which increased its capital by 100 million yuan, one of its shareholders is Zhongshan Dayang Electric Motor Co., Ltd., which is engaged in business including the development, production and sales of electric drive motors and control systems for new energy vehicles; and funds such as Southern Assets and Ciccumbic Keyuan Fund are financial investors.
Changan New Energy is also the first enterprise under Changan Automobile to realize employee shareholding, and the amount of employees raised funds exceeded 100 million yuan. Wang Jun, president of Changan Automobile and deputy secretary of the party committee, said that he is the single largest shareholder of Changan New Energy, and there are 97 employees of Changan New Energy, "choosing to breathe with the company and share the same destiny."
Similar to Changan New Energy, the diversification of investors' backgrounds has gradually become a trend. In August 2021, Extreme Kr completed a strategic financing totaling US$500 million, with investors not only capital investors, but also industrial investors, involving chips, batteries, battery raw materials and other fields. "Compared with capital investors, industrial investors can not only bring funds, but also establish long-term and stable in-depth strategic cooperation, and their 'monetization demand' is not so strong." Automotive industry analyst Wang Chenyu analyzed the future automotive daily.
"The future of the automotive industry lies in new energy, and the new energy departments of traditional car companies must be split and independent, external financing, and establish a mechanism for benefit sharing in order to maximize resource integration and smoothly achieve transformation."
In fact, Changan Automobile is the first traditional car company to spin off and develop its new energy business independently.
In 2018, Changan New Energy was separated from the Changan Automobile system and became independent, with a registered capital of more than 200 million yuan. Zhu Huarong, then president of Changan Automobile, once said that the reason for building the new energy sector independently was to use foreign capital, which could reduce risks and ensure sufficient resources.
However, the road of financing, Changan New Energy is not going well. In August 2018, Changan New Energy planned its first capital increase, and less than a year later, Changan Automobile announced that it would temporarily terminate the capital increase due to "disagreements between intended investors and Changan Automobile on core terms".
After adjusting the capital increase plan, Changan Automobile introduced four strategic investors in December 2019, including Changxin Equity Fund, Liangjiang Fund, Southern Industrial Fund and Nanjing Runke Industry, with an investment amount of 2.84 billion yuan and successfully completed the A round of financing. After the completion of the transaction, the equity of Changan New Energy held by Changan Automobile was diluted from 100% to 48.95%, and Changan New Energy was also changed from a wholly-owned subsidiary of Changan to an associated enterprise.
However, this fund did not help Changan New Energy stop the loss. According to the announcement of Changan Automobile, as of September 30, 2021, Changan New Energy's total assets were 6.358 billion yuan, and its net profit was a loss of 1.595 billion yuan.
After two years, Changan New Energy completed the second round of financing (B round of financing) as desired, and in addition to supplementing funds, it is a further step towards the listing plan.
Changan Automobile believes that the success of the B-round financing of Changan New Energy will achieve mechanism and system innovation internally, strengthen the foundation, realize the complementary integration of resource advantages externally, and strengthen competitiveness, which will accelerate the landing of Changan Automobile's "Shangri-La Plan" layout and achieve Changan Automobile's long-term development goals.
However, the problem of Changan New Energy cannot be solved by relying on funds.
4.9 billion is also difficult to solve the dilemma
On the road of new energy, Changan Automobile can be described as "getting up early and catching up late".
As early as 2011, Changan Automobile entered the new energy vehicle track. In March 2015, Changan Automobile released its new energy plan, and it is expected that by 2020, Changan's cumulative sales of new energy vehicles will reach 400,000 units. In October 2017, Changan Automobile announced the "Shangri-La" plan, saying that it would invest 100 billion yuan to develop the new energy vehicle business. In order to show its determination to transform to electrification, Changan plans to completely stop selling traditional fuel vehicles in 2025, becoming the first car company in China to propose a ban on the sale of fuel vehicles.
Ambitious plans, but not enough to withstand the bone reality.
According to the data of the Association, the sales volume of New Energy Vehicles in Changan in 2020 was only 18,000 units, down 35.3% year-on-year, and the sales of new energy vehicles accounted for only 1.9% of Changan Automobile's total sales, far from the previous target. In 2021, Changan New Energy's annual sales volume will be 76,500 vehicles, and it will even be inferior to some new car-making forces.
Product "oil to electricity" and low-end models are the main reasons why Changan new energy products have been criticized by the market.
Open the official website of Changan Automobile, the new energy sector only has CS55 pure electric version, Ben Ben E-Star, CS15 E-Pro and Yidong EV460 four models, and are all "oil to electricity" products, is based on the fuel model to adjust, by netizens as "eager to achieve the victim, in battery life, product performance and other aspects of the performance is not satisfactory."
Among them, The Ben E-Star is positioned as a micro-electric vehicle, which is the "sales responsibility" of Changan New Energy. According to Changan Automobile's sales report, its cumulative sales in 2021 exceeded 70,000 vehicles, accounting for more than 90% of Changan New Energy's total sales. Compared with the competitor Wuling Hongguang MINIEV, this figure is insignificant. According to the data of the Association, in 2021, the sales volume of Wuling Hongguang MINIEV reached 395,500 units.
Changan Automobile began to face reality. In August 2021, Changan Automobile said that by 2025, Changan brand sales will reach 3 million vehicles, accounting for 35% of new energy models, and at the same time, Changan abandoned the plan to completely stop selling fuel vehicles in 2025. On January 24, 2022, Deng Chenghao, general manager of Changan New Energy, introduced that Changan New Energy's new goal is to sell 700,000 vehicles in 2025, and strive to become a "world's first-line mainstream electric vehicle brand".
To achieve these goals, it is crucial to increase product capabilities. At the B round of financing press conference, Deng Chenghao said that the senior engineer team of Changan New Energy has reached 799 people.
Since 2017, Changan New Energy has independently developed special platforms for electric vehicles such as EPA1. The first car built on the platform, the C385, was unveiled in June 2021 and is equipped with L3+ advanced assisted driving, AR eco-smart cockpit, zero fire battery and other configurations, and will be launched in 2022.
C385 Source: Changan New Energy
To Changan's disappointment, the C385 has not received much attention from consumers, and after the car was unveiled, it failed to cause heated discussion among netizens.
"C385 is still the internal code name of a car, and there is not much information released at present, and there is no more exciting black technology in sight," Wang Chenyu commented to Future Automotive Daily.
According to Changan New Energy, the C385 is equipped with the APA7.0 remote unmanned valet parking system, which can realize unmanned autonomous queuing; it also has a new generation of super electric drive with high-frequency pulse heating technology, which can achieve 5 minutes of heating to 20 °C in an extremely cold environment of -30 °C, and the mileage is increased by 40-70km, but in terms of key configurations such as intelligent cockpit and assisted driving, Changan New Energy has revealed less information.
In the next 3-5 years, in addition to C385, Changan New Energy will also build three new cars based on the EPA1 platform and launch a new car based on the EPA0 platform. Among them, the model code-nameD A158 is positioned as a "boutique scooter", which will be officially released in March-April 2022 and start delivery in June-July.
Source: Changan New Energy official
According to the official plan, C385 and subsequent EPA1 platform products will focus on mainstream users in the market and achieve scale breakthroughs; Benben products will focus on the micro-electric market and achieve breakthroughs in industry occupancy. In the future, Changan New Energy will focus on the mainstream market below 200,000 yuan.
But in this market segment, there are already strong enemies. On September 15, 2021, Xiaopeng launched the Xiaopeng P5, which starts at 157,900 yuan, with a range of up to 600km and is also equipped with lidar. On October 21 of the same year, the first BYD Dolphin based on the e-platform 3.0 was officially listed, and the price was more competitive (93,800-121,800 yuan). In addition, new forces such as Nezha and Zero Run have also been deeply cultivating the "cost performance" route for a long time.
The future of Changan New Energy is difficult to say optimistic.
The author | Wu Xiaoyu
Edit the | Li Huanhuan