Although the threshold for car building has been continuously lowered with technological progress, it is only a reduction in the threshold of difficulty in building a car, and the funds required for car building are still extremely large. In the early days, Li Bin, CEO of Weilai Automobile, once said, "Don't build a car without 20 billion", and some time ago, Li Bin stressed in an interview that "there is no 40 billion car manufacturing can not be done", which shows that the capital threshold required for car manufacturing has not been lowered with the progress of technology.
For the new car-making forces, they may have good financing capabilities, but under the premise that their own hematopoietic ability cannot solve the loss, listing has become the only way. In the first wave of car manufacturing, "Wei Xiaoli" successfully stood out and completed the listing in the US market, among which Ideal and Xiaopeng Automobile even completed the innovation of secondary listing in the Hong Kong stock market.
After the successful listing of "Wei Xiaoli", since last year, Weima, Nezha and Zero Run, the second echelon of the new car-making forces, are all competing for the fourth IPO ticket. With the passage of time, in this IPO competition, zero-run cars seem to have come to the forefront. On January 26, the CSRC website announced the progress of Zhejiang Zero Run Technology Co., Ltd.'s "Approval of Overseas Initial Public Offering of Shares (Including Ordinary Shares, Preferred Shares and Other Types of Stocks and Derivative Forms of Stocks)", of which the IPO progress of Zero Run Auto has reached the stage of receiving materials.
Judging from the information currently disclosed by the CSRC, it seems that zero-run cars have abandoned the plan to land on the science and technology innovation board that has been announced many times before. In fact, whether it is zero running, or Nezha, WM or Geely Automobile have previously folded in the science and technology innovation board, due to the tightening of the A-share policy and the strengthening of supervision, which means that the conditions for the listing of car companies will be more difficult in the future, the relationship between shareholders and foreign capital under the new system will be considered, and Hong Kong stocks are more flexible than the A-share mechanism, so these new car-making forces like zero-running cars will choose to choose the listing location in the Hong Kong stock market after folding the science and technology innovation board.
The acceleration of the IPO process of zero-run cars has actually been around since the end of last year. On the evening of December 17, 2021, Dahua Co., Ltd. issued an announcement that Mr. Zhu Jiangming applied for resignation as a director of the seventh board of directors of the company and a member of the strategic committee under the board of directors for personal reasons, and he will no longer hold any position in the company after his resignation.
Although for Zhu Jiangming's departure from Dahua shares, Zero Run Auto has always emphasized that "Zhu Zong is more focused on zero run business, and others do not need to be interpreted too much", but it is generally believed that the reason why Zhu Jiangming left Dahua Shares is mainly that Zero Run Cars is about to be listed in Hong Kong. This speculation is also corroborated by the disclosure by the CSRC of zero-run vehicles' filing of IPO materials.
Now that Zero Run Auto is about to complete its IPO in Hong Kong stocks, I believe many people have doubts. It should be known that the advantage of zero-run cars in the second echelon of the new car-making forces is not obvious, and even its total sales last year lagged behind Nezha Automobile. So why is the zero-run car achieving an IPO faster than Nezha, which has a more obvious advantage? For this problem, let's analyze it carefully.
Funds and sales are not dominant
The main reason why zero-run cars have expressed doubts about the first step of the IPO so quickly is that in the past 2021, whether it is in the scale of capital financing or sales, zero-run cars have not prevailed.
First of all, in terms of capital, before 2021, in addition to drumming out a pure electric coupe that is neither popular nor popular, the volume of zero-run cars is not high, so it will not start B round financing until 2021, and then directly to the Pre-IPO round. In January last year, zero-running car in the B round of financing took 4.3 billion yuan, by the SDIC Chuangyi, Yonghua Capital, Gopher Assets, Guosen Hongsheng, Hangzhou Nuclear Poly Asset Management and other 8 institutions to invest, in the new round of financing in August of that year, zero-running car took 4.5 billion, led by CICC Capital, Hangzhou state-owned assets to invest 3 billion yuan, CITIC Construction investment capital, CITIC Dicastal investment, the fundraising is intended for product research and development, channel layout and brand promotion. The number of financing times for zero-running cars is not much, but it is all big money, with a total financing amount of more than 11.5 billion yuan, becoming another new car-making force enterprise with financing of more than 10 billion yuan after Weilai, Xiaopeng, Ideal, Weima, Nezha and Tianji.
Image source Gronhui
Although the financing scale of zero-run automobiles exceeds 10 billion, there is still a certain gap compared with Nezha Automobile, especially in the financing scale in 2021. Like zero-running cars, Nezha Automobile also took a lot of money in 2021, last April, Qihoo 360 led the investment in Nezha Automobile D round financing, the financing amount reached 3 billion yuan, to October, Qihoo 360 continued to lead the investment, CCB International, CITIC Securities, Shenwan Hongyuan, Jifu Venture Capital and other investment completed 4 billion yuan D1 round of financing, in November Ningde era and Nezha Automobile in the D2 round of investment agreement, the two sides in the field of technology research and development and supply chain protection to fully open strategic cooperation. Then, less than a month later, 17 institutions, including CITIC Securities, CCB International, BAIC Industrial Investment, Ningbo Meishan, and Qihoo 360, once again made strategic investments in Nezha. Up to now, the total financing amount of Nezha Automobile has exceeded 12 billion yuan, and from the perspective of the financing amount of 2021, Nezha Automobile should also be much higher than the zero-running car.
In terms of sales, although zero-run cars grow rapidly in 2021, their total sales not only cannot surpass WM Motors, which was once in trouble, but also the gap between it and Nezha Automobile is gradually widening. According to the data, the total sales of zero-running cars in 2021 were 43,121 units, an increase of 96.8% over 2020, while the total sales of WM Motors in 2021 were 44,157 units. Last year, the total sales volume of Nezha automobiles was 69,674 vehicles, nearly 30,000 more than zero-run cars, a lot of gaps.
It can be seen that whether in terms of capital or sales, zero-run cars do not have absolute grasp and advantage at present, which can be described as having strong enemies before and chasing soldiers. In fact, there is more than one new force rushing to the Hong Kong stock market, after Bloomberg quoted sources as saying that Nezha Automobile and Gaohe Automobile have also recently reported that they are about to land on Hong Kong stocks. So why did the zero-run car, which is not dominant in capital and sales, take the first step in the IPO? I think it has a lot to do with the strategy of zero-run cars.
The advantages of zero-run cars are in full self-development
In fact, due to the backing of the domestic security giant Dahua shares, zero-run cars have taken advantage of the former's ADVANTAGE in the IT field and have realized the combination of software and hardware and all-round self-research. It can be said that in the current layout of new energy, zero-run cars are the only two new energy vehicle companies that truly have a complete industrial chain of self-research, self-production, sales and service integration of intelligent vehicles in addition to Tesla. Because of this, at the zero-run 2.0 strategy conference held in July last year, Zhu Jiangming, the founder of zero-run cars, will not be ashamed to say the bold words that have surpassed Tesla in three years.
Although many people think that Zhu Jiangming's bold words are more self-bragging, and its purpose is more to hype zero-run cars and make them a traffic hotspot, from the perspective of the full self-research road of zero-run cars, it is indeed expected to catch up in the context of the current general lack of cores. Different from the "take-ism" of other new car-making forces to outsource core components to suppliers, today's zero-running cars have mastered the core technologies such as the three-electric system to the vehicle networking solution, especially the car-level chip, which previously launched the zero-run C11 equipped with the Leap Pilot 3.0 intelligent driving assistance system, of which the core technologies such as chips, algorithms, perceptions, and data are the results of the self-research of the zero-run car full stack. In addition, all the core chips of the entire ADAS system like C11 are almost all domestic, while the Lingxin 01 chip is a self-developed self-developed joint effort between Zero Run Automobile and Dahua.
According to the data previously released by Zero-Run Car, Lingxin 01 adopts a 28nm process process, which has a computing power of 4.2Tops and a power consumption of 4W. Although from the perspective of computing power, the Lingxin 01 chip with a computing power of only 4.2TOPS still has a large gap compared with Tesla's FSD chip 72TOPS, but because its core processor uses a domestic CPU, that is, Ali's PingtouGe Semiconductor Company "Gentetsu C860", integrates a high-performance AI neuron processor, the overall energy consumption ratio is lower, more open, more secure and reliable. Compared with some chip developers who still rely on foreign arm architecture, Lingxin 01, which has completely independent intellectual property rights, makes zero-running cars not encounter hidden dangers of card necks in the context of the current general lack of cores.
In addition to the chip and automatic driving algorithm self-research, the current zero-run car in the three-electric system of the technical performance is not inferior to other car companies, such as zero-run pioneering design of the "eight-in-one" integrated electric drive assembly "Heracles", has passed the durability test of 500,000 kilometers of accelerated life test, and its system efficiency is even as high as 94.52%.
It is precisely because of the adherence to the strategy of full self-development from the beginning that zero-run cars can quickly survive after experiencing the setbacks of zero-run S01. This time, the reason why Zero-run Cars once again led the second echelon of new car-making forces such as Nezha and Weima and took the first step in the IPO is believed to be related to its fully self-developed strategy.
Although zero-running cars are about to land on the Hong Kong stock market, solving the problem of financing difficulties, zero-running cars have not yet reached the time to celebrate. At present, there is still no way for zero-running cars to achieve self-hematopoiesis. According to the calculation of Dahua's annual report, the annual loss of zero-run cars since 2018 has been 307 million, 588 million and 1.39 billion respectively, and even a loss of 860 million in the first quarter of 2021. Considering the accelerating loss of zero-running cars, its financing of 8.5 billion yuan in 2021 may only be enough to burn for 2 years.
Not only that, although in the first month of 2022, the sales of zero-run cars are gradually catching up with Nezha Cars, but from the perspective of sales distribution, the hidden dangers of zero-run cars still exist. In January, zero-run cars delivered 8,085 vehicles, setting a record for single-month deliveries, an increase of 434% year-on-year, a good momentum, but zero-run cars still sold zero-run T03. In terms of cumulative sales, the cumulative delivery volume of zero-run cars in 2021 was 43,121 units, of which the cumulative delivery of zero-run T03 reached 38,463 units, accounting for 89% of total sales.
What's worse is that with the further decline of subsidies and the sharp rise in the cost of lithium batteries, the zero-run T03 can not withstand the pressure to raise prices before. It is understood that the subsidy price of the 2022 zero-run T03 has been raised to 68,900-84,900 yuan, and the price increase is 8,000-9,000 yuan, which has a great impact on price-sensitive mini cars. If there is no way to expand the sales proportion of zero-run C11 in a short period of time, then once the sales volume of zero-run T03 fluctuates, it will have a great impact on the current good situation of zero-running cars.
In summary, even if zero-run cars quickly land on the Hong Kong stock market, for it, it is only an increase in a financing route, and its future is still obstacle and long, which needs to be slowly clarified by Zhu Jiangming.
Summary: For zero-run cars, going public is not the end, and it's not even the time to celebrate. It is true that among the opponents such as Nezha and Weima, zero-running cars have successfully run out, and it is expected to become the fourth new car-making force to achieve IPO after "Wei Xiaoli", which is indeed worthy of pride, and even has certain gains in its future financing, but the scale effect and profit are the fundamentals of business operation.
At present, zero-run cars are only one step away from achieving IPO, but there are not many problems with zero-run cars at present, with the decline of subsidies and the soaring cost of lithium batteries, the zero-run cars that used to rely on micro-SUVs to survive T03 can still last for a question mark. If the zero-run car has no way to achieve self-hematopoiesis, then the strong supervision after the successful IPO is easy to further amplify the problem.