Changjing builds cars, Tencent dreams come true?

Recently, the media broke the news that Luoke Automobile, the car-making project of Chang Jing, founder and CEO of Stone Technology, completed a financing of 100 million US dollars at the end of 2021, led by Tencent Group, and Sequoia Capital also participated in the investment. "Stone Technology founders off the road to build cars" and "Tencent led the investment" has undoubtedly become the focus of public opinion, the last new energy vehicle enterprise invested by Tencent, Weilai Automobile, has become one of the representatives of new energy vehicle forces. So, why is Changjing, who does not have a vehicle industry background, favored by Tencent? The first camp of new energy vehicles was established several years behind, where is the opportunity for Luoke Automobile? What problems may be faced?

At least five years behind "Wei Xiaoli",

Why is it still favored by Tencent?

Although some media regard Luoke Automobile as a signal for Stone Technology to enter the new energy automobile industry, in Stone Technology's external expression, this project initiated by the founder of the company does not intersect with the company. The enterprise investigation shows that Shanghai Luoke Intelligent Technology Co., Ltd., the main company behind Luoke Automobile, is not among the holding companies in which Stone Technology participates. In addition, after the rumor of "Changjing Car" appeared in April last year, Stone Technology responded that the project was not directly related to Stone Technology, and Stone Technology did not participate. Stone Technology insiders also confirmed this statement to the media this year, saying that "building a car is a personal act of the boss."

According to public information, Shanghai Luoke Intelligent Technology Co., Ltd. was established in January 2021, compared with the ideal (established in April 2015), Weilai (established in May 2015) and Xiaopeng (established in May 2016) in the last wave of car manufacturing, the three new energy vehicle companies are at least five years behind, but at present, Luoke Automobile still seems to have certain advantages.

First, the founder has a relatively good career and entrepreneurial background, which is undoubtedly a plus. Chang Jing graduated from South China University of Technology with a degree in computer science and a software engineer, and served as a senior product manager at Tencent in 2011, after which he founded Meitu Tools Beijing Magic Map Genie and Stone Technology. Affected by the epidemic and people's demand for quality of life, in recent years, sweeping robots have gradually become the most concerned category in cleaning electrical appliances. Stone Technology, which takes sweeping robots as its main business, relies on the support of Xiaomi's ecological chain to land on the Science and Technology Innovation Board in February 2020, and has also become the technology company with the highest stock price in this securities sector.

Aowei Cloud Network pointed out that from the perspective of the proportion of categories, sweeping robots accounted for 38.8%, becoming the largest subdivision of the clean track, and in the past year, the scale and average price have increased significantly. Stone Technology is also sought after by the capital market, and its stock price reached the highest point of 1492.15 yuan in the middle of last year, once approaching the market value of 100 billion.

In addition to the beautiful entrepreneurial achievements, Changjing has both experience in the hardware and software industry, and seems to be quite praised in the circle. According to media reports, Changjing is a "product-type" car-making entrepreneur with current capital preferences, low-key, likes to delve into products, and its WeChat signature also says "I am a product manager", and he is also a typical car enthusiast, especially fond of off-road vehicles. According to another news, the positioning of the first car of Luoke Automobile also happens to be a off-road model of the benchmark Mercedes-Benz G series, positioning the direction of increased range, and also pulling Yan Feng, the former CTO of WM Motors, as CEO.

Second, although Changjing himself has no experience in the whole vehicle industry, the experience accumulated in the previous product technology still has certain reference value. Some analysts believe that the technologies such as mapping, obstacle avoidance, automatic start and stop of charging, and remote control applied on the stone sweeping robot have some commonalities with the unmanned driving technology promoted by the new generation of cars. As early as 2017, the 360 autonomous driving team had launched sweeping robot products, when it was mentioned that driverless cars and sweeping robots used the same sensor configurations such as lidar, ultrasonic, odometer, gyroscope/accelerometer and so on.

In turn, based on the technology of sweeping robots, it provides technical support for vehicle manufacturing, which seems to be more convincing to investment institutions than other companies with no car manufacturing experience. Chang Jing, the founder of Stone Technology, previously said, "On the one hand, the lidar on the sweeping robot is the same as the lidar logic of Google's unmanned vehicle, and we are equivalent to applying the unmanned vehicle technology to the field of sweeping robots; On the other hand, we have moved the relevant path planning and positioning technology indoors and applied it to the sweeping robot. ”

The above two factors may also be an important reason for Tencent's decision to invest in Luoke Automobile, and before that, the previous wave of new energy automobile companies have already made trial and error in the technical direction, which has largely paved the way for Luoke Automobile to choose which technical development direction.

Latecomers Luoke Cars,

There are still a number of problems that need to be solved urgently

In recent years, the "double carbon" goal proposed by China has undoubtedly brought huge development space for new energy vehicles. According to the development vision given by the annual meeting of the Society of Automotive Engineers of China "Energy-saving and New Energy Vehicle Technology Roadmap (Version 2.0)", by 2035, energy-saving vehicles and new energy vehicles will each account for 50% of annual sales. According to the data released by the Federation of Passenger Vehicles, the cumulative sales of passenger cars in 2021 were 20.146 million units, and the cumulative sales of new energy vehicles were 2.989 million units, accounting for only 14.84%, indicating that there is still a lot of room for improvement in the development of new energy vehicles at this stage.

The overall market performance of new energy vehicles also shows that this industry is still far from touching the ceiling. The development time of new energy vehicles in the domestic market is not long, and the various enterprises with top sales have also maintained a trend of rapid growth. According to the data released by the Association of Automobile Manufacturers, the cumulative sales of new energy vehicles in January-December 2021 increased by 169.1% year-on-year, and the top 15 companies showed growth rates ranging from 109.1% to 361.7% last year. This is also an important reason why the domestic new energy vehicle market is still constantly pouring in new players.

Although new energy vehicles are regarded as a sunrise industry, Luoke Automobile, like other new energy vehicle companies, still faces some problems that need to be solved.

First of all, entering the new energy vehicle, the need for huge funds as a support, Luoke Automobile wants to expand the market, you have to choose to compete with existing players for market share, or another way to choose a market segment, at this stage crazy burning money is inevitable. Therefore, even if Luoke Automobile has recently received financing of 100 million US dollars, compared with the operation mode of existing new energy vehicle companies, whether it is choosing to build a factory or outsourcing OEM, it is obviously a drop in the bucket, and there are also rumors that Luoke Automobile has opened the next round of financing. At the beginning of his business, Li Bin, the founder of Weilai, said that "there is no 20 billion yuan to think about building cars", and then frankly said that "this number is estimated to be small", believing that the starting capital of 40 billion yuan is the standard for enterprises that start to build cars at this stage. Therefore, some analysts believe that Luoke Automobile wants to gain a firm foothold in the market at the beginning of its establishment, coinciding with Xiaomi's announcement of car manufacturing, and may also use the Xiaomi ecology.

Secondly, how luoke automobile as a new brand to open up market awareness and get more consumer recognition is also a problem. The 2021 passenger car sales data released by the Association of Automobiles shows that BYD Automobile ranks first in the sales ranking of new energy vehicles with 584,000 units, except for Tesla in the third place, the rest are traditional car companies and related subsidiaries, and the new forces of new energy vehicles Xiaopeng, Weilai and Ideal rank seventh, ninth and tenth with sales performance of 98155 units, 91429 vehicles and 90491 vehicles respectively, and there are no other cross-border enterprises in the top fifteen, which are blessed by the influence of the original brand. The transformation of new energy vehicles by traditional car companies still has greater advantages.

Before Changjing entered the new energy vehicles, home appliance companies such as Midea, Gree, Hisense, TCL, Skyworth and other home appliance companies have announced their participation in the layout of new energy vehicles, of which only a very few enterprises such as Gree and Skyworth directly build cars, and other companies are cautious about directly joining the new energy vehicle war at this stage, and are more inclined to cooperate with existing car companies to participate in the form of research and development of on-board electrical appliances and parts. Skyworth Automobile can be regarded as a better case of cross-border home appliance companies, but some data show that since the renaming of "Tianmei Automobile" from August to December 2021, Skyworth EV6 has ordered 4879 vehicles, and if calculated according to this sales volume, the annual sales volume is only at the level of more than 10,000 vehicles. Relying on Skyworth's brand influence in the black electricity market, in the highly competitive new energy market, how Luoke Automobile should more effectively reach the consumer group is also a question.

In addition, some analysts believe that Luoke Automobile's choice of range extender technology may be safer at this stage, but the debate around the development prospects of range extended electric vehicles still exists to this day, and some views believe that range extended electric vehicles are more suitable for driving in the city, but the technical route is simple, there are problems such as increased fuel consumption and noise increase when driving at high speed and long distances, and the cost and maintenance fee are higher than pure trams, which is difficult to carry forward.

Obviously, Luoke Automobile still has a long way to go in terms of production capacity, user popularization or the exploration of technical routes.