Rushing to the beach to go public, zero-running cars are difficult to become the frontrunner

This article is the 430th original work of deep diving atom

As we all know, making cars burns money, and listing is undoubtedly the most effective way to solve the problem of funds.

In the 2021 sales ranking of domestic car-making new forces, the first echelon of Weilai, Xiaopeng and Ideal have approached the 100,000 mark, Nezha and Weima in the second echelon have delivered 69,674 and 44,157 vehicles respectively, and Zero Run ranks third in the second echelon, in the middle and lower reaches of the new car-making forces.

△ Delivery of new car-making enterprises

Recently, according to the information disclosed by the CSRC, Zhejiang Zero Run Technology Co., Ltd. submitted to the International Department of the China Securities Regulatory Commission the "Approval of Overseas Initial Public Offering of Shares (Including Ordinary Shares, Preferred Shares and Other Stocks and Derivative Forms of Stocks)" was accepted. This means that Zero Run Technology will officially sprint to the Hong Kong Stock Exchange in the near future.

In fact, as early as October 2021, there were rumors that Zero-Run was considering an IPO in Hong Kong, raising at least RMB6.45 billion. But officials were quick to respond that the news was untrue. Now, with zero running to the CSRC to submit overseas IPO approval materials, this rumor has almost been "confirmed".

In the past two years, the head companies of the new car-making forces have been listed together, and Xiaopeng and Ideal have been listed in the United States and Hong Kong stocks, and the car companies in the second echelon have also been rumored to be listed. Nezha Automobile was rumored to be planning to go public in Hong Kong and conduct an IPO as early as the second half of this year; WM Motors is suspected of preparing for landing in Hong Kong stocks after completing a $500 million financing in 2021; Gaohe Automobile has also recently reported rumors of an IPO and is working with UBS group and Morgan Stanley to arrange potential listings.

On the one hand, Weilai, Xiaopeng, and The ideal are firmly in the head, on the other hand, Nezha, WeiMali pressed a head, behind huawei, millet, Baidu and other giants are looking at the tiger, zero-run cars did not lead as desired, but the pace of grabbing the beach capital market is hurried, showing a strong execution. Under the trend of increasing congestion in the new energy track, whether it can be successfully listed in the next year is particularly important for the second echelon brands of new forces.

01

The second camp sprints to the market

At present, although the sales of new car-making forces have repeatedly reached new monthly sales, the reality is that no company has achieved profitability. Of course, poor hematopoietic ability is the commonality of new forces, and the inability to sell sales is the most fatal to performance.

Although the competitors of zero running are first and foremost Nezha and Weima, in Zhu Jiangming's eyes, it is his goal to sit on an equal footing with Tesla. Since the first model came out, Zero Run has begun a one-sided struggle with Tesla.

In the early stage of listing, the first product S01 of Zero Run took some functions as the selling point of Tesla, but many of them needed to be realized through the late OTA, and it was really difficult for consumers to buy it.

△ Zero run S01

However, more irony lies ahead. High open low walk is not the original sin of S01, the frequent occurrence of product failures is the culprit of the sluggish sales.

After the S01 was listed, the brake system failure, power system failure, control system failure and other issues followed, 200 intolerable S01 owners chose to send an open letter to the brand side on the day of the launch of the Zero Run T03 in May 2020, hoping that Zero Run would give a written answer to the car quality problem.

Echoing the 200 car owners' rights protection, it is the perfunctory response given by Zero Run: "The quality of the whole vehicle product meets the national standard", "Most of them are occasional problems, not safety and quality problems", so it is obviously difficult to calm the anger of consumers.

Under pressure, Zero Run recalled a total of 150 2019 Zero Run S01s in October of the same year. Nowadays, in the product reputation of the car review website, you can still see a large number of user evaluation slots such as "total mileage is virtual" and "the publicity function has not been realized so far".

Although there is controversy in terms of products, Zhu Jiangming's sense of smell for the wind direction of the times is still unquestionable. At the zero-run 2.0 strategy conference in July 2021, Zhu Jiangming put down his bold words of "surpassing Tesla in three years, entering the top 3 of new car-making forces in 2023, and 800,000 vehicles in 2025".

△ Zero run T03

According to Zhu Jiangming's plan, Zero Run will launch 8 new models covering the price range of less than 350,000 yuan by the end of 2025; enter the overseas market in 2022; the overall sales volume will reach 800,000 vehicles in 2025; and the full-scenario autonomous driving technology is expected to be realized in 2024, striving to surpass Tesla within three years.

In the context of the official promotion of zero running, zero running is the only new energy vehicle company besides Tesla that truly has a closed loop of the complete industrial chain of intelligent car self-development, self-production, sales and service integration, so it is said that there are many words beyond Tesla or many more or less traces. But achieving annual sales of 800,000 vehicles in five years is an exaggeration.

It should be known that the plan to sell more than 10,000 vehicles in 2019 has not reached 700 vehicles in the first 10 months; while the target sales in 2020 are 50,000 vehicles, and the actual sales volume is 11,391 vehicles. Zero running painting pie, none of which is realized. As far as the current model matrix and sales volume are concerned, they are not enough to support the ambitious target of 800,000 in 2025.

Of course, Zhu Jiangming's dedication to drawing cakes may be related to the listing plan of zero running. For capital, the "first share" in the second echelon of the new forces is obviously more valuable than other latecomers. Beyond Tesla, 800,000 vehicles, behind it are the good intentions of zero running for the listing. The second camp is indeed very difficult, upward is the stronger strength, higher market awareness of Wei Xiaoli, downward, is the advance is the cliff of life, retreat or death.

02

The pros and cons of global self-development

If the large capital inflow after the listing can be regarded as the fuel for the sustainable development of zero running, then the long-term insistence on global self-research is the killer weapon of zero running to "lead" the new forces.

Zhu Jiangming is not only the founder of Zero Run Auto, but also the co-founder and CTO of Dahua Shares. After making Dahua the second in the world in the field of security, Zhu Jiangming began to look for new growth points, compared with the 100 billion market size in the field of security, new energy vehicles are an easy to eat and big new cake. Zhu Jiangming took advantage of the trend and officially established a zero-run car at the end of 2015.

As a "science and engineering man" with nearly 30 years of R & D and manufacturing experience, Zhu Jiangming believes that the core technology self-research is of great significance to the long-term development of the enterprise, at the beginning, zero run firmly chose the "global self-research", from chips to three electric systems to vehicle networking solutions and other core technologies, always adhere to independent research and development.

△ Lingxin 01

At the Guangzhou Auto Show held in November 2021, Zhu Jiangming, chairman of Zero-Duty Automobile, explained in detail the "global self-research" that Zero-Run Automobile has implemented for many years. He said: "We have achieved our core competitive advantage through global self-research. He said that the drive assembly and battery fields have also developed from external batteries to their own modules, packs and BMS (battery management systems). In addition, zero-run cars have achieved self-development in vehicle systems, cloud platforms, intelligent driving, etc.

In addition, in order to get rid of the dilemma of chip "card neck", Zero Run and Dahua joined hands to create a smart driving chip "Lingxin 01", which has been installed on Zero Run C11. If Lingxin 01 achieves mass production, it is expected to become China's first self-developed intelligent driving chip.

For zero-run, the biggest benefit of "global self-research" is the low cost brought about by the future scale effect. Zhu Jiangming said that although a large amount of cost investment is required for global self-research in the early stage, the marginal cost of each vehicle can be shared through the sales scale, including software research and development costs and hardware procurement costs.

But on the other hand, "global self-research" also brings other problems to zero running. First of all, the financial pressure brought by R&D investment is enormous. Although Zero Run does not publish accurate figures for annual R&D investment. However, with reference to the three Wei Xiaoli companies, the annual investment of a company in research and development is 1 billion yuan, and the net profit of Dahua shares in the first three quarters of 2021 behind zero running is only 2.4 billion.

The huge investment of "global self-research" may make the cash flow of zero run tight on the one hand, and some marketing or channel expansion expenditures have to make way for technology; on the other hand, technology self-research is a longer process than external procurement or joint development. For example, the focus of the C11 and its publicity of L2 assisted driving, in fact, has lagged behind Weilai and Xiaopeng for nearly 2 years.

△ Introduction of self-driving technology for zero-run cars

In addition to the slow research and development, whether the strength of self-developed technology is passed, whether it will lead to problems in product quality control, these are also problems to be faced by zero running. Strong R & D strength is one thing, but to convert strength into sales is the most critical, just like students know more, the test is not good, and the lack of zero running lies in this. It seems to be ready to do a big job, and as a result, once it arrives at the battlefield, the sales volume is still not satisfactory.

03

I haven't learned to please users

According to DoNews, a number of consumers complained that the zero-run car did not deliver the car on time without explaining the reason, the clerk's attitude was malicious, or suspected of contract fraud.

In terms of channels, zero running adopts the lowest cost model, mainly franchised, supplemented by direct operation. Unlike Tesla and Weilai, which take the concept of increasing user stay and creating comfortable rest areas including coffee, special drinks, reading, etc., the design concept of the zero running center is more sales-oriented, and there will not be too many attributes such as urban living space.

In terms of quantity, as of June 2021, Zero Run has a total of 158 stores across the country, covering first-, second- and third-tier cities across the country, and this number is the network layout that Wei Xiaoli has completed last year.

The old sales model is out of place in the service concept of the new forces advocating "user first", and it is naturally difficult to leave an impression in the minds of consumers and bring a premium to the product.

As a member of the second echelon of the new car-making forces, can the zero run that preemptively promotes the listing continue the dividends of the capital market? How to open up further visibility after new funds enter? Can the C11, which has high hopes, support sales and enhance the brand image? The answers to these questions are still unknown, and they also test the business strength of zero run. We will see where the zero-run car will go after the listing.