Euler black cat single loss of more than 10,000 yuan, A00 level electric vehicle loss to earn?

With the decline of subsidies and the rise in raw material prices, many new energy vehicle companies have adjusted the terminal price. However, for low-priced models in the A00-class car market such as SAIC-GM-Wuling Hongguang MINI EV and Euler Black Cat, the pressure brought about by rising costs is more prominent.

Recently, Euler's two main models, the white cat and the black cat, stopped taking orders, which triggered speculation in the industry. However, Euler said in a statement released on the evening of February 23 that all after-sales services of black and white cats will continue to be maintained and will not be affected by the suspension of orders.

"Black and white cats stopped taking orders, not stopped production, and we did have difficulties." Dong Yudong, CEO of the Euler brand, said that although there are advantages in the industrial chain behind the Euler brand, this fashionable and people-friendly car still brings huge losses to the company. Taking black cats as an example, after the sharp rise in raw material prices in 2022, Euler black cats lost more than 10,000 yuan per unit. In addition, the black and white cats caused by the lack of core and electricity have not yet delivered new cars to users, and the cumulative number of orders exceeded 20,000, and if orders continue to be received, the delivery of new orders will wait until the second half of 2022.

The amount of the loss may be widened

Not only Euler, but also the entire new energy vehicle market is still facing the challenge of lack of core and battery. When the first financial reporter visited the new energy vehicle market recently, he found that the product delivery cycle of many new energy vehicle companies was extended. Taking Xiaopeng Automobile as an example, Xiaopeng p7 this model is the fastest to pick up, but it will wait at least 3 months or so. The small electric vehicle EX3 Kung Fu Niu launched by Geely's new energy brand Geometry Automobile was officially listed on November 14, 2021, but most car owners still can't pick up the car, and the cycle of waiting for the car has been extended repeatedly.

In the past two years, small cars such as euler black cats have quickly gained the market with a low-price strategy, but as the cost rises, the higher the sales volume means the higher the loss amount faced. If such small cars are adjusted at the terminal, it may be difficult for consumers to accept. Therefore, most car companies choose to self-digest the pressure of rising costs.

"Even with the cost management of the Great Wall, it is difficult to find room for cost reduction, and the damage of A00-class cars of other companies is likely to be greater than that of Euler black and white cats." Dong Yudong told reporters that the direct cost of new energy vehicles is relatively transparent, from the current product status and cost analysis on the market, most of the losses of standard passenger cars above 300km, there may be enterprises by adjusting the financial model, the cost of capitalization, part of the cost transfer and other means to reduce the book loss, but most of the models of straight material costs are about equal to the price plus subsidies, so the loss is certain.

"As raw material prices rise, losses worsen. We're always looking for solutions, but the industry development in this segment is unhealthy. Dong Yudong told reporters that the price increase of battery raw materials is not over, which will further increase the cost pressure. Dong Yudong gave an example to reporters, in terms of 30 kWh 300km cruising range of products, the overall cost will increase by about 7000 yuan, of which the increase in cost due to the rise in the price of battery raw materials is about 3100 yuan ~ 3500 yuan, and the subsidy decline also leads to an increase in costs of about 3400 yuan.

The price of power battery raw materials nickel, manganese, cobalt, lithium and other valuable metals has continued to rise, especially lithium carbonate, which has risen from more than 50,000 yuan per ton to about 430,000 yuan in one year, an increase of more than 7 times.

For the new energy automobile industry, it is currently generally in a state of loss. The new forces of head car manufacturing, such as Weilai, Ideal, and Xiaopeng, are all in a state of loss, and even Tesla has spent many years to achieve profitability. Cui Dongshu, secretary general of the Association, said in an interview with reporters that most of the new energy vehicle companies are still in a state of loss, and there is still a long way to go for new energy vehicle companies to achieve profitability.

Will the A00-class car market be reshaped?

Small cars are generally less profitable due to lower prices and are more likely to lose money when costs rise. From the perspective of sales scale, the market share of small cars has continued to increase in recent years. The popularity of Wuling Hongguang MINI EV has led to a number of enterprises that develop small electric vehicles. At present, Chery, Changan, Great Wall, Geely and other car companies have launched small electric vehicles. However, foreign car companies such as Volkswagen have not launched small electric vehicles. Volkswagen CEO Feng Sihan said in an interview with reporters that Volkswagen will not develop small electric vehicles. He believes that from the perspective of automobile manufacturers, it is necessary to take into account the requirements of double integration, and fuel models need to have corresponding new energy vehicle products to achieve double integration compliance. It is difficult for some new energy models to make a profit in price, but it can contribute to the double integral, so this level of model has its significance.

With the rapid growth of sales of new energy vehicles, the value of the current points has decreased. Dong Yudong told reporters that last year's point price was 2500 to 3000 yuan / point, and it has now dropped to 500 yuan ~ 800 yuan / minute. The depreciation of points means that new energy vehicle companies can no longer obtain high revenue by selling points, which will bring greater challenges to new energy vehicle companies mainly small cars.

"Euler is basically the most expensive model in the A00-class market, and there are three main models in the A00-class car market, including products below 40,000 yuan, 40,000 to 60,000 yuan and more than 60,000 yuan, but the quality of the products is uneven." Some products on the market are low price, low endurance, low performance and low security. Dong Yudong told reporters that the entire market is chaotic.

"Reducing costs depends on increasing the commonality of the platform and seeking better innovative technologies. The platforming and versatility of euler black cat and white cat parts has reached more than 80%, which is the ultimate, and we do not want to sacrifice performance and safety. Dong Yudong said.

Cui Dongshu, secretary general of the Association, believes that the rising price of battery raw materials has brought greater pressure to small cars, and new energy vehicle companies based on small cars will upgrade their products, and at the same time, they should consider how to reduce costs and coordinate resources.

A research report recently released by Ping An Securities shows that the Wuling Hongguang MINI EV launched in 2020 has greatly increased the market volume of A00. However, from the perspective of growth space, the incremental space of the A00-level market in 2022 is close to the bottleneck.

"At present, the structure of the new energy market is still dumbbell type, and we will develop the waist market in the future." Dong Yudong told reporters that according to the plan, in 2022, Euler ballet cat, Euler punk cat, Euler lightning cat and other products will usher in the market. Among them, the Euler Ballet Cat is positioned as a compact pure electric sedan, while the punk cat is also a compact car. Previously, Euler had announced that the models launched would cover the A00-class to B-class car segments, lay out the electric vehicle market below 250,000 yuan, and shift the focus of the future to the 100,000-200,000 yuan market.