Sales "fall behind", betting pressure, Weilai ushered in a new crisis?

Produced by Radar Finance and | Li Yihui, ed. | Deep Sea

The crisis of Weilai never seems to have really gone away.

Recently, the February sales released by the new car-making forces showed that in the case of doubling the year-on-year doubling of ideals, Xiaopeng, Nezha and zero running, Weilai only achieved a year-on-year growth of 9.9%. Not only did the growth rate shrink further than in January, but the sales volume also fell into the top three of the new forces in February, and was surpassed by the "second echelon" of Nezha for two consecutive months.

Declining sales means losing market share, but WEILAI is quite dismissive of this. Last month, when asked by the media about this year's sales target, Qin Lihong, co-founder and president of Weilai, said: "I said that this year's delivery target is not counted, the supply chain is decided, and how much production is paid." ”

The industry believes that at the moment when the competition for new energy vehicles is fierce, monthly sales data has become a report card for new forces to display. Qin Lihong's statement of "how much to produce and how much to pay" more or less exposes a little bit of Weilai's helplessness to be constrained by the supply chain.

In addition to the soft underbelly of the supply chain, WEILAI's secondary listing in Hong Kong has also attracted attention. Although the listing method is to introduce the listing, does not involve the issuance of new shares and fund raising, showing that Weilai is "not bad money", but the high performance betting and repurchase clause attached to a 7 billion yuan strategic financing 2 years ago still made the outside world pinch Li Bin.

What happened to Weilai?

Sales are "left behind" again

In the sales competition of the new car-making forces, Weilai is gradually in the ascendant.

According to February data, NIO delivered 6,131 vehicles in the month, an increase of 9.9% year-on-year and a decrease of 36.47% month-on-month. In comparison, Ideal, Nezha, Xiaopeng and Zero Run delivered 8414 vehicles, 7117 vehicles, 6225 vehicles and 3432 vehicles respectively, of which Zero Run increased by 446.97% year-on-year, and Ideal, Nezha and Xiaopeng all increased by more than 180% year-on-year.

In the original "Wei Xiaoli" pattern, Weilai not only lagged behind Xiaopeng and the ideal, but also was continuously surpassed by Nezha, falling out of the top three sales in February.

In fact, since July last year, NIO's delivery volume has been unstable. According to the data, in July last year, Niolai's sales were overtaken by Xiaopeng and Ideal for the first time; in October of that year, Niolai only delivered 3667 vehicles because of the transformation of the production line; in November, the sales performance rose to 10878 vehicles, but in December it slipped again, falling to 10489 vehicles.

Entering 2022, WEILAI delivered 9,652 new cars in January, falling below the 10,000 mark again, and sales fell for four consecutive months.

Sales gradually slipped, the growth rate was an order of magnitude worse than other new forces, what happened to Weilai?

First of all, there are weaknesses at the supply chain end of Weilai. Public information shows that Weilai has had a production capacity crisis since last year, and the delivery of many models has to be postponed, and some car owners even have to wait for 10 weeks after locking orders.

In March last year, Li Bin, chairman of WEILAI Automobile, said at the 2020 fourth quarter financial report and annual financial performance conference of WEILAI Automobile that during the Spring Festival, jianghuai Weilai factory already had the ability to produce 10,000 electric vehicles per month, but it was limited by the production capacity of supply chain partners such as chips and batteries, and the factory could only maintain a full supply chain capacity of 7500 vehicles per month.

In August last year, NIO delivered a total of 5,880 vehicles, down 2,051 units from 7,931 vehicles in July, down a quarter from the previous month.

Nio said at the time that the impact of the epidemic in Malaysia, Nanjing, China and other places in August led to restrictions on the supply of individual parts of NIO. Among them, the ES6/EC6 A/B column interior panel single supplier Nanjo Quanxing plant was suspended for a period of time; the epidemic in Malaysia affected the chip production of ST, and ST is the supplier of Bosch ESP, which also directly affected Bosch's supply of NIO ESP chips.

But the ideal ONE deliveries, which also use ESP chips, not only did not decline, but also delivered 9,433 units in August, up 248% year-on-year and 9.8% month-on-month.

In this regard, some insiders pointed out that on the one hand, only one model of the ideal parts reserve is more sufficient, on the other hand, the sales of the ideal ONE is much higher than the ES6/EC6 two models, in the state of stock shortage, suppliers are more willing to give priority to the supply of models with guaranteed delivery.

Faced with supply chain bottlenecks, Ideal and Xiaopeng actively seek solutions. In addition to launching various reduction delivery solutions, the ideal one was redesigned to introduce horizons, expand chip suppliers, and reduce dependence on Bosch. At the same time, it is reported that Xiaopeng G9 plans to introduce Sunwoda to ensure battery supply.

For the passive situation, Weilai does not make many moves. When asked about the 2022 sales target, Weilai co-founder Qin Lihong said, "The supply of spare parts will still be the ceiling of WEILAI's delivery. This year's delivery target I said not to count, the supply chain to decide, how much to pay. ”

Secondly, Weilai's high-end positioning and ultimate user service have also been questioned. Nio's three models on sale, ES8, ES6 and EC6, are priced in line with the "BBA". According to Chejia data, in mid-2021, the average price of Weilai Automobile was 433,000 yuan, which is second only to Mercedes-Benz and higher than BMW and Audi.

Zhang Xiang, an analyst in the automotive industry, told Radar Finance that Weilai's main luxury cars belong to the top of the pyramid, and the corresponding market capacity is limited, "Weilai has now developed this potential user of it."

In addition, Zhang Xiang believes that in the high-end segment, some new entrants such as Ideal One, BYD Tang and Xiaopeng P7 compete with Weilai in the market range of about 400,000 yuan. Originally, there was only one brand in this price range, but now there are more brands, and the competition has intensified relative to robbing Weilai's customers.

"If Weilai wants to break the game, it must launch about 200,000 mid-range models or low-end models as soon as possible, because the capacity of the low-end market is larger, like Mercedes-Benz and BMW, and now more than 100,000 can also buy Mercedes-Benz and BMW." Zhang Xiang pointed out that Weilai's product structure needs to be adjusted, which is the deep-seated reason for its (poor sales).

Finally, there is also the view that the imminent launch of NIO's new models may lead to sales diversion. As the first product of THE NIO NT2.0 platform, the flagship sedan ET7 will start delivery on March 28, which may divert users who originally wanted to buy THEO ES8 and ES6.

The goal of betting is difficult to achieve

In addition to the decline in sales, Weilai's secondary listing has also attracted much attention.

On 28 February, NIO announced that it had passed the hearing of the Hong Kong Stock Exchange and obtained the approval in principle for the secondary listing on the main board of the Hong Kong Stock Exchange, and had issued relevant listing documents, which it planned to start listing on 10 March 2022.

It is worth noting that NIO is listed on Hong Kong stocks in the form of introducing listings this time, and does not involve new share issuance and fund raising. This method is only that the shareholders of the enterprise apply for the listing and trading of their own old shares, and do not involve financing.

In 2018, NIO successfully landed in the U.S. stock market, its initial public offering price was $6.26, raising $1 billion. As of March 7, NIO's U.S. stock price was $18.63, with a total market capitalization of $31 billion.

Xiaopeng and Ideal, which are also listed in the United States, have taken the lead in returning to Hong Kong in July and August last year in the form of dual listing. Among them, Xiaopeng raised about HK$14.025 billion in Hong Kong stocks, and the ideal amount is HK$11.8 billion.

Weilai said that the company currently has nearly 60 billion yuan of sufficient cash reserves, and there is no urgent financing need in the short term. The secondary listing is mainly to provide investors with more trading locations and more flexible trading hours; at the same time, the listing of the two places will help introduce more investors and be beneficial to the long-term development of the company.

According to public information, as of September 30, 2021, NIO's cash reserves totaled about 47 billion yuan, and in November of the same year, NIO completed about 12.7 billion yuan of additional U.S. stock ATMs.

However, many industry insiders pointed out that the secondary listing can still increase WEILAI's financing channels, and this financing window will open 6 months after the introduction of the Listing on the Hong Kong Stock Exchange.

As for why NIO has adopted the rare method of introducing listings, analysts believe that it is related to the user trust fund it has set up.

In March 2021, WEILAI submitted a secondary listing application in Hong Kong through a "secret way", which was earlier than Xiaopeng Motors. In September 2021, NIO received inquiries from the Hong Kong Stock Exchange about its structure, including the user trust established by NIO in 2019.

According to a number of media reports, in January 2019, Weilai founder Li Bin took out one-third of his holdings, that is, 50 million shares of Weilai shares, to establish the Weilai User Trust. Li Bin gave the right to dispose of the proceeds of the trust fund to Weilai users and reserved the voting rights himself.

In August 2021, 31-year-old entrepreneur Lin Wenqin died in a car accident due to the use of NIO's automatic driving, and public opinion questioned the existence of inducing publicity about NIO's automatic driving function, so the trust fund first appeared in front of the public.

Wall Street Insight quoted a Hong Kong capital market source as saying, "User trust holdings, whether to sell when to sell how much, what impact it has on Li Bin's voting rights, these issues the Hong Kong Stock Exchange believes must be sorted out."

In the eyes of the outside world, it is precisely because of this user trust fund that Weilai Automobile's first impact on the Hong Kong Stock Exchange plan is stranded. Cao He, president of Allianz Auto Investment Management (Beijing) Co., Ltd., speculated that at present, WEILAI is listed in an introductory manner, and the user trust issue may still be on hold.

And NIO's obsession with listing on the Hong Kong Stock Exchange may be related to the VAM agreement that NIO signed with Hefei before.

In 2019, Li Bin ran into walls everywhere for WEILAI financing and was named "the most miserable person in 2019". At that time, the Hefei municipal government reached out to provide 7 billion yuan of financing for WEILAI and signed a VAM agreement: revenue of 14.8 billion yuan in 2020 (3 models listed), 120 billion yuan in 2024 (6-8 models listed), total revenue of 420 billion yuan from 2020 to 2025, total tax revenue of 7.8 billion yuan, and listing on the Science and Technology Innovation Board by 2025.

The Hefei municipal government had posted the information on Weibo, but the original Weibo had now been deleted. According to the screenshot of the network, NIO mentioned in the relevant documents previously released that strategic investors have the right to require NIO to repurchase shares under specific circumstances, and the redemption price is the total investment of strategic investors and the interest is calculated at an annual interest rate of 8.5%.

According to the financial report, in 2020, WEILAI's revenue is 16.3 billion yuan, completing the revenue target; in the first three quarters of 2021, Weilai achieved revenue of 26.2 billion yuan, and it is expected that the annual revenue will be about 35 billion.

If according to the above agreement, THE CUMULATIVE REVENUE OF WEILAI IN 2022-2025 NEEDS TO REACH ABOUT 368.7 BILLION YUAN, OF WHICH 120 BILLION YUAN IN 2024. Compared with the current revenue of more than 30 billion yuan, which has quadrupled in three years, Weilai's goal is not easy to achieve.

According to the listing information released by the Hong Kong Stock Exchange, in 2018, 2019 and 2020, NIO generated net losses of RMB9.639 billion, RMB11.296 billion and RMB5.304 billion respectively. As of September 30, 2021, the Company had a net loss of $1,874 million.

Behind the continuous losses, NIO's user service policy is bringing huge financial pressure to it. In the first three quarters of 2021, NIO's marketing, sales and management expenses have reached 4.5 billion yuan. In comparison, the ideal marketing, sales and management expenses for the whole year of 2020 were 1.119 billion yuan, and Xiaopeng was 2.921 billion yuan.

According to the Observer Network, Weilai insiders revealed that Li Bin will send red envelopes in various car friend groups at 5 p.m. every day, and for 365 days, he will not move, "Sometimes the meeting will stop halfway through, and then start to manually send red envelopes." ”

In contrast, relying on lower operational management and organizational consumption costs, Ideal has achieved phased profitability in the fourth quarter of 2021.

Can new cars reverse the downturn?

Faced with sales and financial pressures, WEILAI urgently needs new models to "save the field".

According to the plan, NIO's new car ET7 will be delivered in March, while the ET5 will also be officially delivered in September. In addition, the new ES7 will also be officially released this year.

Compared with the three models on sale in WEIRA, the two new cars are built based on the NIO NT2.0 technology platform, and the software and hardware have been greatly upgraded.

Like the previous Nio models, ET7 also offers a battery rental solution, and the starting price of the BaaS plan before subsidies is 378,000 yuan. The ET5, which has opened pre-sale, is priced as low as 258,000 after using the battery rental scheme, which is also the first time that Weilai has touched the price range of 250,000.

The ET5 is seen as a model that implements NIO's volume strategy, and it is reported that the pre-sale has exceeded 100,000 vehicles. In Li Bin's view, there are two real opponents of ET5, BMW III series and Tesla Model 3, of which the latter is the most direct competitor of ET5.

According to cleantechnica statistics, by the end of the second quarter of 2021, the global delivery of the Model 3 reached 1.0316 million units, becoming the best-selling electric vehicle to date.

Like many new energy vehicle companies, model 3 also encountered capacity problems when launched, Tesla founder Musk had to sleep in the factory, and finally passed the "capacity hell" pass, the current overall sales, maintenance, accessories and surrounding configuration has been quite mature.

Some analysts believe that in the current situation of supply chain crisis, Weilai wants to complete a large number of orders for ET5, and its supply chain management and production capacity are facing great tests. Judging from the current sluggish delivery volume, Weilai seems to have not yet come out of the "capacity crisis".

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