On March 10, NIO Motor (9866. HK) is listed in Hong Kong with a closing price of HK$158.9. On February 28, 2022, NIO announced after the hearing of the Hong Kong Stock Exchange that it will be listed for the second time in the form of an introduction. Now, "Wei Xiaoli" has finally gathered at the Hong Kong Stock Exchange.
From "Wei Xiaoli" to the current "Xiaoli Wei", the new energy vehicle market is changing. At the beginning of 2022, Weilai's delivery volume was significantly behind, inferior to Nezha, which was once divided into the second echelon.
The company explained that it is still affected by the supply chain, but why are other new forces not so seriously affected by the supply chain, while Weilai's sales performance is obviously lagging behind?
Unveiling the fig leaf of the supply chain, WEILAI is also facing problems such as vehicle quality and safety, and high marketing costs. On March 10, the closing price of the first day of Weilai's listing was slightly lower than the opening price, reflecting the tangled mood of the market.
Can the Hong Kong stock listing help Weilai return to the top?
Supply chain dilemmas
In 2021, the monthly delivery volume of WEILAI Automobile fluctuated greatly, which can be described as riding a roller coaster after roller coaster. Among them, the delivery volume in February, August and October 2021 suddenly fell sharply, with only 5578, 9455 and 3667 deliveries, down 23%, 26% and 65% respectively.
On the contrary, Nezha's performance class teacher said that the delivery volume has been growing steadily. In January this year, Nezha delivered 11,009 vehicles, surpassing WEILAI for the first time, an increase of 402% year-on-year.
NIO's deliveries have continued to decline since November 2021, and this downward trend has not improved until 2022. Although the delivery volume of the new car-making forces in February was low due to the suspension of work during the Spring Festival, only Weilai was in a state of decline in delivery for several consecutive months.
However, compared with the first two months of 2021 and the first two months of 2022, the cumulative delivery volume of "Wei Xiaoli" has increased year-on-year. In the first two months of 2022, WEIO delivered a total of 15,783 vehicles, only achieving a year-on-year increase of 23.28%; Xiaopeng and Ideal delivered 19,147 vehicles and 20,682 vehicles respectively, an increase of 132.42% and 169.33% year-on-year, respectively.
Why did NIO's auto deliveries begin to decline?
Weilai explained that due to the continuous shortage of semiconductors around the world, on March 29, 2021, the Jianghuai foundry stopped automobile production for 5 working days. Affected by the supply chain, the soaring price of chips has led to a sharp increase in various costs, further affecting delivery and profits.
Of course, other new energy vehicle companies and traditional car companies are also facing the problem of "lack of core and less electricity". Xiaopeng, Ideal and Tesla have all carried out reduced allocation deliveries because of lack of cores. Xiaopeng and Ideal have successively launched a delivery plan for the owner to first mention the "reduced version" radar model and then complete it later.
Tesla's latest financial report for 2021 also mentioned the impact of the supply chain countless times, its Shanghai gigafactory in addition to manufacturing cars will be fully prepared to produce lithium battery cells, while Tesla has also been exposed to the problem of secretly reducing allocation.
What is the state of the supply chain? Why is it that in the face of global lack of cores and other problems, the sales of other new energy vehicle companies have not been greatly affected, while the decline in sales of Weilai has been outstanding? "Car Circle Visibility" sorted out some of the supply chain layout of Weilai.
Taking one of these components as an example, almost all electronic devices today are inseparable from ADAS sensors, and the sensors are closely related to the microcontroller MCU chips, which are also the protagonists of this chip shortage. The market has been dominated by more than 90% of overseas suppliers such as NXP, Infineon and Renesas Electronics.
Previously, the chips of the new forces car companies almost came from Infineon, but after the outbreak of the epidemic, they all fled the control of Infineon and actively sought other MCU chip suppliers.
Weilai was replaced by Bosch, and the ideal decided to support itself. Tesla has also quickly turned to new suppliers, not only that, its electrical and hardware teams have designed, developed and verified nearly 19 MCU chips, enabling them to adopt new micro-control chips in a very short period of time, avoiding the risk of grabbing goods with other car companies.
One of the reasons for THE unstable delivery of NIO is its over-reliance on Bosch's single chip supply. Last year's explosion of Volkswagen's "lack of core" incident is that Bosch and mainland China two MCU and ESP control chips are undersupplied, in 2021 Bosch product order satisfaction rate of only 30%. The products and degrees affected by each car company and each factory are different.
The same is the lack of core, and not all companies are unable to fight back. Toyota Motor's automobile production in the third quarter of 2021 shrank by 16%, but the net profit in the first three quarters of 2021 reached 128.353 billion yuan, an increase of 38.26% year-on-year. In response to supply chain strains, Toyota has targeted the storage of parts and cut marketing expenses by vigorously suppressing marketing activities.
Coincidentally, in 2021, Tesla can achieve car sales revenue of 278.922 billion yuan, an increase of 79% year-on-year, in addition to the rapid completion of the Shanghai gigafactory capacity increase, 90% of the supply chain localization has also helped a lot.
Obviously, the blow of chip shortage is not indiscriminate, and whether car companies can effectively control costs and efficient supply chain transfer is the key. Nio is still using foundries, and it lacks control over the supply chain.
Sustained losses
According to the prospectus, from 2018 to September 2021, NIO's total revenue recorded 4.951 billion yuan, 7.825 billion yuan, 16.258 billion yuan and 26.236 billion yuan, respectively, and from 2019 to September 2021, it increased by 58.04%, 107.77% and 172.81% respectively.
Among them, NIO's total revenue mainly comes from automobile sales and other sales components. According to the prospectus, from 2018 to September 2021, NIO's sales revenue recorded 4.852 billion yuan, 7.367 billion yuan, 15.182 billion yuan and 23.954 billion yuan, respectively, an increase of 51.83%, 106.08% and 91.3% year-on-year since 2019.
The majority of the car sales revenue mainly comes from the sale of ES8, ES6 and EC6 models, while other sales include the sale of new energy vehicle credits, battery upgrade services, charging piles and auto parts.
As of September 2021, NIO's sales and other sales were 23.954 billion yuan and 2.281 billion yuan, respectively, an increase of 165.91% and 274.99% year-on-year, accounting for 91.3% and 8.7% of the total revenue, respectively.
From 2018 to September 2021, the gross profit margin of NIO's sales was -1.6%, -9.9%, 12.7 and 19.7%, respectively. Among them, the negative gross profit margin in 2018 and 2019 is due to the higher manufacturing cost of automobiles in the early stage of mass production, and the gradual positive gross profit after 2020 is also due to the reduction of unit material costs and the higher average selling price caused by the increase in production capacity of JIANGHUAI Weilai foundry.
From 2018 to September 2021, the gross profit margin of OTHER SALES of WEILAI was -180.6%, -102.6%, -5% and 17.2%, respectively. Among them, the decline in gross profit from 2018 to 2019 was mainly due to the fact that in June 2019, the company recalled 4,803 NIO ES8s due to a series of three ES8 spontaneous combustion incidents caused by batteries equipped with faulty modules, resulting in a loss of 339.1 million yuan.
In addition, from 2018 to September 2021, NIO's operating losses reached 9.596 billion yuan, 11.08 billion yuan, 4.608 billion yuan and 2.051 billion yuan, respectively, and the net loss reached 9.639 billion yuan, 11.296 billion yuan, 5.304 billion yuan and 1.87 billion yuan.
From 2018 to September 2021, 11,348 vehicles, 20,565 vehicles, 43,728 vehicles and 91,429 vehicles were delivered. "Car Circle Visibility" roughly calculated, basically Weilai lost 30,000 yuan for every car sold.
On the one hand, NIO's research and development costs continue to rise. Judging from the data in 2020, although Weilai's investment in research and development has exceeded "Xiao Li", it is still far from Tesla.
On the other hand, Weilai's sales expenses are also higher than "Xiao Li". Why are sales expenses higher than those of these two car companies?
Among them, one of the major reasons for sales expenses is the expansion of NIO Center and NIO space station, resulting in rental expenses, which increased by 63.9% in 2018 alone. As of September 2021, NIO has deployed 37 NIO centers and 321 NIO spaces in 137 cities across the country. In addition, the increase in sales and service personnel, the increase in sales service network and the increase in marketing activities are caused.
In addition, Weilai's very distinctive community-based sales model, marketing service costs are also very high, and let Weilai be crowned with the hat of 'Weilai teaching', 'MLM-style car sales', and 'first charging members and then buying cars'.
Accidents are frequent
In the history of WEILAI, vehicle quality and safety problems have been frequently produced, which has also made Weilai controversial.
In the NOP automatic driving function, Weilai has had several serious safety accidents.
For example, on August 12, 2021, Lin Wenqin, the founder of Meiyihao brand management, was only 31 years old, driving the NIO ES8 and turning on the NOP automatic driving mode, he died in a traffic accident on the highway. As soon as this matter came out, it set off an uproar in society.
This has once again sparked controversy over 'all-electric' and 'autonomous' automotive technologies. Although afterwards Weilai officially shouted: NOP is not automatic driving, just assisted driving. But it's also hard not to re-examine the overmarketing of autopilot functions by car companies.
There are 5 levels of full automatic driving, and the automatic driving function of all car companies on the market is only at the L2 level, in fact, only partial automatic driving can be achieved. Simply put, L2-level autonomous driving can accelerate, slow down, and steer, but requires the driver to keep focused, pay attention to the road conditions, and be ready to take over the vehicle at any time.
On the introduction page of NIO ES8, NIO Pilot is introduced, "developed by NIO, equipped with the world's leading Mobileye EyeQ4 autonomous driving chip.". Whether it is introducing NIO Pilot, Pilot NOP or chip, Weilai has a big keyword of "automatic", but it is only a very small font to remind drivers to hold the steering wheel the whole time.
In terms of battery problems, WEILAI has also had serious safety accidents and carried out vehicle recalls. On July 30 last year, a WEILAI EC6 in Shanghai's Pudong New Area caught fire after hitting a stone pier on the highway, and the driver failed to get out in time and unfortunately died. However, this accident Weilai said that the preliminary judgment of the scene is basically intact.
In fact, the case of spontaneous combustion of Weilai models is not uncommon, during 2019, Weilai Automobile has frequently had several spontaneous combustion incidents of vehicles, so that Weilai has recalled 4803 ES8 models to the State Administration of Market Supervision, on the grounds that there are safety hazards in the battery module of ES8, this recall is almost half of the delivery volume of Weilai in the next year, and it is also the first recall of China's new car-making brand.
The recall also led to serious losses for WEILAI. In The financial report of Weilai stated that "in June 2019, due to the battery equipped with a faulty module, the company recalled 4803 NIO ES8s, with a loss of 339.1 million yuan" as stated in the financial report.
In the short term, Weilai has produced some losses, but what is more serious is that the long-term killing force on the Weilai brand is extremely large, and Weilai at that time hovered for a long time in the trough period.
With more and more forces entering the new energy car manufacturing, 2022 will be the year of survival of the fittest for new energy vehicle companies. The comprehensive decline of government subsidies, tight supply chains and frequent vehicle problems have made car companies have to make every effort to control costs, increase sales, strengthen supply chain control and pay more attention to vehicle quality issues.
And these problems are what Weilai needs to solve at present, in the face of the fierce pursuit of the new recruits in the back wave, can the Hong Kong stock listing add a fire to Weilai?
Author | Pan Hong
Edit | Wan Jiali
Source | CarVisibility
END