Produced by | Tiger sniff car group
Author | Wang Xiaoyu
Header image | Zero-run car official micro
"We don't play with concepts, we don't tell stories".
This is the tone set by Zhu Jiangming, the founder and chairman of Zero Run Car, in the first two years. With the passage of time and the new forces that do not tell stories, not only consumers look down on you, but the capital market is also very ugly to see you.
On March 17, Zhejiang Zero Running Technology Co., Ltd. submitted a listing application to the Hong Kong Stock Exchange. This time is different, Zhu Jiangming created a new word, and wrote a new story - global self-research.
In the prospectus, Zero Run mentioned the new term "global self-research" 15 times. Expanding on, zero-run is explained as follows: "We have developed and self-made intelligent electric vehicle core systems and electronic components of all the key hardware and software, to achieve the unification of the underlying interface, algorithm and data communication protocol, this unique model and capability to build, can be highly reused between different electric vehicle models platform electrical and electrical architecture and vehicle architecture." ”
However, the price of global self-development is that for every car sold last year, the net loss reached 65,000 yuan. This is undoubtedly a loss-making transaction for a new brand whose current products are mainly priced at 50,000-200,000 yuan.
Remember that in July last year, Zhu Jiangming revealed when announcing the company's zero-run 2.0 strategy that the company's future goals include "surpassing Tesla in three years with self-driving technology" and "reaching 800,000 vehicles in 2025". Today, standing in front of the Hong Kong Stock Exchange, zero running needs to recognize their true location, and the "global self-research" will be more risky in the future.
First, the more you sell, the more you lose
"In 2015, I was traveling in Spain and saw a lot of Twizy Renault electric cars on the street, and I realized that China has such a big market, why doesn't anyone do it?" That year, Zhu Jiangming's identity was still one of the founders of security giant Dahua Shares. It is said that after deciding to build a car, Zhu Jiangming and the big guys had the opportunity to play golf, and got the guidance of a high person to let him build a sports car first.
Sure enough, in July 2019, Zero-Run cars began delivering the first volume model, the S01. At that time, the product positioning set by Zero Run was "intelligent pure electric coupe", but whether from the perspective of appearance or size, it was more like an "old scooter". In 2020, the S01 sold only 1125 units.
Immediately after, Zero Run launched two more products, the mini car T03 and the medium-sizeDUV C11. In the face of unfavorable teachers, Zero Run has climbed to a sales level of 11,391 units in 2020 with the help of the heat of the mini car market. Among them, the T03, priced at 68,900 yuan, accounted for 10,266 vehicles. In the subsequent 2021, the zero-running C11 also gradually increased its volume, and together with the T03 contributed 43,748 deliveries to the zero-run.
The more than 40,000 vehicles in 2021 are all "smashed" with zero running and money.
According to the prospectus of Zero Run Automobile, the company's operating losses in 2019, 2020 and 2021 were about 731 million yuan, 869.5 million yuan and 2.868 billion yuan respectively; the company's equity holders attributable to the year's losses were 901 million yuan, 1.1 billion yuan and 2.8457 billion yuan, respectively. From the perspective of the three years since the launch of the product, zero running has accumulated a net loss of about 4.7 billion yuan.
However, the amount of this loss is relatively small compared with Weilai and Xiaopeng. According to NIO's HKEx documents, in 2019, 2020 and the first three quarters of 2021, NIO's net losses were 11.296 billion, 5.3 billion and 1.874 billion yuan, respectively. Xiaopeng Automobile is slightly better, according to Xiaopeng's 2021 third quarter financial report, the company's net profit was -1.595 billion yuan, while the third quarter car delivery volume was 25,666 units, equivalent to every car sold, Xiaopeng Automobile lost about 62,000 yuan.
But then a problem arises. The product focuses on zero running at a price of 50,000-200,000, and Xiaopeng, whose product focuses on 150,000-300,000, has lost the same level of money. Zero lost $2,845.7 million and sold 43,748 vehicles. In other words, for every car sold in the zero run year, the net loss reached 65,000 yuan - quite close to Xiaopeng's loss of 62,000 yuan.
In theory, the low-end market as we understand it is a profitable business, while the high-end market is fiercely competitive, and the profit margin is certainly not as good as the high-end car market of more than 300,000. However, in terms of bicycle losses, the zero run of the main low-end market is more profitable than xiaopeng in the mid-to-high-end market, which is unexpected. After analysis, we found that the main reason is that zero running has smashed the money earned from selling cars into research and development, which makes the family that is not rich in the first place worse.
According to the prospectus of Zero Run, the company's total revenue in 2019, 2020 and 2021 was about 117 million yuan, 631 million yuan and 3.132 billion yuan respectively. Among them, the sales of automobiles and components were the main revenue. Total sales revenue of automobiles and components in 2019, 2020 and 2021 was RMB117 million, RMB616 million and RMB3.058 billion, respectively.
In the past three years, the R&D expenditure of Zero Run was MOP358 million, MOP289 million and MOP740 million, accounting for 306.4%, 45.8% and 23.6% of the total revenue respectively. For comparison, in the whole year of 2020, Xiaopeng Automobile's R&D accounted for 29.5% of total revenue, WEILAI was 15.3%, and the ideal was 11%. In 2021, ideal R&D will account for 12% of total revenue. (Xiaopeng and Weilai have not yet released their 2021 financial reports)
However, it is regrettable that the concept of "global self-research" proposed by Zero Run has not yet been directly transformed into market competitiveness at this stage. Judging from the ranking of its enterprises and product sales given in the financial report, zero run can only "barely" squeeze into the top five.
For example, in the "Industry Overview", Zero Run lists the sales volume ranking of the world's top five pure electric vehicle companies, and Zero Run ranks fifth. From the final words of this list, it can be seen that BYD, BMW, Ideal Car and other brands with plug-in hybrid models have been directly eliminated. In the end, only Tesla, Weilai, Xiaopeng and other pure electric vehicle brands with a single product structure are left.
For example, in terms of model sales, Zero Run did not choose the sales caliber of the association, but chose the so-called "sales to C-end customers" sales data. In a sense, brands such as BYD and GAC New Energy are also excluded.
Selling cars, zero running is really not very good at it now, but when it comes to self-development, zero running can be more real with you.
Second, self-research, is it a bottomless pit?
For zero running, the biggest demand for this IPO is: take more money and do more self-research.
According to Zero Company, 40% of the net proceeds are expected to be used for research and development of new models, autonomous driving technology, and three-electric system technology; 25% will be used to increase production capacity; 25% will be used to expand business and enhance brand awareness, including overseas businesses such as opening overseas flagship stores in the European market in 2023; and 10% will be used for operation and general corporate purposes.
Although the amount of fundraising has not yet been announced, it is not difficult to see from the proportion that the "global self-research" built by zero running needs money. It is undeniable that Zero is running on the road of self-research and has already run ahead of many new forces. What we have to do now is to continue to invest.
In a map of "self-developed and self-made core systems and electronic components" provided by Zero Run, it can be found that except for interior and exterior decoration and batteries, Zero Run has adopted a large number of self-research in almost all sectors. These include motors, reducers, and even the headlight system is self-developed.
Zero run divides the value of self-research into three parts: 1, leapfrog products; 2, research and development efficiency; 3, cost advantages. In fact, this has also constituted the entire business model of zero running: through a large amount of investment in funds and resources to do research and development, and then launch a cost-effective product with a cross-level configuration. And constantly innovate to achieve scale effects. Finally, find a good balance between revenue and R&D investment.
But the problem with self-development is: First, can your self-developed technology provide a better experience than that of mature suppliers? Second, can the cost and risk pressure of self-research be carried down by yourself?
First of all, in terms of experience, zero running does not show how brilliant an intelligent experience is at present.
Like the current zero-run C11, it only provides self-developed ACC (adaptive endurance) and LCC (lane centering assistance) functions. In contrast, "Wei Xiaoli" has launched a self-developed navigation assistance driving function, and zero running has not been able to achieve this function for the time being.
"Although the zero-run intelligent driving is hardware + software self-developed, the overall is very stable, but the details feel a little worse." Liu Zehu, an analyst of new energy vehicles, told Tiger Sniff that in the actual driving experience of intelligent driving functions, the zero-run C11 is temporarily inferior to the Solution1 supplier of the same price model Pentium T99. But he felt it was a good thing," explaining how the bottom knows how they were engaged in themselves. ”
And the experience is not coming, it is likely to be stuck in the research and development of talents. According to the financial report, zero-run cars currently have more than 1,000 R&D personnel, accounting for 33.9% of the company's total employees. For reference, by the end of 2021, ideal auto has an employee size of 11,901 people, of which 3,400 are in the R&D team, accounting for about 29%. As for Xiaopeng Automobile, as of the end of the third quarter of 2021, the number of R & D team exceeded 4,000 people.
However, there are some differences between zero running and Xiaopeng and the ideal self-research system. The strategy of zero-run is to cover the scope of self-research enough at the beginning, and then go deeper one by one. Instead of like other new car-making forces, eat a subdivision technology thoroughly, and then expand to more fields.
But it's also a risk, to make an analogy: one student, the door exam is 75 points; the other student, math is a full score each time, but other tests only have 60 points, and even fail. That is obviously the latter such a specialty, it will be easier to remember.
In terms of cost, the biggest challenge facing zero running is the price fluctuations in the upstream supply chain.
On March 19, Zero Run Auto announced: Affected by the rise in raw material prices, Zero Run C11 announced a price increase, an increase of 20,000-30,000 yuan. The price adjustment range of zero running is one of the larger increases in domestic new energy vehicle companies such as BYD, Euler, and Xiaopeng, which once caught up with Tesla's price increase rhythm.
This is not related to the "global self-research" of zero running. Like Zero Run, all current battery systems are self-developed and cover the entire process from design, simulation to product testing. In addition to the fact that the battery cells are purchased, the manufacture and combination of the entire battery pack is zero run to do it yourself. Including the electric drive, zero-run S01 and T03, their self-developed electric drive system Heracles integrates the motor, reducer and motor controller, and later launched the "Pangu" oil-cooled electric drive, mounted on the zero-run C11.
In short, in many other new forces rely on suppliers to purchase key components, Zero Run has done a lot of self-research. The advantage of this is that the cost of the entire procurement is reduced, and the efficiency of research and development is also improved. However, the cost of research and development is higher, and the cost pressure of the upstream supply chain is directly reflected in the cost of your research and development and manufacturing.
In addition to the fluctuation of costs, the replacement of technology also requires self-research parties to bear the pressure. Zero Run now has an annual output of 200,000 battery packs and 250,000 drive motors at its own Jinhua plant in Zhejiang Province. According to the information in the prospectus, Zero Run is developing a high-performance, 800-volt electric drive system with silicon carbide materials, which means that the factory production line also needs to be adjusted accordingly.
All in all, the "global self-research" proposed by Zero Run must be an invincible hole that burns money. But compared with many car companies to burn money in the field of marketing and services, such a new force as zero running is a difficult, and correct path.
Write at the end
The advantages brought by self-research to car companies are inevitable, but the risks and challenges are also inevitable.
For Zhu Jiangming, what he does not lack most is his patience for entrepreneurship. He once said: "Building a car is like a long-distance run, the process must be very long, I hope that one day zero run can have tens of millions of sales like Toyota and Volkswagen." ”
Now, it's nothing more than a drawback to money.