The second half of the reshuffle of the new energy automobile industry will begin, and the automotive industry will most likely usher in a new round of eliminations.
Compared with Wei Xiaoli, which has already gained a foothold in the market, and traditional car companies with strong strength, the second echelon of new car-making forces is still facing huge challenges.
In the past year, the second echelon of Weima is still deeply mired, and Nezha and Zero Run have both taken off in terms of sales, and it is most appropriate to knock on the door of IPO at this time. The listing seems to have also become a struggle of the second echelon of new car-making forces.
On March 17, Zero Run Auto officially submitted a prospectus to the Hong Kong Stock Exchange, becoming the first new car-making force in the second echelon to officially enter the IPO process.
Based on the latest round of financing, the valuation of zero-running cars is about 27.6 billion yuan.
In the prospectus, Zero-Run Automobile defines itself as the only emerging electric vehicle company in China with global independent research and development capabilities, focusing on the mid-to-high-end new energy market of 150,000-300,000 yuan.
Relatively speaking, global self-research has a certain competitive advantage, but it also brings huge cost pressure to zero running.
In the high-end new energy market positioned at 150,000-300,000 yuan, in the face of the dual competitive pressure of Wei Xiaoli and traditional car companies, whether zero running can achieve a breakthrough is not yet known.
Similarly, in the second echelon of new car-making forces, in addition to the high-end high-end positioning, they are facing huge competitive pressure from the market.
At this time, the listing of the IPO, for the second-tier new forces, is it a drink to quench their thirst, or can they really break through against the trend?
Let's take a look at the Zero Run prospectus.
01
Global self-research, pseudo-concept or real input?
Last December, Zero Run threw out the global self-developed concept for the first time.
In this prospectus, global self-research has also become the core competitive advantage of zero running.
Due to the large number of parts involved in the automotive industry, it is almost impossible for car companies to adhere to full-stack independent research and development, often in some key core areas of self-research, so as to have core competitive advantages, such as traditional engines, autonomous driving systems in the era of intelligent cars, etc.
However, in the "self-developed and self-produced core systems and electronic components" territory provided by Zero Run, we can clearly see that except for interior and exterior decorations and batteries, Zero Run has developed almost all the plates itself.
From the platform development of systems and electronic components from the bottom layer to all the core systems and electronic components involved in intelligent electric vehicles, Zero Run has created a complete intelligent power system, automatic driving system and intelligent cockpit system.
In the view of zero running, the global self-development of software and hardware can make the cost more reasonable, the performance more optimized, and the underlying logic between components is also open, which can further optimize the connection between various devices and do better in systematization and platformization.
However, behind the global self-research, it also means high research and development cost investment.
Zhu Jiangming, founder and CEO of Zero-Run Automobile, has said that the cost problem will be shared by the increase in sales volume to share the cost of development and manufacturing. With a real scale advantage in the future, zero running will certainly have a deeper understanding and better cost structure than the leaders in the automotive industry.
In other words, the balance point of the future revenue of zero-running cars will depend on whether sales can evenly share the research and development costs of their adherence to global self-research.
Judging from the current zero-run operation, this balance has not yet been found.
At present, the financial situation of zero-running cars is in a state of continuous loss, the gross profit margin continues to be negative, and the cash flow is not high.
In terms of revenue, the total revenue of Zero Run from 2019 to 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 revenues, with total revenues of 117 million yuan, 616 million yuan and 3.058 billion yuan respectively.
Its operating losses were approximately $731 million, $869.5 million and $2,868 million, respectively. In the three years since the product was launched, Zero Run has accumulated a net loss of 4.7 billion yuan.
At present, the gross profit of zero run is still negative.
The prospectus discloses that the gross profit margin of zero run from 2019 to 2021 is -95.7%, -50.6% and -44.3%, respectively, which means that the company is unlikely to be profitable in the short term.
Compared with Wei Xiaoli, the gross profit margin when the first car is delivered in 2019 is also negative, and by 2020, the gross profit margin has turned positive and increased to 21% in 2021. Similarly, Weilai and Xiaopeng have also turned the gross profit margin positive in 2020.
In terms of cash flow, as of the end of 2021, the cash and cash equivalents on the account of zero-run cars were 4.338 billion yuan, an increase of more than 40 times from 101 million yuan at the end of the previous year, mainly due to large-scale financing activities in the zero-run year.
Zero Run has carried out 8 rounds of financing, with a total financing amount of about 11.5 billion yuan, which is the seventh new car-making enterprise in China to raise more than 10 billion yuan, while Wei Xiaoli has accumulated more than 20 billion yuan in financing, and even Weilai has exceeded 50 billion yuan.
In terms of R&D investment, from 2019 to 2021, the R&D investment of zero-run was 358 million yuan, 289 million yuan and 740 million yuan, accounting for 306.4%, 45.8% and 23.6% of the total revenue, respectively. At present, there are more than 1,000 R&D personnel in zero-run cars, accounting for 33.9% of the company's total workforce.
For comparison, in 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.
In terms of the scale of R & D personnel, by the end of 2021, the staff of Ideal Automobile is 11901 people, of which there are 3400 R & D teams, accounting for about 29%. As for Xiaopeng Motors, as of the end of the third quarter of 2021, the number of R&D teams exceeded 4,000.
It is not difficult to see that zero running itself is not high in hematopoietic ability. The global self-research that Zero Run insists on has not yet been actually translated into economic benefits.
In the whole year of 2021, zero-run sold a total of 43,748 vehicles, of which the mini car T03 sold more than 30,000 units, accounting for more than 90%, while the price range of T03 was below 100,000, which belonged to the model with low volume but relatively low profit.
According to the amount of loss given by zero running, a total loss of 2.8457 billion yuan will be lost in 2021, which translates to a loss of 65,000 yuan for selling a car with zero running.
According to the zero-run prospectus, of the expected net proceeds of the fundraising:
40% will be used for research and development of new models, autonomous driving technology, three-electric system technology, etc.;
25% will be used to increase production capacity;
25% will be used to expand business and increase brand awareness, including overseas businesses such as overseas flagship stores in the European market in 2023;
10% for operational and general corporate use.
The IPO of zero running at this time can be said to be a continuous blood supply for follow-up development, and it is also to strengthen its own global self-research capabilities and enhance competitiveness.
02
From mini cars to mid-to-high-end, is it too late to run zero?
Founded in December 2015, Zero-run Automobile is the first wave of new car manufacturers, and is backed by Dahua Enterprise, a giant in the field of security, which can be said to have certain innate advantages.
However, the zero run is a tough one.
Relevant data show that new energy vehicles in the price range of 150,000-300,000 yuan in 2021 account for 39% of China's total sales of new energy vehicles, and will further increase to 49% in 2026, becoming the main driver of market growth.
In the prospectus, the market positioning of zero run is the mid-to-high-end new energy market of 150,000-300,000 yuan. From the perspective of its product process, Zero Run has positioned the high-end new energy market from the beginning, but it has not gained a firm foothold in the market, and even the response of the previous products in the market is flat.
In 2019, Zero Run released the first model, the coupe S01, priced at a maximum price of 150,000 yuan, but the S01 was not successful, and so far the sales volume has not exceeded 3,000 units.
In September last year, zero-run listed mid-range pure electric SUV zero-run C11, priced at 150,000-200,000 yuan, which is the most expensive model currently on sale for zero-running, three months after the launch, C11 delivered a total of less than 4,000 vehicles. But zero-run said that the total number of orders at the end of last year was 22,536.
The real volume of zero-run models is still the low-end A00 model zero-run T03 listed in May 2020, which is the sales champion among zero-running models. So far, 38,463 vehicles have been delivered.
But this car is only a miniature car, priced between 69,000 and 85,000 yuan, and a certain distance from the zero-run positioning of the high-end new energy market.
In order to continue to exert efforts in the mid-to-high-end market, Zero Run said in the prospectus that it plans to launch 1-3 cars per year, and by the end of 2025, launch 8 new models, covering cars of various sizes, SUVs and MPVs, and plans to launch the first pure electric medium and large sedan C01 in the second quarter of 2022, and start delivery in the third quarter.
At the same time, in order to improve the delivery capacity, the second plant of ZeroCar in Qiantang New District of Hangzhou will also start construction this year and is scheduled to start production in 2023.
In addition, zero-running cars are also stepping up their layout in overseas markets, planning to set up the first overseas flagship store in Europe by 2023 and choose the opportunity to enter other major markets around the world.
The mini car has made the sales of zero run take off, but the performance in the early stage in the high-end market is flat, and whether it can rely on new models to be accepted by the market again in the later stage is the main problem facing zero run.
After all, in the 150,000-300,000 level of the high-end market, including traditional car companies such as GAC and BYD, as well as the second brands including Xiaopeng, Xiaomi, Jidu and even Weilai, are entering this market.
In addition, although Zero Run is positioned as a pure electric vehicle company with global self-development, it has not yet transferred the advantages of independent research and development to the product, making the product more brand attention in the market.
Global self-research, so that zero run has super product strength, proven rapid expansion of product portfolio capabilities, advanced automatic driving and intelligent cockpit technology and other competitive advantages, but zero run itself also said in the prospectus that it currently faces more risks, including:
The limited business history makes it difficult to assess its business and future prospects
The ability to manufacture and deliver high-quality, customer-appealing vehicles on time and at scale has not been proven and is constantly improving
R&D efforts may not yield the expected success
Automotive and intelligent technologies may be flawed and may not perform in line with customer expectations
Competition in China's new energy vehicle market is fierce, and demand for electric vehicles may be cyclical and volatile
Gross and net losses in the past and negative operating cash flow are likely to continue in the future
The resulting revenue relies on a handful of smart electric models
Risks associated with autonomous driving technology
Whether zero running can finally gain a foothold in the high-end market depends on its subsequent development capabilities.
03
Can the second echelon of the new car-making forces counterattack a second time?
Although zero running has knocked on the door of listing IPO, the cost pressure brought about by global self-research and the difficulty of breaking through the high-end new energy market are the key factors affecting whether it can be successfully listed.
Also need to break through to the high-end market, there is also Nezha, who is also a second-tier new force.
Since last year, Nezha has gained momentum all the way, and even surpassed Wei Xiaoli in sales for a time, becoming the first of the new car-making forces. In terms of financing, it has also been favored by big guys such as 360 and Ningde Times, and has been chased.
But the problem with Nezha is that its main sales models are Nezha V and Nezha U, both of which are models below 100,000 yuan, and Nezha V, priced at 60,000-80,000 yuan, accounts for about 70% of total sales, and a large part of sales mainly comes from B-end customers.
Nezha once shouted that he wanted to build a smart car of 100,000-150,000 yuan to build a car for the people, but Nezha's next model, Nezha S, is the main new energy market of 200,000 yuan.
It is not difficult to see that Nezha's next step is also to break through to the high-end market, and whether Nezha S can be recognized by consumers will also have a relatively large impact on Nezha's subsequent development.
Compared with Nezha and Zero Run, which need to be branded upwards, Weima, as the most optimistic new car-making force, has been positioned in the high-end market of 150,000-300,000 yuan from the beginning.
However, due to the "spontaneous combustion door" and "lock electric door" in recent years, there is only one EX5 model that can be played, and under the internal and external troubles, its sales in 2021 will be surpassed by Nezha and Zero Run, ranking 6th among new forces.
Last year, it was revealed that WM was seeking to be listed on the Science and Technology Innovation Board, but the follow-up was terminated, after the news came out that WM would move to Hong Kong stocks for listing IPO. Nezha was also revealed to be going public in Hong Kong.
The new forces of the second echelon of car manufacturing may gather in Hong Kong stocks.
At present, a strong signal in the automotive market is that there will be a decisive battle in 2025, and 2023 is the beginning of this decisive battle.
At this point in time, several second-tier car-making new forces went to Hong Kong to IPO, which is actually a helpless move, after all, car manufacturing requires huge funds. However, the listing of IPO can not solve all problems, the most important thing for car companies is to have their own hematopoietic ability.
Toyota, considered the most profitable in the industry, has a gross margin of 19% in the automotive business, a gross margin of 17.5% in the automotive business of the Volkswagen Group, and a gross margin of around 20% for ultra-luxury cars such as Ferrari and Porsche.
Tesla's gross margin exceeded 30% in Q3 and Q4 in 2021 for two consecutive quarters.
Tesla's secret lies in advocating vertical integration of the industrial chain and taking independent research and development as its core competitiveness. The second is the gradual release of software capabilities, which will also become a strong source of revenue for Tesla in the future. This is also the ability of the new domestic car-making forces to catch up.
For the new forces, the answer to how to build a profitable "Tesla" is self-evident. Of course, this also depends on who can build a more product-effective model that can really impress consumers.
"The Heart of the Car · The connoisseur said" trailer
On Tuesday, March 29, 20:00-21:00, Jin Yutao, vice president of Zhixing and head of the intelligent hardware center, will be the heart of the guest car · Experts said, talk about "the chassis product force behind the large-scale mass production of unmanned delivery vehicles".