"2021 is a year to re-accumulate energy," Li Bin described the 2021 year in Weilai's 2021Q4 and annual earnings call on March 25.
Indeed, the past year may have been a more complicated time for Weilai. Compared with the sales results announced in real time every month, whether Weilai has really "accumulated energy" as Described by Li Bin in the past year, and when will it usher in a new "outbreak", may be a topic that we are more concerned about the financial report.
How far is WEILAI from profitability? 2024?
For the past 2021, Weilai's book figures can be described in one sentence: "Ride a bicycle to the bar, the province, the flower".
NIO delivered 25,000 vehicles in the fourth quarter, up 44% year-on-year and 2.4% sequentially. Although sales in the final months were affected by various factors and the growth trend slowed, NIO still achieved more than 91,000 vehicle deliveries for the whole year, with sales up 109.1% year-on-year. This increase is also basically the same as the level of doubling the domestic new energy market last year.
Under the growth of sales, NIO's revenue in 2021Q4 reached 9.9 billion, the annual revenue reached 36.1364 billion, and the automobile business was an important pillar, with revenue reaching 33.1697 billion, an increase of 118.5%.
For the slowdown in the sales growth of WEILAI Q4, many people speculate that Weilai's high pricing and high-end positioning have limited sales. However, from the perspective of sales performance, NIO's sales ASP (average sales price) did not fall but increased: in the fourth quarter, THE AVERAGE SALES PRICE of NIO reached 368,000 yuan, an increase of 15,000 yuan compared with Q3; as of January 2022, the average transaction price of the NIO brand exceeded 430,000 yuan, which was not only higher than the opponents of the same new forces, but also higher than the average transaction price of the BBA.
Therefore, although many people suggest that Weilai learn from Tesla to explore the price of products to expand sales, it seems that for the potential audience of Weilai, the attractiveness of high-priced products is further improving. This means that NIO's product structure continues to develop towards the high-end, which is in line with the positioning expectation of NIO's "high-end electric vehicles". In this way, before the launch of the new sub-brand, it is reasonable that Weilai did not plan to launch low-cost models.
01
"No plans to increase prices"
While the average selling price has improved, perhaps the biggest surprise in the earnings report is that the gross profit margin returned to more than 20%. In the fourth quarter, THE GROSS PROFIT MARGIN OF NIO's VEHICLE SALES REACHED 20.9%, AND THE ANNUAL GROSS MARGIN OF VEHICLE SALES REACHED 20.1%. Leaving aside Tesla, which has a negative gross profit margin, the gross profit margin of 20+% is quite considerable for both new power car companies and traditional car companies.
Speaking of gross profit margins, it is necessary to mention the raw materials that have recently risen fiercely, as well as various car companies that have announced price increases. In response to this, Li Bin's response is: there is currently no plan to raise prices.
Since Q3 last year, Weilai has adopted a 75-degree ternary lithium battery pack, which mixes ternary lithium with lithium iron phosphate batteries, which has played a great role in optimizing costs; at the same time, the successive launch of several new models this year will also share the cost and make the cost more controllable. Therefore, despite the price of commodities, Li Bin is still optimistic that the gross profit margin can be controlled at 18% to 20% this year.
For consumers, maintaining a stable price is indeed a little more reassuring than fluctuating up and down.
02
"Spending money" is not soft
The profitability of bicycles has been enhanced, the cost control is stable, and although the sales growth has slowed down, it is also growing steadily, and it can be said that the automobile business is working hard to improve its earning power. However, WEILAI is not soft in "spending money" and continues to increase its investment in the energy replenishment system, sales network and research and development.
In the past year, WEILAI has increased its investment in charging and replacing the energy replenishment system, sales network, and research and development.
In the fourth quarter of 2021, a total of 260 substations, 230 supercharge stations, 1092, and 90 destination charging stations and 468 destination charging stations were completed. This number accounts for almost 1/4 of the current charging and replacing energy replenishment system. By the end of 2022, a total of 1300+ substations, 6000+ superfilled piles, and 10000+ mesh piles will be built.
At the same time, the annual R&D investment exceeded 4.1 billion yuan, an increase of 53% year-on-year, including full-stack self-developed autonomous driving systems, NT2.0 platforms, new power battery technology and so on. For 2022, the R& D investment given by Li Bin will reach 9 billion, doubling the basis of last year, and the R & D personnel will also increase to the scale of 9,000 people.
Whether it is the construction of the energy replenishment system or the increase of investment in research and development, it is an expenditure that cannot see results in the short term, but it is also the key to determining whether a car company can win the long-distance run.
Therefore, although the revenue and gross profit margin of WEILAI Automobile's business in 2021 have increased considerably, the net loss for the whole year was 4.017 billion yuan, narrowing by 24.3% year-on-year. This may be the price that Li Bin has to pay when he mentions "accumulating energy".
Of course, for when Weilai can really make a profit, Li Bin also gave his own goal: balance in the Q4 quarter of 2023, and achieve profitability for the whole year of 2024.
Obviously, whether it is the energy replenishment system and marketing service network supported by the brand value of Weilai, or the technology research and development as a product support, it is necessary to continue to increase investment, and the burden of Weilai's profitability also needs to be carried by product sales.
Products are the key to deciding when NIO will erupt.
New products, the key to NIO's "outbreak"
For Weilai at this stage, when the revenue of operating services is limited, infrastructure needs large-scale investment, and research and development continues to increase, the heavy responsibility of Ascendas naturally falls on the automobile business, and the growth of delivery volume can bring about an increase in earnings.
And 2022 will undoubtedly be the "busiest" year since the birth of NIO.
New products teamed up, the offensive is surging
"In 2022, NIO will deliver three new models for the NT2.0 platform." As early as 2021 NIO Day, Li Bin made a preview of this year's new products, and the delivery rhythm was also given at this earnings call:
Et7 starts deliveries on March 28. This car, which will soon open for delivery, can be said to pin down the expectation that Weilai's delivery volume will return to the peak. However, because the ET7 was produced at the same time as the existing 866 model at the first plant of JAC Weilai, it had to undergo a slow capacity climb and could not reach conventional capacity until the third quarter. So you may not be able to see immediate results on next month's delivery transcripts.
Et5 deliveries will begin in September. This "quasi-explosive" model, which has been in high demand since its release, can be said to be the key to Opening the Sales Threshold of Weilai. NIO's second plant in NIO Park is dedicated to the production of ET5, which can also be seen in the emphasis on this model.
As for the previous spoiler ES7, it will be officially released in Q2 and delivered in Q3. I don't know if this 5-seat large SUV can continue WEILAI's offensive in SUVs?
Three new products that also carry the NT2.0 platform are just part of NIO's product offensive. Since the second half of last year, the increase in smart software and hardware such as chips and computing power has made the three models on sale such as ES8, ES6 and EC6 begin to show fatigue, which directly affects the delivery volume of Weilai, so this year, the three models have also begun to improve the product upgrade plan. The 2022 ES8\ES6\EC6 models will be launched in the form of annual models, equipped with 8155 chips, 5G communication modules, etc., and existing users can also provide hardware after-installation upgrade services.
Smart electric vehicles have accelerated the pace of automobile evolution, and have also led to rapid iterations of smart software and hardware that affect the sense of use of old users. Weilai's upgrade of the three models this time not only enhances the competitiveness of the 866 model, but also provides another option for the upgrading experience for the old users of smart electric vehicles.
The redesign of 3 new platform models + 3 models on sale is undoubtedly a very busy year for a new strength car company. The expansion of the product matrix and the expansion of the volume also means that it needs to deal with more potential problems that it has not encountered before.
For example, capacity. Nio's first plant, that is, JAC Weilai plant, currently produces 866, ET7, ES7 models at the same time, although the production line optimization has been carried out during the past Spring Festival, but the simultaneous production of many models still complicates the management and climbing stage of the production plant. Nio's second plant in NIO Park is preparing for the production of ET5. According to Li Bin, the current production beat is 60JPH, and it is estimated that the annual production capacity can reach 300,000 vehicles.
However, whether it is the first factory or the second factory, the full release of production capacity may not see the effect until the second half of this year or even the end of the year, and the explosion of delivery will take time.
Another example is supply chain. In the past period of time, commodity prices have risen, cell shortages, and chip shortages have directly affected the delivery capabilities of car companies. When the scale of products and the volume of orders grow at the same time, accompanied by the shortage of chips and batteries, the pressure on the supply chain side also increases. Just like the chip shortage suffered by the automotive industry in the second half of last year, a small ECU chip may be a lifesaver that hinders vehicle production capacity.
New brands, already on the way
When will NIO launch a relatively affordable sub-brand? This question can be said to have been asked from last year to this year.
Just like Tesla's explosion in sales after the launch of the more affordable Model 3/Y, the launch of lower-priced models and entry into the sinking market are also regarded as the key nodes of Weilai's sales explosion. For this new brand, Li Bin finally gave a response: the new brand for the mass market has built a core team, clarified the strategic direction and development plan, and the first batch of products have entered the key research and development stage.
It seems that the new sub-brand is already on the way.
However, before this, WEILAI still needs to solve the supply chain and production capacity problems first, meet the needs of existing brands and new models, in order to cope with the larger sinking market.
At last
In the past few months, Weilai has not walked easily, and it needs a beautiful report card to prove the significance of its persistence.
At the earnings report, Li Bin revealed that the sales volume of Q1 in 2022 will reach 25,000 to 26,000 units, which means that the monthly sales in March are likely to return to 10,000 units. With the delivery of new products, NIO's new growth points will also begin to be released. This may be what Li Bin said, after experiencing the "explosion" of "accumulated energy".