01
The profit margin of the bicycle was 20.1%, and the net loss was 4.0169 billion yuan
On the march 25, 2022 earnings call, although 2021 is still in a state of loss, Li Bin, founder, chairman and CEO of WEILAI Automobile, said the next big move of Weilai:
ET7, based on NIO's NT2.0 platform, is in the ramp-up phase and will start delivery on March 28;
The plant construction and equipment installation of the second production base located in Hefei Xinqiao Intelligent Automobile Industrial Park have been basically completed. The second production site is scheduled to be officially put into operation in the third quarter of this year, and the first model produced will be the ET5;
The ES7 was released in the second quarter of this year, positioned as a medium-sized high-end 5-seat SUV, and is scheduled to start delivery in the third quarter of this year;
The business work for the new mass market brand is progressing smoothly, the core team is completed, and the first products have entered the critical research and development stage.
The construction of product and service systems in Germany, the Netherlands, Sweden and Denmark has been carried out smoothly;
The ES8 has won the hearts and minds of Norwegian users. Monthly deliveries so far this year have firmly ranked in the top two of Norway's 6-seater and 7-seat passenger car markets.
In January and December 2021, ET7 and ET5 occupied the NIO Day slot of WEIO's year, and the blank 2021 of NIO's new cars, the rise of power battery raw materials, the tight supply of in-vehicle chips, and the surge in the penetration rate of new energy vehicles.
Relying on ES8, ES6 and EC6 "866 Three Musketeers" to support a day in 2021, Wei has achieved a profit margin of 20.1% for bicycles, a full-year vehicle delivery, a full-year gross profit of 6.8214 billion yuan, and an annual R&D investment of 4.5919 billion yuan, and put forward the goal of delivering 25,000-26,000 new cars for the upcoming 2022Q1.
2022 is the big year for the launch of the new NT2.0 platform in NIO's product line: ET7, ET5 and ES7 return.
02
With a cash flow of 55.4 billion, it is expected to be profitable in 2024
From the 2021Q4 financial report released by NIO and the financial data performance of the whole year of 2021, the delivery data, production capacity and service system construction, NIO has achieved a healthy positive closed loop of "production-sales-R&D-development":
Delivered 91,429 new cars throughout the year, almost 2 times as many as in 2020;
Delivery of 182,835 new vehicles in the first two months of 2022;
The production line upgrade of JAC WEILAI Advanced Manufacturing Base is being promoted in stages, and it is expected that the production capacity of the whole production line will be increased to 60 JPH (Jobs Per Hour) in the middle of the year;
In 2022, NIO will deploy 30 new power plan destination power-up routes. The Chinese market will have built more than 1,300 substations, 6,000 supercharged piles, and 10,000 destination charging piles;
NIO plans to add no less than 100 new sales outlets throughout the year, adding more than 50 NIO service centers and authorized service centers.
Perhaps planning for the surge in demand for the new energy market in 2021, IF NIO's new plant to start operations in 2022 will be able to achieve the expected goal of producing 20,000 new cars per month if it is fully operational. According to the determination to increase efficiency and reduce costs expressed in the CONFERENCE CALL, it is not known to achieve a production of 300,000 vehicles in response to market demand for the whole year. Among them, the arrangement of ET5 and ET7 collinear production may significantly shorten the distribution time of ET5 owners while achieving the delivery rhythm of ET7.
Along with the Q3 2022 ES7, there will be a second production site in the future. The second production site has a planned production capacity of 60 JPH and the first production model is the ET5. This is also the first important plant in WEILAI to reach an annual production capacity of 1 million units.
Tesla once announced in its 2021Q4 financial report that its model 3 and Model Y models achieved a bicycle gross profit margin of more than 20% - a "boom-bus line" that is widely believed to be whether car companies can rely on the closed loop of production and sales to survive and develop. Nio's bicycle gross margin for two consecutive quarters in 2021 has remained above 20%, which means that NIO has a "hematopoietic function" and can maintain healthy production, research and development and operation through product revenue. And this is all achieved in 2021, NIO does not have a new model of vehicle delivery market background.
2021Q4 NIO's sales were 9,215.4 million yuan, an increase of 49.3% year-on-year;
2021Q4 Total revenue was RMB9,900.7 million, up 49.1% year-on-year, and gross profit was RMB1,699.5 million, up RMB557.6 million year-on-year, up $177.7 million sequentially;
In 2021, NIO's automobile sales were 33.139 billion yuan, an increase of 118.5% year-on-year, and the gross profit margin of automobile sales was 20.1%, compared with 12.7% in 2020;
In 2021, NIO's total revenue was 36,136.4 million yuan, an increase of 122.3% year-on-year; gross profit was 6,821.4 million yuan, an increase of 19,878.5 million yuan from 16,257.9 million yuan in 2020;
NIO's full-year gross margin was 18.9%, compared to 11.5% in the previous year.
WEILAI believes that in the process of improving the gross profit margin of automobiles, two factors play a key role:
2021Q4 75 kWh ternary iron lithium battery packs started to improve vehicle costs and supply efficiency;
The growth in total vehicle sales has played a role in scale, and the cost has been evenly shared.
03
The "speculative price increase" raw material market and the continued tight supply of in-vehicle chips
In 2021, China's new energy vehicle market penetration rate increased from 5.9% to 18.6%, and the soaring demand within one year has allowed upstream suppliers to see a profit window. Li Bin said on a conference call that THE LIBRARY OF CAR CHIPS AND BATTERY PACKS HELD BY WEILAI IS ENOUGH TO SUPPORT PRODUCTION DELIVERY IN 2022.
Li Bin believes that the product line that Weilai is selling now will not consider price adjustments in the near future, and even the hard-working "866" three musketeers can enjoy the smart cockpit hardware upgrade in 2022. However, the price of ES8, ES6 and EC6 models equipped with updated 8155 car chips and 5G communication modules will be adjusted.
Weilai adheres to the power exchange strategy, which means that it is necessary to maintain a large amount of battery pack reserves for a long time to maintain the products and services of Weilai power exchange and supplement the vacancy in the circulation of the battery pack because of the shortened life of the battery pack. In the context of high battery costs this year, the already systematic power exchange business and battery leasing business BaaS have formed a sponge to absorb and digest the rising cost of battery raw materials.
For users, even if Weilai is forced to choose to increase the price of battery use, the extra price is not immediately removed from the wallet due to the characteristics of paying for the use of batteries in installments. On the contrary, Weilai's "speculative" characterization of the price increase in 2022 allows users to pay a rent every month, with a time buffer for the price to fall.
04
New brands are down, new markets are outward
Li Bin said that NIO's new mass-market brand has completed team formation, and the research and development of the first batch of products has also entered a critical stage.
The news of overseas layout and market expansion released by WEILAI's financial report can also enhance investor confidence. With Li Bin's brand positioning of "facing the mass market" and the price plan of 50,000-150,000 US dollars, the new brand is bound to have a certain overlapping price range with the current Tesla Model 3, Model Y, Xiaopeng P7 and other products. NIO will definitely make the new brand an entry ticket to the NIO service system, and achieve healthy brand revenue through more profit links of the service system, as well as the degree of differentiation from the NIO brand.
Overseas new markets, exploring new brands, this is the power of WEILAI's core battery technology and standard NAD assisted driving hardware, while the new factory put into operation and production line transformation, ET7 production ramp-up also brings cost savings and shortened delivery cycle scale effects to NIO. Higher vehicle deliveries bring more users, and NIO's proud service system becomes a moat to ensure revenue, and even a "cow" that brings cash flow.
For listed companies, investors tend to focus more on long-term business performance than on temporary profits. No investor can reject a company whose bicycle profit margin is comparable to Tesla's, whose main model price is above model 3 and Model Y, whose market layout is global, and whose system services can bring additional benefits.
The three leading domestic royal families - Weilai, Xiaopeng and Ideal have all crossed the threshold of survival, and their vision has also expanded to overseas markets. The fluctuations in the supply chain in 2022 are enough to make a number of manufacturers who have not crossed the threshold of "independent hematopoiesis" and have not yet "escaped" the pressure - the new energy market may no longer be able to accommodate challengers from scratch.
Q&A on a conference call
Written by: Yue Ba Jin Shuai
EDIT: Daji
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