Written by / Han Ling
Edited / Mao Shiyang
Electric vehicle FOUNDRY melee began?
Weilai himself has not yet earned money, Jianghuai has already earned Weilai's money.
From March 24 to 25, WEILAI and its FOUNDRY partner Jianghuai Automobile successively released their 2021 financial reports. Among them, Weilai's financial report shows that the company's annual revenue in 2021 was 36.14 billion yuan, an increase of 122.3% year-on-year, and although the net loss was greatly narrowed, it still lost 4.02 billion yuan.
In contrast, according to Jianghuai Automobile's 2021 financial report, its annual revenue was 40.214 billion yuan, down 6.11% year-on-year, and the decline in revenue scale showed that the main business did not fundamentally improve, but in terms of profitability, after having Weilai, a hardcore customer, Jianghuai's net profit attributable to shareholders of listed companies was 200 million yuan, an increase of 40.24% year-on-year.
In 2016, NIO and JAC signed a foundry agreement, and since then NIO has maintained a long-term cooperative relationship with JAC, and NIO's models are produced by JAC OEM. Jianghuai also relied on Weilai's sales growth to obtain a stable source of income, and the OEM income became the most eye-catching part of its performance report.
"Finance and Economics" Weekly learned that Jianghuai Automobile has fallen into three consecutive years of losses since 2017, and its profits have turned positive since 2020, and the two years since Jianghuai's profits have turned positive are also the two years of rapid sales growth of Weilai.
According to the financial report, the cumulative sales volume of JAC pure electric passenger cars in 2021 was 134,000 units, an increase of 169.12% year-on-year. Among them, about 93,000 units are OEM of Weilai, and JAC's own new energy passenger car sales are only more than 40,000.
In NIO's 2020 financial report, as of December 31, 2019, NIO paid a total of 271 million yuan in foundry fees to Jianghuai, and Weilai sold a total of 31,913 vehicles before this period. Because the details of the specific FOUNDRY contract between the two sides have not been announced, 8500 yuan is only a rough judgment, but it can still prove the rich income of the foundry from the side.
In 2020, with the increase in sales of Weilai, the FOUNDRY costs obtained by JAC have also risen. In 2020, WEILAI paid 507 million yuan in foundry fees to Jianghuai, and the annual sales of WEILAI in that year were 43,000 vehicles, and the average oem cost of one car in Jianghuai rose from the previous 8,500 yuan to 11,000 yuan.
Judging from the financial report alone, OEM is a stable business for Jianghuai. Three years before the foundry project was put into production, WEILAI needed to fully compensate for the loss. From 2018 to 2020, Jianghuai Automobile recognized loss compensation of 126 million yuan, 207 million yuan and 0.65 billion yuan respectively, and these loss expenses will all be paid by Weilai.
If you compare the foundry fee of Jachuai with the gross profit and net profit of mainstream car companies, Great Wall and Geely, you will find that Jachuai's bicycle foundry cost is almost on par with the gross profit of Great Wall Geely's bicycle. In 2020, the gross profit of bicycles on the Great Wall was 16,000 yuan, the net profit of bicycles was 4,806 yuan, and the gross profit of geely's bicycles was 12,800 yuan, and the net profit of bicycles was 4223 yuan.
In 2021, WEIRA's annual delivery volume continued to climb by more than 90,000 vehicles, because WEILAI did not announce the relevant FOUNDry expenditure in the 2021 financial report, but it is certain that the foundry fee obtained by JAC will further increase on the basis of 2020.
Attracted by the strong ability to "absorb gold", more and more mainstream car companies and manufacturing giants have begun to look at the "fat meat" of the whole vehicle OEM.
In September 2021, Wang Chuanfu, chairman of BYD Group, made the high-profile platform of the e-platform 3.0, saying that the platform is the most critical layout for BYD to shift from electrification to intelligence, which can improve its competitiveness in the research and development cycle and product quality. Not only that, e-platform 3.0 is open to the entire industry, and BYD hopes to use this manufacturing platform to "OEM" pure electric models for other car companies.
Previously, BYD has obtained a large OEM order for Didi's "car manufacturing" through the e-platform. According to Didi's plan, the goal of driving 1 million shared customized cars on the road will be achieved in 2025, and if the cooperation between the two sides goes smoothly, it will bring benefits to BYD.
"BYD itself is the king of foundry, its manufacturing capacity is relatively leading in the industry, compared to those oem companies that have to purchase all parts and components themselves, BYD can get greater profits in foundry." Ji Xuehong, an automotive analyst and professor at North China University of Technology, told Caijing Tianxia Weekly.
Not only BYD, Geely launched the SEA Haohan architecture platform with an investment of 18 billion yuan last year. In order to make more new car manufacturers become customers of the platform, Geely will not hesitate to start investment. Previously, Geely invested in Baidu-led Jidu Automobile in order to promote its car-making platform. In order to expand the "OEM" circle of friends, Geely also considered investing in FF, which was founded by Jia Yueting.
In addition to car companies, Foxconn, Luxshare Precision, etc. have also entered the game, and a round of OEM war is about to begin.
At present, Foxconn has launched its self-developed MIH platform and established a joint venture with Geely in 2021 to provide OEM production and customization consulting services for global automotive and mobility companies. In addition, Luxshare Precision's investment in Chery, in the eyes of the outside world, one of the important purposes is also to lay out the OEM business of electric vehicles.
New cars worry about "stuck necks"
"A good car-making platform can improve the generalization rate of auto parts during production and manufacturing, compress production costs, and shorten the product development cycle." Previously, some insiders explained to the "Finance and Economics" Weekly that there are two measures to consider whether a car-making platform is advanced, one is the cost, whether it can improve the generalization rate of parts and components, and minimize manufacturing costs; the second is research and development, and a good platform can cover as many or even full range of models as possible in the whole category of SUVs to cars, large cars to small cars.
In the era of fuel vehicles, Volkswagen carried the production and research and development of almost all the main sales products of the four brands of Audi, Skoda and SIT through the MQB platform. In addition, Toyota, GM, etc. also have their own car-making platforms.
Unlike car companies such as Jacques and Haima, car companies such as Geely and BYD have greater ambitions behind entering the field of foundry.
In fact, once the new car manufacturers begin to accept the standards of a certain manufacturing platform, the research and development of subsequent products must also meet the standards of the platform. In the eyes of industry insiders, in addition to obtaining the profits of OEM, traditional car companies want to become the standard setters of the era of electric vehicles through their own platforms.
"BYD has launched its own platform, including the release of source code such as automatic assisted driving, on the one hand, to create a brand image, which is a powerful publicity for the capital market and consumers." Auto analyst Feng Shiming told the "Finance world" weekly, "The other is to reduce risk, it is the integration of the body, with its blade battery, equivalent to a complete set of sales." ”
Not only BYD, when announcing its cooperation with Baidu, Hu Zhengnan, then president of Geely Automobile Research Institute, explained, "Based on the SEA OS system, suppliers in the traditional sense will become Geely's development partners, and technology companies and individual users can carry out customized development on this open platform." ”
This means that compared with the cooperation forms between JAC and Weilai, Xiaopeng and Haima, Geely, BYD and other relatively strong OEMs hope to provide more technical support and supply chain sharing through OEM. Li Donghui, CEO of Geely Holding Group and vice chairman of Geely Automobile Holdings Co., Ltd., said that whether the future cooperation will use Geely's technology, platform architecture, or play Geely's production capacity role, there will be opportunities for Geely to obtain technology transfer income.
"There's an influx of players on the car-building track." An industry insider told the "Finance and Economics" weekly that new car manufacturers are still losing money, and in contrast, OEM seems to be a business that makes no loss.
But in fact, at present, this part of the income of major car companies is still very small. Geely's 2020 financial report shows that the revenue of R&D and related technical support services in that year was 745 million yuan. In the 2021 semi-annual report, the revenue of this business fell to 447 million yuan.
Behind the small income, the ideal is very full, but the reality is still "bone".
The battle for the right to speak begins
In fact, companies that simply provide oem vehicles are weakening their right to speak.
In March 2021, WEILAI and JAC established a joint venture company, Jianglai Manufacturing. In the eyes of the outside world, after that, Weilai's foundry orders will gradually be transferred to the joint venture company, and Weilai holds 49% of the equity of Jianglai Manufacturing, and the "dividend" is no longer exclusively occupied by JAC.
In addition, in the newly signed OEM production agreement, NIO is no longer paying a fixed bicycle manufacturing and processing cost, but dynamically adjusting based on the improvement of scale and production efficiency. This means that with the increase in sales of Weilai, the scale effect of the manufacturing end is further highlighted, and the foundry fee paid by Weilai is expected to be further reduced.
Behind this, fierce competition is compressing the discourse power of vehicle foundry enterprises. In fact, mainstream car companies have gradually launched their own research and development of pure electric platforms. In addition to cost, new car manufacturers are also worried about being "stuck neck" by traditional car companies.
"Mainstream car companies will hardly choose open platform FOUNDRies such as BYD and Geely, and the modular foundry of the platform means that they (BYD) have almost packaged more than 80% of the parts of a car, which is not only using the platform, but also deeply bound to their supply chain, the price will certainly not be cheap, the key is this degree of cooperation, and it is difficult for car companies to reach complete trust with each other." Feng Shiming told the weekly magazine "Finance and Economics".
In fact, the platform-based foundry methods such as BYD and Geely mean that the FOUNDry enterprises will intervene in the product design, manufacturing and other aspects of the OEM, which leads to the foundry's voice being relatively strong.
Industry insiders said that at present, electric vehicles are in the stage of large-scale research and development, and the various product standards, including batteries, are not completely unified, and the core data between car companies is still confidential.
"Overall, at this stage, the publicity effect of this open platform is greater than its actual industry value, but a small number of car companies without production and research and development capabilities will choose the platform, but it is only a temporary measure for a short period of time." Feng Shiming believes that in the long run, platform OEM will not become the mainstream way for powerful new car manufacturers to solve production problems.
This is a competition about the core competitiveness of car companies. In this process, car companies with certain strength and ambition will hardly choose to leave their data and software development permissions to the foundry.
He further explained that for some new forces that are weak in research and development and capital, or some independent brands that are on the verge of bankruptcy, eager to transform to new energy, they may choose this platform-based OEM method, because they have no choice.
In fact, car companies naturally understand that becoming a standard setter is obstructive and long, so at present, for them, the more practical purpose of OEM is not to use OEM to reactivate idle production capacity. As the number of cars tends to be saturated, there is not much room for growth in the quantity of cars in the future, which leads to a slowdown in the growth rate of demand for production capacity, and may even decline.
"Because the government's management of foundries has not been completely relaxed, some high-quality production capacity cannot be fully utilized, and now the high-quality production capacity is not enough, and there is some excess of inferior production capacity, so the relevant government departments are also considering that some foundries can be used in an orderly manner." Ye Shengji, deputy secretary-general of the China Automobile Association, told Caijing Tianxia Weekly.
He believes that the domestic vehicle supply chain and industrial chain are now relatively mature, and the quality of the OEM can also be guaranteed to a certain extent. Therefore, FOUNDRy may become a development trend driven by policies.
In addition to the policy, the foundry path of new car manufacturers is quietly changing, Xiaopeng and Ideal are gradually choosing to build their own factories, and Weilai, Jidu, etc. are deeply bound with the foundry at the capital level.
Xiaopeng and Haima's OEM cooperation expired at the end of last year and did not continue to cooperate. Moreover, in the early days of cooperation between Xiaopeng and Haima, Xiaopeng had already begun to build its own factories, and since then, the factories in Guangzhou and Wuhan have also been put into construction. Cui Dongshu, secretary general of the Association, believes that new energy vehicles are important projects for local governments to attract investment and investment. For Xiaopeng Motors, building its own factory and receiving support from local governments has greater benefits than adopting the OEM mode of production.
In addition to Xiaopeng, the choice of self-built factories for new cars has become a new trend, and Niuchuang, Zero Run, Nezha, Weima, Yundu, and Aiways all have their own self-built factories.
At the same time, some car companies have firmly chosen the road of OEM. Weilai not only renewed the OEM contract with the foundry party Jianghuai, but also established a joint venture company, which is very different from the choice of other new car manufacturers. Qin Lihong, co-founder of Weilai Automobile, believes that OEM is a win-win cooperation for Weilai and Jachuai.
"We also like the qualifications, but you asked me to spend 1 billion to buy an empty shell, and I certainly don't do it." We do not acquire production qualifications through the acquisition of shell resources. Qin Lihong once said that qualifications do not have to be pinched in their own hands, and cooperation with Jianghuai not only did not affect the production efficiency of Weilai, but also helped Weilai save money.
Before Dongfeng Yueda Kia oem for Huaren Express, the latter already had equity cooperation with Yueda Group, and since then, Yueda Group has also increased the capital of Huaren Express. The weak position of the former oem has been slightly adjusted after the two sides began to cross capital and equity.
In fact, whether it is JAC, Haima or Dongfeng Yueda Kia, as a foundry party, they have problems in production and operation, and JAC and Haima even once faced a risk warning of delisting. It is precisely because of this that Weilai, Xiaopeng and Gaohe will choose them to oem, so as to achieve the greatest degree of control in management and production.
The competition in the new energy market is already in a white-hot stage, and at the same time, the OEM dark war between car companies is also rising and falling. But now, compared with the strong position of mainstream car companies, some tail car companies are more likely to win the OEM order.