Reporter | Zhang Qiaoyu
Zero-run technology, which was established in the same period as "Wei Xiaoli" and delivered the first intelligent electric vehicle at a similar time, has rarely been talked about.
Recently, Zero Run Technology submitted a prospectus to the Hong Kong Stock Exchange, committed to becoming the fourth smart electric vehicle manufacturer to impact the Hong Kong capital market after "Wei Xiaoli".
As of 2021, WEILAI Automobile's revenue is 36.14 billion yuan, Ideal Automobile's revenue is 27.01 billion yuan, and Xiaopeng Automobile's revenue scale from January to September 2021 has reached 12.43 billion yuan, while zero-running technology has only achieved 3.13 billion yuan in revenue in 2021. The same zero-run technology, which was established in 2015, why is the gap between it and "Wei Xiaoli" getting wider and wider?
Can delivery keep up?
In June and December 2018, NIO and Xiaopeng Automobile delivered their first intelligent electric vehicles, the seven-seater ES8 and G3, respectively. In July 2019, Zero Run Technology began to deliver its own smart electric coupe S01. In December, Ideal Cars began delivering the first Ideal ONE.
At that time, the four companies seemed to be on the same starting line, and the four first-time deliveries of smart electric vehicles were positioned in different price ranges: the price range of S01 was 120,000-150,000 yuan; the price range of G3 was 140,000-200,000 yuan; the ideal ONE price was about 338,000 yuan; and the price of ES8 was about 468,000 yuan.
From the price point of view, the pricing of the first intelligent electric vehicle of Zero Run Technology is low in the four. In terms of the delivery volume of the first car, in the second half of 2018, NIO delivered a total of 11,348 ES8; the Xiaopeng Automobile G3 delivered in December also delivered 29 units at the end of 2018, followed by 12,728 units in 2019; the ideal ONE that began to deliver in December 2019 delivered 973 vehicles in the year and 67,072 vehicles in 2020.
In contrast, the zero-run technology S01 delivered in July 2019 delivered 1034 vehicles in that year, and only 1037 vehicles were delivered in 2020, and the delivery growth trend lagged behind "Wei Xiaoli". In 2021, only 634 zero-run technology S01 vehicles were delivered.
According to the prospectus, in May 2020, Zero Run Technology began to deliver the four-door electric mini car T03, delivered 7013 units that year, and in 2021, Zero Run Technology optimized it and launched three modifications, and the T03 delivery volume reached 34999 units in that year.
Based on this, the revenue of Zero Run Technology in the reporting period (2019 to 2021) was 117 million yuan, 631 million yuan and 3.132 billion yuan respectively, especially in 2021, under the large delivery of T03, the revenue increased by 396.35% year-on-year.
However, at that time, the revenue scale of Zero Run Technology was already a long way behind that of "Wei Xiaoli". Weilai Automobile achieved revenue of more than 10 billion yuan in 2020 to reach 16.26 billion yuan, and in 2021, it increased by 122.3% year-on-year to 36.14 billion yuan.
Xiaopeng Automobile's revenue in 2020 increased from 2.32 billion yuan in the previous year to 5.84 billion yuan, and as of January to September 2021, Xiaopeng Automobile's operation reached 12.43 billion yuan.
The revenue in 2019 was 280 million yuan, and the ideal car revenue closest to zero-running technology also soared to 9.46 billion yuan in 2020, and increased by 185.5% year-on-year to 27.01 billion yuan last year.
The interface news reporter noted that in May 2021, Zero Run Technology delivered the medium-sized intelligent pure electric SUV C11, and as of 2021, Zero Run Technology received a total of 22536 C11 orders, but only delivered 3965 of them, 17.59% of the orders for that year.
While it's important to attract orders, it's equally important to achieve the ability to deliver orders. Although the customer has paid the deposit, delays in delivery time may still cause the order to be cancelled.
According to the data on the official website of Ideal Automobile, its new orders in June 2021 exceeded 10,000 units in a single month, of which 7713 units were delivered in the same month, and the delivery volume in the month was 77.13% of the number of orders in the month.
NIO has also attracted attention due to a large decline in deliveries. In October 2021, NIO delivered 3,667 vehicles, 6,961 fewer than in September of that year, a decrease of 65%. It is reported that NIO's orders in October last year also hit a record high, according to NIO's response, the decline in deliveries was mainly due to the transformation of production lines.
Layout "high-end" but not "not high-end"
At present, new energy vehicles below 150,000 yuan in 2021 are still the main sales force in the Chinese market, but the proportion has a downward trend.
Frost & Sullivan data shows that the high-end mainstream market priced at 150,000-300,000 yuan will become the largest and fastest growing segment of China's new energy vehicle market by the end of 2023.
Source: China Association of Automobile Manufacturers, China Passenger Car Market Information Association, Frost & Sullivan
Zero Run Technology also said that it mainly focuses on China's high-end mainstream new energy vehicle market with prices between 150,000 yuan and 300,000 yuan.
The interface news reporter noted that the current price of the three cars under zero-running technology is more inclined to the low-end market.
Of the three cars, the S01 is priced at no more than 150,000 yuan, the T03 is cheaper, priced in the range of 60,000-90,000 yuan, and only the C11 is priced at 150,000-200,000 yuan, which is also located at a lower value in the range of 150,000-300,000 yuan.
Image source: Zero Run Technology Prospectus
From WEILAI ES8, ES6, ET5 to Ideal ONE, its pricing is more than 300,000, and Xiaopeng Automobile is more focused on the high-end market, with the price of its G3 and P7 ranging from 150,000 to 400,000 yuan.
At present, Zero Run Technology is still in the red. Adjusted net losses for the reporting period, excluding share expense, were $810 million, $935 million and $2,629 million, respectively, with losses widening by 181.2% year-on-year in 2021. The gross profit margin of the company in the reporting period was -95.7%, -50.6% and -44.3%, respectively, which improved but still did not make ends meet.
R&D investment is subject to revenue scale
Zhu Jiangming, CEO of Zero Run Technology, was one of the founders of SZ002236, an A-share security leader, and Zero Run Technology is currently positioned as the only emerging electric vehicle company in China with global independent research and development capabilities.
For example, the C11 delivered by Zero Run Technology adopts advanced core systems and electronic components such as self-developed, self-produced electric drive system, battery system and intelligent cockpit.
At the same time, Zero Run Technology expects to use Battery Chassis Integration (CTC) technology in the future, which will be applied to the delivery of C01 in the third quarter of 2022, and is expected to become the world's first emerging electric vehicle company to adopt CTC technology in production models.
As of 2021, the proportion of R&D personnel in Zero Run Technology is 33.9%, and the proportion of the company's R&D investment in operating income in the reporting period is 308%, 46% and 24%, respectively. This ratio is not low compared to "Wei Xiaoli", but subject to the scale of revenue, the actual R&D investment of Zero Run Technology in the reporting period was only 360 million yuan, 290 million yuan and 740 million yuan, respectively.
In the same period, the R&D investment of Ideal Automobile was 1.17 billion yuan, 1.10 billion yuan and 3.29 billion yuan respectively; the R&D investment of NIO was 4.43 billion yuan, 2.49 billion yuan and 4.59 billion yuan, respectively; and the R&D investment of Xiaopeng Automobile from 2019 to January to September 2021 also reached 2.07 billion yuan, 1.73 billion yuan and 2.66 billion yuan, respectively.
Because of the large absolute data gap, the future research and development results of Zero Run Technology are worth paying attention to.
In this round of listing, Zero Run Technology plans to use 40% of the fundraising amount for research and development; 25% for increasing production capacity; 25% for expanding business and enhancing brand awareness; and 10% for marketing and brand awareness.