Volkswagen is really anxious, 2021 research and development costs = 7 Tesla or 10 BYD!

Written by / Qian Yaguang

Edited / Zhang Nan

Design / Shi Yuchao

On March 25, StockApps.com released a report comparing R&D and advertising spending per vehicle across all major automakers, and concluded that Tesla spent $2,984 per vehicle on research and development, three times the industry average (about $1,000), leading the way in terms of single-vehicle R&D spending.

Bicycle R & D costs for measuring the R & D investment of a car company, is a dimension of consideration, but not comprehensive, not very accurate, because each company sales are not the same, sales revenue is not the same, the development history time is not the same, if it is a start-up company, sales are very small, investment is less, the average cost per car is certainly not cheap, and the sales of large car companies, huge investment may be shared by the huge sales, will not be too much.

At present, the automotive industry in the wave of great changes in the transformation and upgrading, for car companies, the key is to improve the ability of independent innovation, the formation of core competitiveness advantages, and ultimately improve the performance of enterprises, which are inseparable from R & D investment. Whether or not they are willing to invest in research and development is the key for automobile companies to maintain sufficient competitive advantages and become bigger and stronger.

As a key indicator to measure the core competitiveness of car companies, R&D investment is not only the embodiment of the hard strength of auto companies, but also directly affects the company to seize a favorable position in the future track.

For the R & D investment of car companies, not only to look at the cost of bicycle research and development, but also to look at the overall research and development expenditure, but also to observe the proportion of research and development revenue, that is, the proportion of research and development expenses in operating income.

The proportion of R&D revenue not only affects the financial data of enterprises, but also truly reflects the R&D situation and real R&D capabilities of each company, measures the importance that enterprises attach to R&D, and has more reference value for the development of research car companies.

We found 8 representative companies from the new car-making forces, domestic private car companies and multinational car companies, and made some comparisons of the proportion of their R&D expenses in their revenue in 2021 and the change in the proportion of R&D revenue in the previous three years. From this, we found that the proportion of R&D investment may have different significance for car companies with different sales scales and different stages of development.

The new domestic car-making forces, due to small sales (less than 100,000 vehicles / year), no traditional fuel vehicle production capacity burden, there is sufficient funds from the capital market, research and development momentum is greater, more than 10% in 2021, or even close to 20%.

However, from the perspective of their development process, they will have a very high proportion of R& D revenue in the initial stage, and with the rapid rise in sales, the revenue will rise rapidly, and the proportion of R & D revenue has dropped significantly.

Other mature automobile companies with sales volume of a certain scale, the proportion of R & D revenue is mostly maintained at 5%-8%, most of the R & D expenses will increase with sales, revenue increase shows a year-on-year upward trend, but the proportion does not change much.

In 2021, the research and development expenses of domestic car companies on the table exceeded the net profit, and the new forces of car manufacturing will still invest a lot of money in research and development even in the case of large losses, while the research and development expenses of foreign companies are basically controlled in the profit range, and Tesla is not even 40% of the profit.

tesla

According to Tesla's 2021 annual financial report, global sales exceeded 936,000 vehicles, an increase of 99.15% compared with 2020, and Tesla's total revenue for the whole year was about 53.823 billion US dollars, an increase of 71% year-on-year, and the operating profit was 6.523 billion US dollars.

In 2021, Tesla spent a total of $7.083 billion on research and development and other important investments. Among them, R&D expenditure was US$2.591 billion, an increase of 74% year-on-year, and the proportion of R&D revenue was slightly higher than that of the previous year, at 5%.

In Tesla's 10-K filing with the U.S. Securities and Exchange Commission (SEC), the company said its R&D expenses mainly include labor costs for manufacturer teams in the engineering and research fields, costs for manufacturing engineering and manufacturing testing agencies, prototyping costs, contract and professional services fees, and depreciated equipment expenses.

Tesla said the increase in R&D expenses was primarily due to an increase of $506 million in employee and labor-related expenses due to an increase in the number of employees, an increase of $263 million in R&D expense materials, a $211 million increase in facilities, external services, freight and depreciation expenses, and an increase of $103 million in stock-based compensation expenses.

Those spending support Tesla's expanding product roadmap, such as new versions of the Model S and Model X. R&D spending also includes the development of new technologies, such as Tesla's own new 4680 battery.

In addition, there are additional R&D expenditures as the Texas Gigafactory and the Berlin Gigafactory are still in the pre-production phase.

Nio Lai

In 2021, NIO delivered 91,429 new cars throughout the year, an increase of 109.1% year-on-year, lower than the average growth rate of new energy vehicles. In the first two months of this year, WEILAI delivered less than Xiaopeng, Ideal and Nezha.

According to NIO's financial report data, the annual operating income of 2021 was 36.1 billion yuan, an increase of 122.3% year-on-year; the net loss was 4.02 billion yuan, narrowing by 24.3% year-on-year.

As for the reasons for long-term losses, Li Bin said that it mainly comes from long-term research and development and investment in the European market. Founded 7 years ago, WEILAI has continuously raised funds and invested heavily in research and development, and in the past four years, WEILAI's R&D investment has exceeded 15.5 billion yuan.

According to the financial report, WEILAI's annual R&D investment in 2021 was 4.591 billion yuan, accounting for 12.7% of R&D revenue. At present, more than 4500 patent applications (including authorization) have been published.

Among the R&D investment in 2021, the R&D expenses of the three latest NT2.0 platforms that will be mass-produced this year are an important part.

In addition, the continuous investment in the full-stack autonomous driving, the power battery industry, and the investment in the research and development of power exchange technology is not a small amount.

NIO is still planning the listing of affordable cars, Li Bin said that the core personnel team of NIO's new brand for Volkswagen has been formed, and the first batch of product research and development has entered a critical stage.

Xiao Peng

Xiaopeng Automobile delivered a total of 98,155 vehicles in the whole year, an increase of 360% year-on-year, becoming the top seller of China's new car-making forces.

Xiaopeng Automobile's total revenue in fiscal 2021 was RMB20.99 billion (US$3.29 billion), an increase of 259.1% from RMB5.84 billion in 2020. Among them, the sales revenue of automobiles was 20.04 billion yuan (US$3.15 billion), an increase of 261.3% over 5.55 billion yuan in 2020. Xiaopeng net profit - 4.863 billion yuan, a growth rate of 78%.

The annual R&D investment was 4.114 billion yuan, an increase of 138.4%; R&D revenue accounted for 19.6%, a decrease of 33.6%.

In the field of automotive intelligence, Xiaopeng Motors continues to develop in a full-stack self-developed manner, and strengthens the reliability of intelligent driving systems with multi-sensor fusion solutions of vision, radar and high-precision positioning.

In terms of vehicle architecture, Xiaopeng has been laying out the electronic and electrical architecture of "central supercomputing + regional control" and the SiC high-voltage pure electric platform, and plans to achieve mass production on the next product G9.

ideal

Ideal Auto delivered 90,491 units in 2021, an increase of 177.4% year-on-year, and sales growth promoted the increase in ideal revenue, while with bicycle sales, ideal annual delivery has approached the 100,000 mark.

In 2021, the revenue of Ideal Automobile was 27.01 billion yuan, an increase of 185.6% year-on-year. Among them, the vehicle sales revenue was 26.13 billion yuan, an increase of 181.5% year-on-year. The ideal net profit was -321.5 million yuan, an increase of 111.9%; the profit margin was -1.19%.

In 2021, the research and development expenditure of the ideal car was 3.286 billion yuan, an increase of 198.8%, and the proportion of research and development revenue was 12%, an increase of 4.6%.

The increase in R&D expenses was mainly due to the increase in R&D personnel, increased employee compensation, and R&D expenses for new models.

In terms of electrification, Ideal Auto is currently vigorously developing high-voltage ultra-fast charging pure electric vehicle technology; in terms of smart cockpit, Ideal Intelligent Cockpit pioneered a four-screen interactive system, using a dual-system architecture, a full-vehicle voice interaction system to improve the quality of interaction; in terms of automatic driving, Ideal Full Stack self-developed advanced driver assistance system is also equipped with a horizon "Journey 3" automatic driving chip and 5 millimeter wave radars, and subsequent models will use NVIDIA Orin chips.

Great Wall

In 2021, Great Wall Motor sold 1.28 million units, an increase of 14.79% year-on-year. According to the financial report of Great Wall Motor, in 2021, Great Wall Motor's operating income was 136.4 billion yuan, an increase of 32.04% year-on-year; net profit was 6.73 billion yuan, an increase of 25.41% year-on-year.

In 2021, Great Wall Motor's R&D investment was 9.07 billion yuan, an increase of 76.05% year-on-year, and R&D revenue accounted for 6.65%.

Great Wall Motor has a global layout of R&D organizations, with 9 R&D bases and 5 major software R&D centers in China, and R&D centers in 9 cities in 7 overseas countries, focusing on the research and development of electrification and intelligence.

In the past few years, the Great Wall has smashed tens of billions of yuan. In the 2025 strategy of Great Wall Motors announced in June 2021, it is proposed that in the next five years, the cumulative R&D investment will reach 100 billion yuan.

In the field of electrification, Great Wall Motor's Dayu battery technology to improve the thermal runaway protection capability of power batteries will be applied in its new energy series models; cobalt-free battery pack mass production and installation; and full-scenario solution hydrogen lemon technology was officially released.

In the field of intelligence, Great Wall Motors' new electronic and electrical architecture based on central computing and regionalization will be launched in China, and the intelligent driver assistance computing platform IDC 3.0 will also be equipped with intelligent driver assistance products released in 2022.

Great Wall Motors will also focus on a number of technical routes such as high-efficiency fuel and hybrid, including 3.0T+9AT/9HAT super powertrain and lemon hybrid DHT.

lucky

In the full year of 2021, Geely Automobile sold 1.328 million units, an increase of about 1% year-on-year, achieving the first annual sales volume of Passenger Cars of Chinese brands for five consecutive years.

Geely Automobile's revenue in 2021 was RMB101.6 billion, an increase of 10.3% year-on-year, and after 2018, it achieved revenue of more than 100 billion yuan again; profit attributable to shareholders after deducting share payments was RMB6.06 billion, an increase of 9.4% year-on-year; and net profit was RMB4.35 billion.

In 2021, Geely Automobile invested 5.5 billion yuan in research and development, an increase of 16.1% year-on-year, and the research and development revenue was 5.4%, an increase over last year. In the past five years, Geely Automobile has invested a total of 25.6 billion yuan in research and development, with more than 20,000 design and development personnel and 26,000 innovative patents.

Geely Holding Group currently has five R&D centers and five major modeling design centers around the world, laying out software self-research, hardware self-research and technical data self-research, building a set of intelligent energy systems in the fields of pure electricity, super electric hybrid, alcohol-electric hybrid and power exchange, and building a full-stack self-developed ecosystem in the core technical fields such as automatic driving, intelligent network connection, and intelligent cockpit.

In 2021, Geely Automobile Group launched the "Smart Geely 2025 Strategy" and "Jiuda Longwan Action", emphasizing that it will continue to increase R&D investment and invest 150 billion yuan in R&D within 5 years; deeply cultivate the field of basic scientific research and build 10 world-class key laboratories.

BYD

In 2021, BYD's total passenger car series cumulative sales of 740131 units, an increase of 75.4% year-on-year. Among them, new energy vehicles exceeded 600,000 units, an increase of 218.30% year-on-year, achieving the first domestic sales of new energy vehicles for 9 consecutive years.

In 2021, BYD achieved operating income of 216.142 billion yuan, an increase of 38.02% year-on-year; net profit attributable to shareholders of listed companies was 3.045 billion yuan.

According to the financial report data, in 2021, BYD's R&D investment was 10.627 billion yuan, an increase of 24.20% year-on-year, and the proportion of R&D revenue was 4.91%; the number of R&D personnel was about 40,400, an increase of 31.52% year-on-year.

The continuous increase in research and development has made BYD have core technologies such as ultra-safe blade batteries, DM-i super hybrid, e-platform 3.0, and IGBT4.0. Up to now, BYD has applied for 32,000 patents and authorized 21,000 patents, ranking first in the list of new energy vehicle patents.

In the battery business, blade batteries, which won the "Global New Energy Vehicle Innovation Technology" award, have accelerated the penetration of lithium iron phosphate batteries in the passenger car field by virtue of their technological advantages such as super safety, super endurance and super strength.

In the semiconductor business, BYD Semiconductor brings together a full range of solutions such as power semiconductors, intelligent control ICs, intelligent sensors, and optoelectronic semiconductors, covering automotive grades, consumer electronics, home appliances and other fields.

Volkswagen

The Volkswagen Group delivered 8.882 million vehicles in 2021, down 4.5% from 9.305 million units in 2020. Despite the decline in sales, the Volkswagen Group's sales revenue increased by 12% year-on-year to EUR 250.2 billion (FY2020: EUR 222.9 billion), and operating profit, excluding expenses for special projects, increased to EUR 20 billion.

The Volkswagen Group has not sacrificed R&D investment while earnings have grown. In fiscal 2021, volkswagen's R&D costs reached 15.6 billion euros, an increase of 12.2% year-on-year, and R&D revenue accounted for 7.6%, unchanged from the previous fiscal year.

According to the plan, from 2022 to 2026, the total investment of the Volkswagen Group will reach 159 billion euros, of which 89 billion euros will be used in the field of electric vehicles and digitalization.

The Volkswagen Group invests heavily in software development and autonomous driving technology, and cariad, the software division of the Volkswagen Group, has successfully integrated Hella's camera software business and cooperated with Bosch to develop L3-level autonomous driving technology.

The Volkswagen Group will invest 800 million euros in an R&D center focused on the development of the SSP platform, where around 4,000 employees will work in the future, and thanks to the new R&D center, the Volkswagen Group can shorten the vehicle development cycle by 25%.

ford

In 2021, Ford sold 3.942 million units, down 6% year-on-year. According to the 2021 full-year financial report, Ford Motor's total revenue for the whole year was $136.341 billion, an increase of 7.23% year-on-year; adjusted EBITDA was $10 billion, and revenue and net profit both achieved year-on-year growth.

As a result of its performance in the transformation of intelligent electrification, Ford shares rose nearly 140% in 2021, becoming the largest gainer among automakers.

According to statista.com, Ford's R&D investment in 2021 was $7.6 billion, accounting for 5.57% of R&D investment. R&D investment was higher than $7.1 billion in 2020 and $7.4 billion in 2019, but lower than $8.2 billion in 2018.

In May 2021, Ford officially released its Ford+ development plan, confirming a full transition to electrification. Among them, it is expected that by the end of 2025, Ford will invest more than $30 billion in the electrification business (including battery development).

According to foreign media reports, Ford Motor is also planning a major restructuring to accelerate the transformation to the electric vehicle business. Over the next 5 to 10 years, Ford will invest an additional $10 billion to $20 billion in addition to the $30 billion mentioned above to convert some of the world's fuel vehicle factories into electric vehicles.