Independent Scarce Penetration
Butterfly changes sometimes, the road is long and long!
Author: He Leyi
Editor: Li Jing
Wind product: Shen Heche one
Source: Rhodium Finance - Rhodium Finance Research Institute
Nearly two years after stepping out of the "ICU", Weilai and Li Bin seem to be facing another big hurdle.
In terms of performance, the net loss in 2021 exceeded 4 billion, which was lower than market expectations. The annual sales of 91429 vehicles, although an increase of 109.1% year-on-year, have been overtaken by Xiaopeng and lost the new car-making forces. Entering 2022 is still not optimistic, the first quarter ranking slipped to fourth; in March, sales fell to fifth, even less than zero-running cars, has a brother been left behind?
At the stock price level, the US stock market fell by 40% in 2021, and has shrunk by 30% so far in 2022; the Hong Kong stocks that have high hopes are also in a state of breaking, and the pressure of "100 billion bets" is what?
At the product level, the suspension of production was announced on April 9; the price increase was officially announced on April 10, how stable are the fundamentals?
I can't help but ask, what is wrong with Weilai?
01
What is the price increase and the suspension of production again?
LAOCAI
According to the Statistics of the Economic Observer, since March this year, about 20 new energy vehicle companies have announced price increases, involving nearly 40 models, all of which involve rising battery raw material prices.
"Weilai does not increase prices, at least not yet." On March 21, Qin Lihong, president of WEILAI, said so.
On March 25, at THEO 2021 performance meeting, Li Bin reiterated his view of not raising prices. At that time, many consumers called their conscience righteous.
Where's the bottom line? Li Bin said that because it will share the pressure of rising raw materials with the industrial chain, the scale effect of sales will also share the cost.
Strength shows muscles, throwing sound, but "punching the face" comes quickly.
On April 10, WEIO issued the "Product Price Adjustment Instructions", saying that due to the impact of the global price increase in raw materials, the prices of its products will be appropriately adjusted from May 10.
The starting price of ES8, ES6 and EC6 models will be raised by 10,000 yuan, and the starting price of ET7 and ET5 will remain unchanged.
To be fair, the above instructions belong to the preview version, giving users a buffer period, and Weilai products are mostly high-end sequences, compared to Xiaopeng and Zero Run, the increase of 10,000 yuan is not large.
It's just, where is the scale effect of the good? Suddenly stop production, change mouth and increase prices, what is the short board of Weilai's supply chain? What is the core strength?
"Inconsistent", can only say that Weilai is also difficult.
April 9, the day before the price increase. WEILAI announced that due to the impact of the epidemic, some supply chain partners have stopped production one after another, and the production of WEILAI vehicles has been suspended.
It is difficult for a woman to cook without rice. The suspension of production and the undecided time of resumption of production mean that Weilai has been forced to press the "deceleration button".
Li Bin was also helpless, "A car is not a part that can be produced." "Affected by the epidemic in Changchun and Hebei, we cut off some parts in mid-March, relying on some parts inventory to barely support the listing." Recently, there have been epidemics in Shanghai and Jiangsu, and many partners cannot supply goods and can only suspend production. ”
The resulting loss is self-evident. According to the previous performance meeting, the production line of JAC Weilai is upgrading its production capacity to 60JPH and is expected to be completed in the middle of the year. In other words, every day of production is discontinued, hundreds of vehicles are lost in capacity. The resumption of production is undecided, and the time cost is more difficult to estimate.
Of course, the dilemma brought about by the epidemic is not only Weilai.
According to the report of the Association of Automobile Manufacturers, the average daily retail sales of major manufacturers in the third and fourth weeks of March were 35,000 units and 39,000 units, respectively, down nearly 30% year-on-year, and the market performance was more abnormal than that of the same period.
Industry analyst Li Chen said that with the rise in raw material prices and the zero disruption of the supply chain by the epidemic, it has brought a lot of challenges to car companies, even if it is as strong as Tesla, it has not been spared, and "ensuring supply and stable prices" has been the key to the efforts of car companies in 2022.
From this point of view, the price increase is also forced. "Raw materials, especially battery raw materials, have risen too much this year, and I can't see a downward trend in the near future, I originally wanted to carry it, the epidemic situation is even more unbearable, and the price increase is also forced to be self-imposed, please understand."
Indeed, understandably. But it is still impossible to avoid a soul question, is the epidemic just a trigger? Putting aside the scale effect, why not Xiaopeng, Ideal, zero run, but Weilai took the lead in stopping production?
02
Strong chain replenishment Anti-fragility force increase
LAOCAI
As early as February of the beginning of the year, Qin Lihong, president of Weilai, said: "I said that this year's delivery target is not counted, the supply chain is decided, and how much production is paid." ”
From large countries to small enterprises, the control of industrial chains and supply chains is the ultimate competition.
Huang Wei, fund manager of Huahui Chuangfu Fund, said, "In the face of the shortage of chip supply, we pay more attention to car companies with a clear product matrix and positioning and can achieve a good layout in the field of new energy vehicles, especially in independent brand car companies with good reserves in electric technology and products. ”
In the end, the complex environment is also a touchstone, and enterprises must speak with the hard power of the industrial chain.
The good news is that on April 14, the relevant person in charge of Weilai revealed that the supply chain recovered slightly, and the Hefei production base began to gradually resume production. However, the follow-up production plan also depends on the recovery of the supply chain.
Where there is a pause, there is a resumption, and the crisis will always pass. However, the hidden dangers and shortcomings exposed should not be easily let go.
This is not the first time that Weilai has stopped production, and it has been a long-term dimension, which can be described as a bitter supply chain for a long time.
On March 26, 2021, NIO lowered its delivery forecast: from 20,000 to 20,500 units expected in the first quarter, to 19,500 units. From March 29, it also suspended production at the Hefei Jianghuai Automobile Plant for five days. It has become the first new car-making force in China to stop work due to lack of cores.
In September 2021, with the chip problem again, WEILAI adjusted its delivery target for the third quarter to 22,500 vehicles to 23,500 vehicles. Compared with the sales target of 23,000 to 25,000 units given in the second quarter financial report, it was lowered again.
How this suspension will affect the delivery will take time to answer.
To be sure, the re-suspension of production obviously cannot be explained by coincidence alone. Why does NIO always get hurt? How much is antifragility? What is the core competitiveness? How urgent is strong chain replenishment? Are the fundamentals stable enough?
I have to mention the production model.
Whether it is Tesla, or Xiaopeng, Ideal, Nezha, they have built their own factories. Weilai started from OEM, and even if it currently builds a new factory, it also chooses a manufacturing cooperation model. Li Bin once revealed that Weilai's cooperation method in planning the second factory is still manufacturing cooperation.
Industry analyst Hao Rui said that whether it is OEM or cooperation, there are advantages such as light cost and flexible strategic space, but compared with self-construction, there is also a voice and incomplete control, thus leaving a short board hidden danger in quality control risk control, industrial chain and supply chain coordination.
Alarm bells have been raised. In October 2021, WEILAI's deliveries plummeted by 60% month-on-month, and the factory rhythm was out of tune as a consideration. The decline in sales rankings in 2022 and the suspension of production of complete vehicles also highlight the urgency of strong chain replenishment, robustness and anti-risk improvement.
How do you find certainty in uncertainty? Looking at the industry, many car companies are increasing the layout of upstream resources.
Musk said that Tesla may directly enter the mining and refining field (lithium ore) on a large scale; Volkswagen announced that it has signed a strategic cooperation with Huayou Cobalt and Tsingshan Group to jointly form a joint venture to invest in Indonesia's nickel and cobalt resource business.
What about Nio?
At the end of February 2022, some media broke the news that Weilai has initially built a mobile phone business department and is ready to build a mobile phone across borders, and Yin Shuijun, the former president of Meitu Mobile Phone, will lead the mobile phone business, and the team is in the recruitment stage.
Li Bin said that it is still in the research stage "The most direct reason is to improve the user experience, and the more important motivation behind it is strategic defense." "Apple is now very closed to the automotive industry, such as the second generation of Weilai platform car standard UWB (Ultra Wide Band, ultra-wideband wireless communication technology), Apple does not open the interface, making us very passive."
Although the construction of the ecosystem is important, the corresponding investment in resources, funds, talents, technology, time and so on is also amazing, and how difficult is it to expand across borders? What are the risks? Moreover, this ecological pie tests the industrial chain and supply chain.
Go around and back to the foundation of development. Which is lighter and heavier, which comes first, is it necessary to abandon the original and the end?
"Focus on getting the car right, think about what to do?" Some car owners said so.
Before running, first walk steadily. The steps are too big and easy to pull the crotch.
03
Profit Ambition What does it take to turn around a loss?
LAOCAI
A journey of a thousand miles begins with a single step. I have to say that new energy vehicles are big business, but they are not an easy business. Strong innovation, strong iteration, strong competition, highlighting the importance of focusing on the profession, the foundation must be laid first.
Li Bin once said that the key word for Weilai in 2021 is "preparation".
In other words, for the sake of long-term layout, WEILAI can ignore short-term poor performance.
At the 2021 results conference, Li Bin made two commitments. In addition to "no price increases", specific market expectations have also been clarified: the time point of turnaround into profit appeared in the fourth quarter of 2023 and achieved profitability throughout 2024.
Looking at their own deficits and external competition, this is not an easy task. How to prevent breaking your word again?
There are no more than two directions: open source or throttling.
Looking at the industry, the first half of the electrification of new energy has passed, and the intelligent threshold of the second half is higher, and it is indispensable to build barriers for real money and silver.
Well, the only way to turn around is nothing more than "open source".
There are two more dismantlings: one is to sell more cars, and the other is to increase gross margins.
First of all, the importance of sales to new energy vehicle companies is self-evident. Take Tesla as an example, that is, by increasing market sales and proportion, the scale effect has been used to achieve a turnaround profit.
And the sluggish sales are also one of the heart diseases of Weilai.
In July 2021, NIO lost the title of the champion of new car delivery of new power brands for the first time; in 2021, NIO's new car delivery was surpassed by Xiaopeng Automobile for the first time.
Entering 2022, the decline in sales is more obvious. In March, NIO delivered 9,985 new vehicles, an increase of 37.6% year-on-year; in the first quarter of 2022, NIO delivered 25,800 new vehicles, an increase of 28.5% year-on-year.
Sales met expectations, but the growth rate was even stronger, causing Weilai to fall out of the first echelon: Xiaopeng Automobile delivered 34,600 units in the first quarter, an increase of 260% year-on-year; ideal car delivery of 31,800 units, an increase of 152.1% year-on-year; Nezha Automobile sales of 30,200 units, an increase of 305% year-on-year. Even zero run broke through 10,000 in March, surpassing Weilai.
How did the former leading brother come to this point?
In addition to supply chain waves, some flaws in the empty window period of new products in 2021 are also considered. For example, the autonomous driving storm, the fermentation of fan culture series events, etc.
Look at the gross profit margin that Li Bin has been thinking about.
For the whole year of 2021, the gross profit margin of WEILAI vehicles was 20.1%, which is a big improvement compared with 12.7% in 2020, which is worthy of recognition.
Li Bin proposed at the conference call that the "gross profit margin of 18-20%" should be maintained in 2022.
I have to say that Weilai's high-end route is ushering in a fruitful period. However, there is still room for improvement in this number. There is still a big gap from Tesla's 30.6% bicycle gross profit margin, and even slightly lower than the ideal gross profit margin of 21.3%.
At the same time, the supply chain examination that began in 2022 also allowed Li Bin's annual goal to enter the hard mode.
Futu Securities pointed out that the rise in lithium prices this year will lead to a significant increase in THE cost of WEIlai and a sharp decline in profitability.
Huatai Securities also said that the rise in batteries and raw materials will have an impact on WEILAI's profit margins. Weilai did not want to increase prices before, but hoped to stimulate the scale to share costs to offset the pressure brought by the rise in raw materials and batteries and maintain a high gross profit margin.
However, the sudden suspension of production broke the scale expectation and exposed the shortcomings. After the price increase, it is bound to add some pressure to sales.
04
New products hope for efficiency thinking
LAOCAI
Whether the promise of full profitability can be achieved will be seen in two years.
But what is certain is that under the pressure of the target, Weilai needs to accelerate and run.
In the end, it is the product that speaks.
NIO said it expects to release the 2022 ES8, ES6 and EC6 in late May. Among them, NIO ET7 and ET5 are positioned as sedans, and the ES7 is positioned as a large five-seat SUV.
It is not difficult to find that the new product portfolio undertakes the heavy responsibility of opening up new markets and improving the product matrix.
Among them, the price of ET5 has dropped, and it is the cheapest model under Weilai. The PRICE OF ET7 (starting from 366,666 yuan) using the BaaS solution also enters the price range of Xiaopeng P7 (239,900-429,900 yuan).
In addition to the price, Weilai said that the 2022 model will make major upgrades to smart hardware, including 8155 chips, 360 surround view cameras and 5G modules, and the performance will be greatly improved.
At the same time, NIO's new brand team for the mass market has been formed. According to the financial report meeting, Li Bin said that the research and development of the first batch of models has entered a critical stage.
There is no doubt that WEILAI is ushering in a long-overdue "product year".
Huaxi Securities said that IT is expected to sell 193,000 vehicles in 2022, and the replacement of existing models and ET5 will enter the volume market, and it is expected to enter a stronger product cycle in 2023.
Can you go any further?
Objectively speaking, there is a certain degree of confidence. Looking back at Weilai, as a brother, he has created a series of impressive achievements:
The earliest to achieve 50,000 mass production vehicles; the earliest cumulative delivery of 100,000 vehicles; the first to launch a power exchange model; the first to implement the separation of vehicle and electricity to buy a car model; the first to release battery rental services...
"Why are we so fast in every aspect? Because a lot of the capital investment of Weilai Automobile is used to buy time. ”
In the past four years, WEILAI has invested more than 15.5 billion yuan. Li Bin said that under the current operating situation that gross profit can cover sales management fees, NIO will continue to increase investment in research and development in the next few years.
Indeed, continuous real investment is an important consideration for Weilai to win the first-mover advantage.
However, the rapid increase in other costs is also worth vigilance.
In 2021, NIO's sales, general and administrative expenses were 6.878 billion yuan, an increase of 74.9% year-on-year, much higher than Xiaopeng and the ideal of 5.3 billion yuan and 3.4 billion yuan.
Such a high increase in investment, still lose the crown. Should WEILAI think efficiently and operate more refined?
Asking questions is not demanding, the challenge is the same.
Industry analyst Li Chen said that although there are new products to hope, WEILAI is still under pressure in terms of production capacity. Nio will achieve mass production of five models in a factory at the Hefei Jianghuai Foundry, and the requirements of the flexible production line can be described as very high. Even a gigafactory as strong as Tesla only produces up to three models, and the quality control is not perfect, and it is often complained about by users.
Browsing black cat complaints, car quality network, Weilai related quality complaints are not uncommon, what kind of answers will the new products hand over?
05
Hundreds of billions of bets and moments of competition
How much is the butterfly change?
LAOCAI
Of course, stress is motivation.
Dare to give a profit schedule, in itself is a kind of bold determination, strength, responsibility of the embodiment.
As of December 31, 2021, NIO had a cash flow of RMB55.4 billion. Sufficient capital reserves to leave more room for long-term layout for enterprises.
On April 18, 2022, Weilai Replacement Power Station Nanjing Jiangning Auchan was officially launched. Compared with the first generation, the second generation of Weilai replacement power station can realize the automatic parking of vehicles, users do not need to get off the car, a key to start the self-service power exchange, the power exchange only takes 3 minutes. And the capacity of the second-generation replacement power station has been raised to 1250KVA, the number of batteries is 13, and the single-day service capacity has reached 312 times, and the efficiency experience has improved significantly.
Public information shows that WEILAI has built a total of 900 substations across the country, and users have changed electricity more than 8 million times. In 2022, a total of 1,300+ substations, 6,000+ supercharge piles, and 10,000+ destination charging piles will be built in the Chinese market.
Needless to say, Weilai and Li Bin are also strengthening the chain, strengthening refined operations, building characteristic competitive barriers, and improving user experience. All kinds of efforts are worthy of recognition.
It also has to be more professional and more efficient.
In addition to full profitability, there is also a "100 billion bet".
In February 2020, NIO received 7 billion yuan of investment from the Hefei government and also signed a VAM agreement: revenue of 14.8 billion yuan in 2020 (listing 3 models), revenue of 120 billion yuan in 2024 (listing 6-8 models), total revenue of 420 billion yuan from 2020 to 2025, total tax revenue of 7.8 billion yuan, and listing on the Science and Technology Innovation Board by 2025.
Based on the revenue of 36.14 billion yuan in 2021, to achieve revenue of 120 billion yuan in 2024, WEIlai must more than triple in three years.
Come to think of it, it is also the reason why Weilai vigorously promotes the new. Just look at the sales volume and supply chain status, how difficult is it?
In Rhodium Cai's view, Weilai is currently at a difficult competitive node. The contradictions faced by the growth of enterprises have also changed. The stage of survival has passed, and the scale effect is a new consideration.
Whether it can pass this hurdle and this critical period of competition determines its short-term completion of 100 billion bets, long-term sitting in the front-line camp, and finally turning the cocoon into a butterfly. This is followed by refined operation, strong industrial chain, supply chain support, core technology breakthrough, quality power, ecological empowerment and other comprehensive polishing.
How much is the difference between Weilai and Li Bin? Butterfly changes sometimes, the road is long and long!
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