Written /Yu Xiaolong
Editor/Wan Tiannan
The pain of the supply chain pervades the new energy automobile industry.
On May 26, He Xiaopeng, founder and chairman of Xiaopeng Motors, posted on the social platform that with the gradual recovery of the automotive supply chain, the previous problems have improved to a certain extent, but the absolute number of chips for a smart car is more than 5,000, involving hundreds of kinds, many of which are proprietary chips. What is currently missing is actually a cheap chip, not a "expensive chip" that many people pay attention to.
Since entering April, due to many factors such as chip shortage, epidemic prevention and control, and high lithium battery prices, Sales of new energy vehicles in China have turned downward.
According to the data released by the Association of Automobiles, Ideal Automobile, Xiaopeng Automobile and Weilai Automobile, the delivery volume in April shrank by 62.2%, 41.60% and 49.2% respectively month-on-month, exceeding the average figure of new energy passenger cars in the country with a 36.5% month-on-month decline.
The ideal car and Xiaopeng Automobile, which have just released a quarterly report, have also warned that the supply chain challenges brought about by chip shortages may last longer than imagined.
Although all car companies attributed the delay in delivery and the decline in sales to the suspension of parts factories caused by the epidemic prevention and control, and the poor economic environment, this also exposed the shortcomings of the supply chain of "Wei Xiaoli".
"The delay in the pick-up date for the new car has made me suspicious."
Duan Wei (pseudonym), the owner of the Xiaopeng car, told the "Financial Story Club" that the new car pick-up date was delayed from the beginning of 2022 to February, then extended to March, and then called to become April, first the chip was out of stock, then it became a battery shortage, and finally it was the logistics tension caused by the epidemic, "In short, sales are emphasizing various objective factors, and there is no delay in compensation."
The same situation has also occurred in the new car-making forces such as Ideal and Weilai.
On April 9, WEILAI announced on its APP that due to the epidemic, the company's supply chain partners in Jilin, Shanghai, Jiangsu and other places have stopped production one after another and have not yet recovered. On April 10, NIO adjusted the price of some vehicles and the price of battery rental services.
Ideal Auto followed close behind, and on April 20, Ideal released a statement on the delay in delivery, due to the epidemic prevention and control, supply chain enterprises in Jiangsu, Zhejiang and Shanghai could not supply. As a result, the production of the ideal car in April had a great impact, resulting in the delay in the delivery of new cars for some users.
When China's new car-making forces have just secured the market and intend to show their ambitions, they have been hit by the supply chain.
Affected supply chains
In fact, since the outbreak of the new crown pneumonia epidemic in 2020, auto companies, especially new forces, have been deeply affected by the "knotting" of global supply chains.
The earliest outbreak was a shortage of chip supply.
But fortunately, China's auto companies, due to the impact of the Sino-US trade war since 2018, have long begun to prepare in advance, resulting in a chip supply crisis in China's automotive industry, which is much later than the epidemic.
Among them, new car-making forces such as "Wei Xiaoli", due to their relatively small production scale, can still use higher prices to obtain tight chips.
After all, the chip is indispensable for the car, but the cost is not large after all, according to Intel statistics, the current chip cost accounts for about 10% of the vehicle manufacturing cost, and it is possible to increase to 12% in 2025. Moreover, the industry is really in short supply with only one or two key chips.
Therefore, in the face of the first round of supply chain "blows", the impact of "Wei Xiaoli" is not too obvious, but it has won more market space.
In 2020 and 2021, China's new car-making forces have ushered in a spurt of development and expansion.
In 2021, WEIO delivered a total of 91,429 vehicles, an increase of 109.1% year-on-year; Ideal Automobile delivered 90,491 vehicles in the whole year, an increase of 177.4% year-on-year; Xiaopeng Automobile delivered 98,155 vehicles in 2021, almost 3.6 times that of 2020.
However, it is the so-called blessing and misfortune that depends on it. At the same time as the rapid expansion of production capacity, the shortcomings of "Wei Xiaoli" in the supply chain have gradually begun to be revealed.
Especially after entering 2022, with the outbreak of the Russian-Ukrainian conflict and the arrival of interest rate hikes by the Federal Reserve, the international financial order is in chaos. A large number of dollars are frantically pouring into the field of commodities and new energy to hedge.
This time there are more than chips, for a time, the prices of the main raw materials of new energy vehicles are rising wildly.
Taking lithium carbonate, the most important raw material of lithium batteries, as an example, the price of battery-grade lithium carbonate in September 2020 was only 44,000 yuan / ton, and by the end of 2020, it only rose to 55,000 yuan / ton, but by the end of 2021, the price soared by 200,000 yuan / ton, which is close to a historical high.
However, just when the industry thought that this round of price inflation was about to peak, with the tensions in Russia and Ukraine, the arrival of us interest rate hikes, and the global supply chain was once again tense. By February this year, the price of battery-grade lithium carbonate had risen to 450,000 yuan / ton, and the price had doubled again.
The prices of other materials, such as copper foil, nickel metal, stainless steel, electrolyte, diaphragm, plastic and other raw materials, have also risen significantly.
In this regard, The analysts of Lingying Consulting said that the short-term shortage of battery materials and the high price will directly lead to the blow to most downstream battery companies.
In order to cope with the rise in upstream raw material prices, power battery companies including Ningde Times and Guoxuan Hi-Tech had to start reducing production capacity, slowing down shipments, and adjusting prices many times at the same time. Even taking into account the decline in manufacturing costs brought about by technological progress, the price of power lithium battery cells in early 2022 is still more than 50% higher than the overall increase in 2021.
According to the price of juda lithium battery statistics, the average price of China's mainstream ternary power battery packs in 2021 is about 1.2 yuan / Wh, and the average price of lithium iron phosphate power battery packs is about 1.4 yuan / Wh.
A 50% increase in prices means that by early 2022, the average battery cost per new energy vehicle will increase by about 24,000 yuan. Models like the Xiaopeng P7, which have a long endurance and a battery capacity of 60.2kWh, may increase the battery cost by 36,000 yuan. In just a few months, the cost is close to 10% soaring, which is undoubtedly a lot of pressure for the "Wei Xiaoli" who does not have an upstream battery factory.
The shortcomings have begun to appear, and the pain has been hidden for a long time
After entering March, the rapidly rising cost of batteries and various accessories has actually made "Wei Xiaoli" begin to bear weight. Delivery delays continue to occur.
In April, the aggravation of the epidemic situation and the implementation of prevention and control measures in Omicron were even worse, and the supply chain of "Wei Xiaoli" excessively concentrated in Jiangsu, Zhejiang and Shanghai regions was finally suddenly tightened, and delaying the delivery of the car has become a helpless choice for "Wei Xiaoli".
Perhaps at this time, "Wei Xiaoli" really felt the pain of lack of a complete supply chain.
Compared with the traditional large car companies, the supplier alliance of "Wei Xiaoli" is not strong enough, and there are only one or two main automakers that can mass-produce on a large scale.
It is true that "Wei Xiaoli" has long recognized the seriousness of the problem and begun to build its own new vehicle production base and parts base, but compared with the arrival of the epidemic, it is still a little late.
Nio's batteries are mainly purchased in the Ningde era, and the battery system is mainly from Suzhou Zhengli New Energy, a subsidiary of NIO. NIO's vehicle production currently relies on the Jianghuai Automobile Foundry. Weilai's second production base, the Xinqiao Intelligent Electric Vehicle Industrial Park project in Hefei, Anhui Province, is expected to start official production as early as September 2022.
Ideal Automobile is also the purchase of lithium battery packs in the Ningde era, and the production of the whole vehicle initially depended on the oem of Chongqing Lifan Automobile's branch in Changzhou, Jiangsu Province. After the acquisition of Chongqing Lifan in 2018, Ideal Automobile obtained its first vehicle production base of its own. Construction of the second production of ideal automobiles in Beijing's Shunyi District will begin in 2021 and is expected to be put into operation in 2023.
In addition to the battery supply of Ningde Times and Yiwei Lithium Energy, China Innovation Airlines and Sunwoda also cooperate with Xiaopeng. In terms of vehicle production, Xiaopeng Automobile's vehicle production relies on Zhengzhou Haima Automobile OEM Factory and Xiaopeng Automobile's production base in Zhaoqing, Guangdong Province.
Xiaopeng Automobile's second production base in Guangzhou Knowledge City will only start construction in 2020 and is expected to be put into operation by 2023. Xiaopeng Automobile's planned third production base in Wuhan Economic Development Zone will not be mass-produced until around 2024 if it is relatively smooth.
It can be seen that no matter how big the differences in models and operating strategies of "Wei Xiaoli", but there is a common feature, that is, in the supply of lithium batteries, "Wei Xiaoli" is almost relying on order-based procurement.
In contrast, old players have more advantages in the layout of the supply chain. For example, in the shortage of chips, BYD can rely on its own chip factory to be unaffected, and "Wei Xiaoli" must buy chips at a high price.
In the case of soaring lithium battery prices, plus serious shortages, Tesla and BYD can also rely on their own battery factories, or even lithium mines, to "open enough plug-ins" for their new energy vehicles.
In this regard, Mo Ke, founder of the True Lithium Research Institute, said that the current market concentration of automakers is rapidly improving, so in order to ensure their own market supply, they will take the initiative to find more suppliers to share the risk of battery supply. However, for enterprises such as "Wei Xiaoli" with medium scale and lack of supply chain alliances, they can only hope that "lithium" will sigh.
Poor control of the supply chain has exacerbated the difficulty of profitability.
According to the financial report of the first quarter of 2022 released by Xiaopeng Motors. Although Xiaopeng Automobile's revenue in the first quarter of this year was 7.45 billion yuan, an increase of 152.6% year-on-year, after deducting expenses and costs, the company's net loss in the first quarter reached 1.70 billion yuan, an increase of 16.2% year-on-year.
From 2019 to 2021, Xiaopeng Motors has also experienced such embarrassment. In the case of rising operating income year by year, the loss has not been reduced year by year. In 2019, Xiaopeng Automobile's revenue was 2.321 billion yuan, with a loss of 4.643 billion yuan; in 2020, its revenue was 5.844 billion yuan, a loss of 4.890 billion yuan, and in 2021, Xiaopeng Automobile's revenue has reached 20.988 billion yuan, which is nearly 4 times that of the previous one, but the loss still reached 4.863 billion yuan.
"Wei Xiaoli" is "making up lessons"
Now, the challenge has hung high in front of "Wei Xiaoli".
With the changes in the world economic structure, the turbulence of the international financial market, and the continuation of the epidemic, the problem of "knotting" in the supply chain may be difficult to alleviate in a short period of time.
At the same time, competition from old and new auto giants will become more and more intense. "Wei Xiaoli" is facing the situation of Tesla and other traditional automobile companies transforming to new energy.
In this regard, as early as 2020, He Xiaopeng, the founder of Xiaopeng Automobile, said that in the next 12 months, the new domestic car-making forces will suffer a serious blow from Tesla, and only one or two can survive in the end.
Although the actual situation is much more optimistic than He Xiaopeng's original prediction, under the epidemic, the "knotting" of the supply chain has once again sounded the alarm bell for China's new energy automobile industry.
In the case of the same surge in battery prices and the "knotting" of the supply chain, Tesla's operating income in the first quarter of 2022 still achieved a year-on-year increase of 507%, and the net profit increase reached 658% year-on-year.
High growth is inseparable from the support of Tesla's global supply chain.
First of all, Tesla's global procurement and global sales model can hedge risks such as the epidemic. When one country is in a downturn with the market, or the supply chain is "tied", Tesla can turn to the markets and suppliers in other countries for help.
This time, Tesla's factory in Shanghai was forced to stop production due to epidemic prevention and control. However, Tesla still has major automakers in the United States and Germany in production.
More importantly, Tesla has actually achieved a high degree of binding with the entire supply chain system from the beginning.
Taking batteries as an example, Panasonic, as an international lithium battery giant, is not only Tesla's battery supplier, but also cooperates with Tesla to build a super battery factory in Nevada, USA.
In terms of equity relations, Panasonic once held nearly $3.6 billion in Tesla's shares, forming an alliance of interests that lose both losses and prosperity.
On the surface, Musk has been "screaming" all day long, but in fact, from the beginning of Musk's creation of Tesla, he knows what is the "lifeblood" of new energy vehicles - lithium batteries and a complete supply chain. In this sense, Tesla's rise is not just about model innovation and CEO delivery.
At the end of the day, completing the supply chain is not a one-off effort.
The new forces of Chinese car manufacturing that have just started have not yet had time to integrate the whole supply chain after completing technology integration, brand recognition, quality improvement and capacity expansion.
This is also the pain that all players must experience, before establishing a relatively complete supply chain and finally achieving profitability, Tesla has also faced a runaway cost, falling into losses for more than ten consecutive years, and has also experienced the suffering of a global chip shortage.
Of course, the young "Wei Xiaoli" are also paying close attention to making up lessons. For example, in the in-vehicle electronics, battery technology, and vehicle production bases, we are gradually increasing investment to make up for the shortcomings of the supply chain, and embark on the ultimate track of full supply chain competition with global auto giants.