This article is from the WeChat public account: Cheshi Monogatari (ID: autostinger), author: Peng Fei, the original title: "Weilai's "three children": in Europe, where is the heart? The caption is from: Visual China
"NIO is planning to launch a third car brand, 'Firefly', the core of the team has been set up, and the parts are almost finished." Nio insider Shi Jie (pseudonym) told Cheshi Monogatari, "Its R&D team in Hefei will operate independently like NIO and Alps." The difference is that fireflies were only sold in the European market in the early stage. ”
If you turn the time back to August a year ago, it is not difficult to find traces of "fireflies". At that time, Li Bin, CEO of Weilai Automobile, led a team to visit Wuling and test-drove Wuling's latest new energy model, Baojun KiWi EV.
Li Bin praised the originality, sense of technology and futurism of KiWi EV, and even started the sale of Baojun: "The owners of Weilai Automobile, if the second car of the family should be a product like KiWi EV, fashionable, young and fun." ”
Perhaps at that moment, Li Bin planted a seed in his heart and wanted to build a national car like Wuling. At that time, Weilai had just revealed its plan to set up a "Alps" sub-brand, and Li Bin's trip to Wuling caused a lot of speculation that Weilai's "sub-brand" was going to grab Wuling's cake.
However, with the surface of "Alps" and the sub-brand that Li Bin personally stated that "it will not enter the market segment of Wuling Hongguang", the suspicion of the outside world was dispelled.
Now it seems that Li Bin will not run to Wuling for no reason to do research. It is reported that Weilai's firefly will cover the low-end market of 100,000 to 200,000 yuan, but it will stagger the fiercely competitive domestic market and go to the European market to sell.
At the moment of the rapid development of new energy vehicles, in order to expand market share, car companies have launched multi-brand is not a new thing. But when the second brand Alps is not yet ripe, it is necessary to hastily launch a third brand, and it is a European market with double difficulty, what is the deep meaning behind Weilai's move?
Weilai 'put down his body' for the second time
In terms of strategic play, WEILAI Automobile basically copied Tesla's thinking, the first model is a high-end supercar, core technology reserves and establish a brand image, and then extends to luxury models and the high-end market.
However, Tesla faces the high-end and low-end market with a single brand, and WEILAI Auto has chosen a ladder matrix similar to the "Audi, Volkswagen, and Skoda" within the Volkswagen Group, with 300,000, 200,000 and 100,000 as the watershed of the three sub-brands.
Li Bin believes that a brand can carry a limited price band, and then launch a more affordable model, it needs to start another stove.
NIO was once the head of the new forces and has had many highlight moments in the past two years. This is closely related to its own high-end route, just stepping on the development momentum of the new energy market "two large, small in the middle", the competition of fuel vehicles in this range is not sufficient, and Weilai has a certain living space.
But now, the mid-range market of fuel vehicles, which was once the most fiercely competitive, is being rapidly opened by new energy vehicle brands. New forces, including Zero Run and Nezha, have recently achieved good results, which is what Weilai lacks and "envies".
As early as the 2020 earnings report meeting, Li Bin revealed that "entering the mass market is NIO's long-term strategy". Doing Alps is the first time that Weilai has lowered his body, and being a firefly is the second time he has lowered his body. This is not surprising, because no matter how the automotive industry changes, scale is always the most fundamental competitiveness.
I just didn't expect that the third brand would bypass the Chinese market and attack the European market. "Now the domestic low-end new energy vehicle market is the hardest hit area of the price war, and it is difficult for Weilai to kill a road in this red sea, but Europe is different, it is still a blue ocean." Schjie explains this.
In the European market layout, Weilai can be described as the vanguard of new forces. In May 2021, NIO officially announced the "Norwegian Strategy", which plans to deliver 7,000 ES6 and ES8 vehicles in Europe within two years. But unfortunately, a year and a half has passed, and there has not been much improvement.
According to the data, in 2021, NIO only sold 200 ES8s in Norway, compared with 550 units in the first seven months of 2022, ranking only 35th in the sales list of pure electric models.
Sales were frustrated, mainly because NIO's existing product line was not suitable for Europe. Chinese consumers pay more attention to high-endurance, high-intelligence electric vehicles, while Europe is small, battery life is not so important, driving a car suitable for their own car scene.
The European market has always been dominated by small cars and compact cars, even in the pure electric vehicle market, small cars are still the main theme of Europe, such as Volkswagen ID.3 and Renault ZORE. The ES6, ES8, ET5, et7 are medium-sized, medium-sized and large-sized cars, and have not established a certain brand identity, which is difficult to open the European market.
If it is a firefly, Weilai may have a chance to break through. First of all, the concept of European car companies is more conservative, like Volkswagen, Stellantis, BBA these old car companies are not good at intelligent technology, but it does not mean that Europeans have no demand for intelligence, market education is subtly affecting users, early years ago was ridiculed by people on the screen and multi-screen, the recent BBA car companies are also following suit.
Volkswagen ID.3 (Source: Autohome)
It is understood that the Firefly model will support power replacement, equipped with L2+ level assisted driving, compared with the existing mainstream models in Europe, the intelligence of the Firefly is one of its advantages.
Secondly, Firefly can also adopt the BaaS solution in the European market to further reduce its price, ideally, the volume can help WEILAI open up the situation in Europe faster.
In terms of localization, NIO has begun to build a factory. Li Bin once expressed concern about the cost of building a replacement power station in overseas markets, "If in the long run, there are more replacement power stations deployed in Europe, the replacement power station should also consider local production, and the transportation cost is indeed quite expensive." ”
Source: WEILAI official
Because of this, NIO recently announced that the NIO Energy Europe plant invested and built in The Hungarian state of Pest will be put into operation in September. Covering an area of about 10,000 square meters, NIO Energy's European plant is the first plant built by NIO overseas, as well as a European manufacturing center, service center and R&D center for NIO power products.
Previously, the actual actions that Weilai showed in Europe were far less than desire, but now it seems that Weilai is going to move in real character.
"A man with a red gun shouts"?
The European electric vehicle market is currently undersupplied. In May 2022, Volkswagen revealed that the order quota for new energy vehicles in Europe and the United States in 2022 has expired.
However, even if the prospects of the European electric vehicle market are good, Weilai's road ahead will not be smooth.
Want to break into the low-end market, behind the need to have the advantage of cost performance and delivery volume to keep up, and since last year, Weilai has been due to the epidemic, lack of core, power battery shortage, and even factory transformation and other reasons, resulting in a capacity crisis, no car to deliver.
Source: WEILAI official
Corresponding to the above news, at the 2022 WEIO Partner Day held a few days ago, Li Bin directly called "please resist the partner", because ET7 was originally planned to step up to a new level in July, but because of the insufficient supply of die castings, the production in July was reduced by thousands compared with the plan.
According to Shi Jie, Weilai's two new brand models will also use integrated die-casting technology, such as the subframe. "At present, the production capacity of the subframe cannot be discharged at all."
"If Weilai's delivery volume cannot be raised, it will be even more difficult to do the low-end market in the future." Auto analyst Wang Le (pseudonym) said of the car market monologue. It can be said that in the short term, Weilai has been overwhelmed in the domestic market, and it is difficult to free up part of its production capacity to transfer to the European market.
Although it is easy to sell cars on a large scale, the premise is that car companies must have strong supply chain cost control capabilities, which is not a specialty of Weilai.
Judging from the existing traditional car brand in the 100,000 yuan level market, such as Euler Good Cat, BYD Dolphin, etc., the basic strength is not bad. There are two factors behind this, one is that the Great Wall and BYD have their own production plants, and the battery is self-sufficient, which can better control the cost; The second is the scale of the enterprise itself, a 1 million annual sales of the enterprise and a 100,000 annual sales of the enterprise, in the supplier to negotiate the cost of procurement, the chips and bargaining power is different.
The reason why the price of Wuling Hongguang MINI EV can be pulled down is also due to the support of its huge sales scale. After learning for a while, Changan New Energy could not hold up after the pressure of recent price increases by materials and suppliers, and suspended the order for the National Edition of the Ben E-Star model.
Looking back at Weilai, the current OEM production by Jianghuai Automobile not only needs to pay high OEM production costs, but also tends to be slow in iteration. Even if the BaaS solution can reduce the price, there is some uncertainty about whether it can open up the situation overseas.
Source: WEILAI official
For example, even the domestic Wuling Shenche, which is known for its cost performance, has arrived in overseas markets, and because there is no large-scale localization support, the cost of the vehicle cannot be compared with China, so it has to be difficult to "attack upwards".
"Weilai lacks scale effect and system capabilities, and the strength comparison with mainstream European car companies, Weilai is like 'one person holding a red gun to call the battle, and the other party is a modern and complete defense system'." Wang Le said.
In addition, the domestic and foreign environment is different, can Weilai's business model work well? All of this may have to be a question mark.
Li Bin is well aware of the difficulties behind it, he once said in the release of the Norwegian strategy, internationalization is a particularly difficult thing, not so easy, the difficulty is certainly more than an order of magnitude more difficult than in the Chinese market, but the most difficult things always have to be done by someone. ”
Losing money every year, can the "three children" be raised?
At present, the structure of the new energy vehicle market is rapidly changing from dumbbell shape to pyramid shape, and it is a necessary move for Weilai to launch a low-end brand, through the considerable central region, and then share the cost of research and development, manufacturing and other aspects, and further optimize the financial statements.
However, in Weilai, there are very few sharing systems that can be seen. Due to body size limitations, Firefly will not use NIO's existing platform to develop, but will create a new platform for separate development. "Both Firefly and Alps are platforms that are incompatible." Shi Jie said.
Not only the platform, but also the substation, which operates independently between their respective brands. "At present, the 5678 model of the Nio brand uses the first and second generation replacement power stations, and the future Alps and Firefly cannot use the first two generations to replace the power station." Shi Jie said frankly, "The third generation of replacement power stations is being planned. ”
This also means that more than 1,000 substations built by WEILAI in the early stage may face renovation or reconstruction. It should be known that the construction cost of Weilai's single substation was about 2 million yuan, "under the investment of such heavy assets, Weilai should achieve breakeven or a paradox." Another industry insider said this.
Not to mention nio's two new brands, one in the Chinese market, one in the European market, NIO adopts the replication model, the product, direct sales, NIO House, power exchange, service center, all copied. Compared with other Chinese brands, NIO has invested much more capital.
Source: WEILAI official
If you refer to BYD, it will enter the European market at about the same time as Weilai, but at this time, the pace of Weilai has been relatively backward.
In May 2021, BYD announced its cooperation with the Norwegian distributor group RSA to enter the Norwegian market; In August of that year, the BYD Tang EV began to be delivered in Norway. Data website elbilstatistikk shows that the number of BYD Tang EVs in the Norwegian market in 2021 is 1067. In the first seven months of 2022, Tang EV sold 1125 units in Norway, while NIO sold only 550 units.
A person familiar with BYD's European business said that new brands entering new markets still need to rely on local channels, otherwise it is difficult to open up the situation. In addition to the launch of the high-end model Tang EV in the European market, BYD will extend further in the future.
In addition to fighting with overseas mainstream brands, Firefly and BYD will also have a battle. "For now, IFL wants to achieve the scale of BYD, whether it is a domestic or European market, it will not be possible in the short term." Wang Le said.
Previously, Weilai's "high-end" was almost all burned by burning money, and while shaping the brand image, it had to face huge losses. Weilai, which has been established for 8 years, has still not achieved profitability. In 2021, NIO's net loss reached 4.02 billion yuan and cash reserves of 55.4 billion yuan. In the first quarter of this year, NIO's net loss was 1.78 billion yuan, and its cash reserves shrank to 53.3 billion yuan.
In the context of the sharp increase in the pressure of the parent brand, the stagnation of sales and the difficulty of profitability, entering the low-end market means burning more money, taking greater risks, and losing billions of Dollars every year.
The above-mentioned people believe that "with Weilai's current ability, it is not enough to support 3 brands." If you want to do it, it is best to rely on external alliances, such as integrating Wuling resources and opening up the European market situation, which is good for increasing sales. But this seems impossible internally to Weilai, "Weilai has money, and it needs to tell capital stories more." ”
At Weilai's 2021 financial report, Li Bin mentioned that it will achieve breakeven in 2024. Judging from the production nodes of the two sub-brands, Alps will be mass-produced in 2024, while Firefly is expected to be in 2025 at the earliest. Since it takes a certain amount of time for production capacity and sales to ramp up, NIO needs to continue to transfuse blood for at least two new brands for up to 3 years.
Weilai, which is still in the "primary school student" stage, in addition to continuing to "self-struggle" at the level of research and development, production, channels, etc., also needs to breed two more "babies" and tell new stories to the capital market to obtain more resource support.
However, whether this story can be told beautifully depends on Li Bin's conception and eloquence on the one hand, and on the other hand, it also depends on the development trend of new energy vehicles in China and the world. NIO has repeatedly stressed that it is necessary to be friends with time, but for all startups, the window of time is not unlimited.
This article is from the WeChat public account: Cheshi Monogatari (ID: autostinger), author: Peng Fei
This content is the author's independent view and does not represent the position of Tiger Sniff. Unauthorized reproduction is not permitted, please contact [email protected] for authorization matters
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