In the new energy vehicle rivers and lakes, there may not be any cooperation between enterprises that can have the influence of industry and capital like theirs.
They are Huawei and Cialis (formerly known as Xiaokang Shares, 601127.SH), and the AITO jointly created by the two has become a golden signboard of new energy vehicles, and the limelight is unmatched.
According to the author's understanding, it took only 9 months from the launch of the product to the first monthly risk volume (real sales) exceeding 10,000, which is the fastest new energy vehicle brand in China to break through (monthly) 10,000 risk. It took 24 months for Li Auto to achieve this goal, 34 months for Xpeng Motors, and 40 months for NIO.
In addition, less than a year after the official delivery of the Cialis series, more than 78,000 units have been sold, while the sales of "Wei Xiaoli" in the first year of the new automaker are only 11,348 units, 16,608 units, and 32,624 units, respectively; In the first year, the sales volume of the series has exceeded that of Wei Xiaoli, and it can be called the fastest growing new energy vehicle brand.
However, more than 1 month ago, there was news in the market that "Huawei R&D personnel withdrew from Cialis and the relationship between Huawei and the company changed", which caused the stock price of Cialis to fluctuate sharply.
A few days later, the two sides released rumor-refuting information, and Cialis officially said, "The company's long-term in-depth cross-border cooperation with Huawei and the cooperation model have not changed." Huawei Yu Chengdong also said that Huawei's investment in Cialis has not decreased, but is increasing, and emphasized that in the smart selection mode, the biggest benefit must be the earliest, deepest accumulation, and richest product models with Huawei.
Even on February 25, Cialis and Huawei signed a joint business deepening cooperation agreement to launch a new platform for the future. It is reported that the first flagship model under the new platform is scheduled to be released in 2023, which will be equipped with a high-end intelligent driving system, and a number of new models will be launched in the future. It is worth noting that at the signing ceremony, Cialis revealed that the company's joint business goal is to achieve the production and sales of new energy vehicles to reach 1 million units in 2026.
However, in early March, someone noticed that the logo in the upper right corner of the AITO official Weibo post had become HUAWEI, and before that, the position of the logo in the upper left corner of the poster was AITO.
Some people speculate that the previous "Huawei deep empowerment" was changed to "Huawei fully dominated".
What really worries the market is that once Huawei is lost, can Cialis still create a sales miracle?
Of course, there are also people who think that "it is not Cialis that needs Huawei, but that Huawei needs Cialis". Its core logic is that "the variable of whether the 'Cialis model' can go through is actually in the car factory itself - (car companies) have determination to transform, work efficiently, and have confidence in partners."
In order to understand the real relationship between the two, the 24 Chao team sorted out the development history of Cialis (formerly Xiaokang) in detail, and statistically analyzed its core data and changes such as R&D investment, sales channel construction, profitability, and changes in the market competition environment, and found that under the new competition in the industry and under the pressure of profitability, the relationship and trend between the two are undergoing new changes, and the situation may be more complex and severe than we imagined.
In this regard, investors must not be observed, of course, this article is only a family statement, does not constitute investment advice, but also welcome readers and friends to correct, and even criticize.
The mountain city of Chongqing, a "8D magic" metropolis rising from the mountains, rugged and winding mountain roads, forced alleys, gave birth to an army of motorcycles, but also gave birth to many well-known motorcycle companies, Jialing, Zongshen, Lifan, Loncin and so on have risen one after another.
At the same time that these motorcycle giants grew wantonly, an inconspicuous company at that time was also developing low-key.
In 1986, Zhang Xinghai took out the only 8,000 yuan in his pocket and founded Ba County Phoenix Electric Spring Factory to produce bicycle springs for military enterprises.
At that time, at the cusp of the era of "military to civilian", refrigerators, color TVs and washing machines were called the "three major wedding pieces" in the 80s. However, the key component of the fully automatic washing machine, the clutch spring, is monopolized by foreign capital, and no domestic enterprise can manufacture it. At the time, the import price of a spring was more than $1.
Zhang Xinghai was keenly aware of the "money scene", so he plunged into it, and through continuous research and development experiments, finally developed a domestic washing machine clutch spring, breaking the monopoly of foreign capital. Priced at 1 yuan, the Phoenix Factory once won ninety percent of the national market during its most glorious period.
Home appliance springs allowed Zhang Xinghai to stand firm and achieve initial wealth accumulation.
By the early 90s, the mainland motorcycle industry took off and surpassed Japan in 1993 to become the first in the world, and Chongqing is the paradise of motorcycles.
In 1996, Zhang Xinghai's Phoenix Plant began to supply shock absorbers for Changan Automobile, Dongfeng Motor and Jialing Motorcycle. But Zhang's ambitions go beyond parts.
In 2001, he registered and established Chongqing Yu'an Group Co., Ltd. and acquired Lifan's "New Feeling" motorcycle brand, taking the first step from parts processing to motorcycle production and sales, which was the first transformation that Zhang Xinghai often talked about.
This year, Changan Automobile announced that it would become the leader of China's micro-car industry. At that time, Dongfeng Motor, the second oldest car in China, was not far behind, because the sales of micro-cars at that time accounted for nearly 40% of the automotive industry.
In 2003, Dongfeng Motor, Dongfeng Industry and Yu'an Group jointly established Dongfeng Yu'an, focusing on Dongfeng Xiaokang brand mini cars. Yu'an Group only paid 50 million yuan to obtain 50% of the shares of the joint venture. After signing the contract, a person in charge of Dongfeng said to Zhang Xinghai: "You won the battle in this negotiation. ”
Through this transformation, Xiaokang has a historical accumulation of car manufacturing, and by 2009, Dongfeng Xiaokang successfully ranked among the top three in China's micro car market.
However, since 2016, the automobile market has undergone earth-shaking changes, from once hot to eliminated by the market, and the rise of new forces in car manufacturing has made traditional car companies shine.
This year, the new energy vehicle manufacturing movement is in full swing, NIO launched EP9, and the engineering prototype of Xpeng G3 before mass production has also been displayed... Traditional car companies, electric vehicle companies, Internet/IT companies, etc. have all come to an end, and the wave of new energy vehicles is surging.
It was also in this year (2016) that Xiaokang shares officially landed on A-shares, riding on the east wind of capital, Zhang Xinghai also invested heavily in the new wave of new energy vehicles. In January 2017, Jinkang New Energy Automobile Co., Ltd., a well-off subsidiary under Zhang Xinghai, obtained the eighth new energy production qualification in China.
It is the so-called brother who fights the tiger, and the father and son soldier go into battle. Three months later, at the age of 27, Zhang Zhengping (son of Zhang Xinghai, the actual controller of Xiaokang), served as a director of Xiaokang shares, and under his leadership, Xiaokang spent more than 30 million US dollars in Silicon Valley to establish SF Motors, and acquired AMG's US civilian factory for 110 million US dollars, and spent 33 million US dollars to pocket the battery system research and development and design company InEVit, SF Motors used this to attract Tesla founder Martin Eberhard and other industry leaders. (Note: Zhang Zhengping has successively served as the deputy general manager of Xiaokang and the president of the intelligent car business group, and is currently the chairman of Thalys, becoming the number one person in Thalys's face.) ）
Also in this year, Xiaokang's annual foreign investment scale exceeded the 1 billion yuan mark for the first time in history, and its foreign investment reached 1.725 billion yuan in 2017, a year-on-year increase of 137.93%, and the funds were mainly used to build intelligent manufacturing bases, and in 2018 and 2019, it exceeded the 2.8 billion yuan mark, with a total foreign investment of 7.416 billion yuan in three years.
With its strong investment, its Liangjiang Smart Factory was officially put into operation in 2019. At this year's Shanghai Auto Show, Xiaokang officially released the first SF5 production version.
SF5 also became the first product of Xiaokang to touch the high-end level of 300,000 yuan, but due to insufficient brand power and poor intelligence level, sales were not ideal, and the total sales of this car during the independent sales period of Xiaokang were only more than 1,300 units.
According to the statistics of 24 Chao, the sales volume of "new energy vehicles" of Xiaokang shares in 2019 was only 9,089 units, while the sales of NIO and Xpeng Motors in the same period were 20,565 and 166.08 million respectively.
That is, in the second year of Xiaokang Co., Ltd. (2018), the net profit of Xiaokang Co., Ltd. after deduction of non-attributable parent began to show continuous losses, and showed an accelerated loss trend.
To survive, a well-off person must change its strategy.
Throughout the history of well-off car manufacturing, it can be said that "it originated in micro-cars, and heard in the world".
On December 23, 2021, Xiaokang's mid-size luxury SUV, the high-end smart electric vehicle M5, made its debut at the press conference and started nationwide delivery on March 5, 2022. As of November 2022, three models of the M5/M7/M5 EV have been launched. (Note: All sales of products are included in the sales volume of "Cialis Automobile")
According to the author's statistics, AITO only took 9 months from the launch of the product to the first monthly risk volume (real sales) exceeded 10,000, making it the fastest new energy vehicle brand in China to break through (monthly) 10,000 risk volume. It took 24 months for Li Auto to achieve this goal, 34 months for Xpeng Motors, and 40 months for NIO.
Less than a year after the official delivery of the Cialis series, more than 78,000 units have been sold.
It should be known that NIO's sales in 2018 were only 11,348 units, and Xpeng's first-year results in 2019 were 16,608 vehicles, and the ideal first-year delivery was only 32,624 vehicles; In the first year, the sales volume of the series has exceeded the sum of "Wei Xiaoli", which can be called the fastest growing new energy vehicle brand.
AITO is a high-end smart car brand jointly created by Huawei and Cialisto.
The market generally believes that "Xiaokang has found the most powerful ICT foreign aid in China today." ”
But the cooperation between the two sides has not been smooth sailing. As early as the beginning of 2019, Xiaokang Group officially signed a contract with Huawei. The two parties will carry out comprehensive cooperation in areas such as industrial Internet, ICT infrastructure, intelligent new energy vehicles, and connectivity.
In April 2021, the first model of deep cooperation between Cialis and Huawei, the Huawei Smart Selection SF5, was released, and the two parties deeply integrated technology, products and channels.
Against Huawei's halo, Cialis SF5 lost the initial battle, and by the end of 2021, only 8,169 units of the car had been delivered, which was not satisfactory.
There are even problems such as stopping production and stopping sales just after buying, high actual fuel consumption ratio publicity, false battery life, and car lag, which has triggered the collective protection of the rights of car owners. It is rumored that Huawei is not satisfied with the quality and quality control of the Cialis SF5.
After that, Huawei's Yu Chengdong personally presided over a mysterious meeting, pointing out that Huawei should not only help enterprises "build good cars", but also help them "sell good cars". "Not only to help the horse and send a ride, but also to participate in the whole process and deeply empower."
Learning from the lessons of the first battle, Huawei began to increase its voice in AITO, a new brand cooperated by the two sides. It is said that in order to support the Qianjie brand, Huawei's intelligent terminal business department has provided assistance, from pre-design to post-sales, almost single-handedly handled by Huawei.
Huawei's mobile phone team and software engineers were involved in the design of the M5. Yu Chengdong revealed: "It is necessary to build a boundary in accordance with the standards of million-dollar cars, the appearance, interior, performance, experience and quality requirements of million-dollar cars. ”
At the end of December 2021, AITO's first work, the M5, was officially unveiled, which used Huawei's DriveONE pure electric drive range extender platform, and was equipped with Huawei's latest HarmonyOS cockpit for the first time in the industry, from audio to intelligent cockpit to autonomous driving system, almost all of which were imprinted with Huawei's imprint in addition to the car itself.
More importantly, Huawei has enabled its own stores to sell to the world, and directly endorses it with its own brand power and sales channels.
Under a series of layouts and influences, the production and sales of Qianjie also maintained a strong growth momentum. It is reported that the brand is currently mainly produced in the Cialis smart factory, with a production capacity of 300,000 units by 2022.
Huawei's belief + new energy supporters, the sky is thunderous, and the stock price of Xiaokang soars like a rocket. From the high point of 2019 to June 2022, its stock price soared 4.2 times, and its market value once exceeded the 100 billion yuan mark.
But this also lays the groundwork for subsequent development.
There is no doubt that Qianjie has become the core automobile brand under Xiaokang Co., Ltd.
According to the latest annual production and sales report, in 2022, the production and sales volume of its "Cialis Automobile" (including Qianjie series brands) will be 83,701 and 80,041 units, respectively, an increase of 660.37% and 626.39% year-on-year, making it one of the company's fastest growing brands.
During the same period, sales of Xiaokang "other models" plummeted by 41%, and production fell by 46%.
In the past 12 months (March 2022 to February 2023), the sales volume of the "Cialis" brand accounted for more than 50% of the company's new energy vehicle sales in ten months, and the proportion was as high as 91.91% in January 2023.
In the past 12 months, the sales volume of the "Cialis" brand totaled 861.52 million units, accounting for 61.64% of the company's total sales of new energy vehicles.
The importance of Qianjie for a well-off is self-evident.
In 2022, Zhang Xinghai decided to change the name of the listed company from Xiaokang shares to Cialis. It can be seen that Cialis new energy vehicles have become the lifeblood of Xiaokang Group and the Zhang family.
However, in cooperation with Huawei to build cars, there are also leading car companies that have always been wary and even vigilant.
Chen Hong, chairman of SAIC, once said frankly: "Car companies apply Huawei's autonomous driving technology to provide overall solutions, so that it becomes the soul and SAIC becomes the body." For such a result, SAIC cannot accept it. ”
It is rumored that a senior executive of Beiqi Extreme Fox once bluntly said at an internal meeting: "We have cooperated with Huawei for so many years, Huawei has gained a lot of noise, what have we gained?" ”
As we all know, R&D, sales and profitability have always been the core three indicators to measure the strength of car companies.
Deeply bound to Huawei, although Zhang Xinghai has repeatedly stressed that "we are not a foundry, nor do we do a foundry". However, the weaker profitability of Cialis is still questioned and reduced to a "foundry".
After all, the data does not lie, Cialis' automotive business gross margin has indeed lagged far behind competitors, as shown in the table below:
Li Xiang, founder of Ideal Auto, once said that cities with stores have eight times the market share of the former than cities without stores. This shows the importance of terminal sales.
In the construction of sales channels, Cialis also relies on Huawei's help.
According to Sohu Auto's statistics, less than 25% of the self-built channels (including experience showrooms and user centers) are in the world. Many western regions and third- and fourth-tier cities rely on Huawei stores to cover them.
According to the latest data, as of November 28, Horizon had 1,168 sales stores in 220 cities. Compared with the new force brands Xpeng (as of the end of September), Ideal (as of the end of October) / NIO (as of the end of October), there are 407, 274 and 412 respectively, with obvious advantages. Officials expect that by the end of 2022, the number of brand stores will expand to more than 1,200, and the expansion rate will be relatively fast.
However, among all the stores in the world, the number of Huawei sales stores is 996, accounting for 85.27%.
According to other media reports, in Huawei's smart selection mode, the sharing ratio between Huawei and Cialis is 1:9. Of Huawei's 10% share, 8% is Huawei's channel marketing expenses, and 2% is technology licensing fees.
And that's exactly what happened. According to the third quarter report of 2022, the sales expenses of Cialis in the first three quarters reached 3.083 billion yuan, which was 3.40 times higher than the R&D expenses in the same period, while the "sales, administration and general expenses" expenditure of Li Auto in the same period was only 85.67% of the R&D expenses.
In addition, according to the statistics of 24 tides, there is a certain gap between the scale of R&D investment and the proportion of R&D investment to operating income compared with competitors such as "Wei Xiaoli", ranking in the third quarter report of 2022, the R&D investment scale of Cialis in the first three quarters was only 906 million yuan, which is only 22.74% of the lowest R&D investment scale of Xpeng Motors in "Wei Xiaoli", and only 13.21% of NIO.
To sum up, the degree of dependence of Cialis on Huawei is self-evident.
In recent years, Huawei has repeatedly emphasized the "cold winter theory", and Ren Zhengfei pointed out that Huawei should change its thinking and business policy, shift from the pursuit of scale to the pursuit of profit and cash flow, and ensure that it survives the crisis in the next three years. "With survival as the main principle, the marginal business is contracted and closed across the board, and the cold is passed on to everyone."
For the automotive business, he particularly emphasized that smart cars should strengthen the business closed loop, "Huawei should shift from technology-oriented to survival-oriented." At present, the automotive division is Huawei's only loss-making business.
Especially after the mobile phone business encountered the US technology blockade, Huawei's automotive business urgently needs to accelerate commercial monetization to realize Ren Zhengfei's vision of "laying eggs along the way and fishing in the shoals".
At the end of last year, Chi Linchun, president of Huawei's intelligent vehicle solution BU Marketing and Sales Service Department, said that in the past three years, Huawei has invested a total of 3 billion US dollars (more than 21.7 billion yuan) in the research and development of auto parts, which can be said to be the most expensive project in Huawei.
Now, it is time to consider the harvest, and Yu Chengdong also proposed that Huawei car BU should be profitable in 2025. Not long ago, Yu Chengdong reiterated in an interview that Huawei does not build cars, and through the establishment of the Boundary Ecological Automobile Alliance, a few car companies are selected to join and jointly develop. "Huawei's closely working closely with car companies will be the first to become profitable within a year or two, and will become one of the most profitable car companies in China."
However, Cialis, which builds cars with Huawei, is mired in losses, and it is unknown when it will be profitable, and the "win-win (profit)" vision of Huawei and Thalys is far away.
According to the performance forecast disclosed by Cialis, Cialis is expected to have revenue of 33.5-35 billion yuan in 2022, an increase of 100.38% to 109.36% year-on-year; However, the net profit loss was 3.95 billion yuan to 3.5 billion yuan, down 116.57% to 91.90%, the largest loss in history.
Soochow Securities tested that its Q4 bicycle loss was 1.82-11,800 yuan, and the loss increased month-on-month.
According to the statistics of 24 Chao, in the past five years (2018-2022), the total loss of Cialis (net profit attributable to the parent after deduction, the same below) was 9.987 billion yuan to 10.437 billion yuan. In the previous seven years (2011-2017), Cialis created a net profit of only 2.686 billion yuan.
Therefore, if Cialis wants to solve the profit problem, it also needs to rely on the sales of the Qianjie series. After all, BYD's success is just around the corner, and Cialis also wants to fight a turnaround battle by bringing profits up through "rising sales - increasing scale - diminishing marginal costs".
But the reality is that even in the hot 2022, Cialis new energy vehicle sales have failed to complete the "200,000 vehicle assessment standard" in the previous equity incentive plan.
In August 2022, Cialis issued an equity incentive plan, which intends to grant no more than 36 million stock options to incentive recipients, covering 3,254 employees (accounting for 24.06% of the company's total number at the end of 2021), including the company's directors, executives, core technology/business personnel, employees who have a direct impact on the company's business performance and future development, etc., compared with the 2021 equity incentive plan, the proportion of employees covered is further increased, which is conducive to fully mobilizing the enthusiasm of employees. Stimulate the endogenous motivation and potential of talents. Assessment target: New energy vehicle sales target of 160,000-200,000 units in 2022.
According to the production and sales express report, the total sales volume of new energy vehicles in Cialis in 2022 will be 1.350 billion yuan, which is a certain gap from the assessment standard.
The latest data shows that Cialis automobile sales have been negative growth for two consecutive months, for example, according to 24 tide statistics, in January/February 2023, Cialis automobile sales fell by 55.79% and 21.94% month-on-month, respectively, which is the first time in the past year that there has been two consecutive months of negative growth. The situation is not optimistic.
Under the pressure of profitability, Huawei has launched other plans, that is, to expand the Smart Selection Ecosystem Alliance with more car companies.
Last month, the long-circulated news of the marriage between Huawei and Jianghuai finally had accurate news. On February 16, China Construction Group's official website announced that the consortium of China Construction Six Bureau won the bid for the EPC project of Anhui Feixi New Energy Vehicle Intelligent Industrial Park, saying that the project will be used by Huawei and Jiangqi Group to jointly develop a new generation of high-end intelligent electric vehicles in Hefei after completion.
This also means that the rumors of Jianghuai and Huawei cooperating to build cars have been settled, and the project is already in progress.
Five days later, on February 21, Yu Chengdong said that Huawei did not build the car himself, and the two sides (Huawei and JAC still cooperated through the smart selection mode).
Yu Chengdong said in a recent interview that "Huawei's smart selection model will cooperate with other manufacturers because of the limited resources of the Cialis family." This can also understand why Huawei has to join hands with Jianghuai after having Cialis.
Recently, there have also been media reports that the new car jointly developed by Huawei and BAIC will adopt Huawei's smart selection cooperation model, equipped with technical solutions such as Hongmeng intelligent cockpit, intelligent vehicle control and intelligent driving provided by Huawei, and will be sold in Huawei stores, and is expected to be launched in 2024.
Whether from Huawei's overall strategic level or actual results, the smart selection mode will be the main direction of Huawei Automotive's future, but Cialis is obviously not its only choice.
Resources are always limited, and under the continuous expansion of Huawei's Smart Selection Ecosystem Alliance, it is bound to disperse Huawei's limited resources.
At the end of December 2022, Musk and Tesla's long fund managers held a discussion, he believes that 2023 will be a very severe recession, and the Fed continues to raise interest rates.
This is undoubtedly a double whammy for large consumer goods such as automobiles. The recession has reduced people's demand for cars, and rising interest rates will increase the cost of buying a car, because Americans almost always take out loans to buy cars.
Musk bluntly said, "In this case, we should reduce prices, increase sales, maintain stability, and grow as quickly as possible without putting the company at risk." This means that during a recession, profit margins will be low or even negative, as long as the cash position remains good. ”
In fact, the fierce competition of new energy vehicles in 2023 will indeed exceed many people's imagination.
According to Bloomberg New Energy Finance, global sales of electric passenger cars are expected to rise to 13.6 million this year, of which about 75% are pure electric vehicles.
According to the statistics of the 24 tide team, up to now, only 19 car companies have announced a total of 13.67 million new energy vehicle sales targets, of which only BYD and Tesla have a total sales target of 6 million units, accounting for 43.89%, and many car giants such as Great Wall Motor, Nissan, Toyota and many other car giants have not yet announced clear sales targets, and oversupply in 2023 is a high probability.
In order to break the situation, at the beginning of the new year of 2023, Tesla took the lead in launching such a fierce price war: according to incomplete statistics of 24 tides, the price war launched by Tesla has swept at least ten countries around the world. In just seven days from January 6 to 13, Tesla launched a price war (price reduction) in ten countries such as China, the United States, Britain and Germany, of which the average reduction rate in 7 countries was more than 10%, and the largest decrease was in the United States, with an average decrease of 14.70%.
In order to cope with the impact of the price war of Tess, the domestic automobile market has reduced prices again. According to incomplete statistics from the 24 tide team, up to now, more than 30 car companies such as Xpeng Motors, Cialis, and FAW Group have joined the tide of price reduction.
What is certain is that the cutthroat market race has begun. The author believes that without mastering the core technology, the supply chain system is not perfect, and the profitability of car companies will be in a weak position under the new competition of the industry, it will be difficult to go further, let's wait and see.