Falling by 195 billion in three months, the ideal moment of "generational crisis" is here again?

Falling by 195 billion in three months, the ideal moment of "generational crisis" is here again?

Kanjian Finance

2024-05-28 10:00Published in Guangdong financial field creators

Li Auto has not continued to maintain its advantages since 2023.

Recently, Li Auto disclosed the latest quarterly report, which showed that in the first quarter, Li Auto achieved revenue of 25.63 billion yuan, a year-on-year increase of 36.4% and a month-on-month decrease of 38.6%; The net profit attributable to the parent company was 593 million yuan, down 36.26% year-on-year and 89.7% month-on-month. Judging from the revenue and net profit growth data alone, Li Auto's quarterly report is not optimistic.

In addition, it is worth mentioning that if the interest and investment income obtained at this stage are removed, the actual operating loss of Li Auto in the first quarter is 584 million yuan. This is the second time that Li Auto has suffered an operating loss after three quarters, and the loss in the first quarter of this year is higher than the 413 million yuan in the first quarter of 2022.

Falling by 195 billion in three months, the ideal moment of "generational crisis" is here again?

In fact, since the listing of MEGA suffered a waterloo, Li Auto has entered a period of "water reversal".

Judging from the stock price trend, as of the latest closing, Li Auto's U.S. stock closed at $20.31 per share, with a total market value of $21.55 billion, compared with the highest point of $46.44 per share on February 27, in less than 3 months, the share price of Li Auto has been cut in half, and its market value has shrunk by more than $27 billion, equivalent to more than 195 billion yuan.

It is worth noting that Li Xiang, CEO of Li Auto, announced an important change when answering investors' questions: no new pure electric models will be released this year, and it will be rescheduled for the first half of next year.

Press the pause button to "pure electric"

For Li Auto, it is a good choice to suspend the release of new pure electric models within the year - after all, the sales of Li MEGA are actually not very good.

According to statistics, the ideal MEGA was officially launched on March 11, selling 3,229 units in the first month of listing and 1,145 units in the second month; CEO Li Xiang once expected that the monthly sales of MEGA would reach more than 6,000 units and become the "sales champion" of 500,000 units, but now, these expectations are impossible to achieve.

If Li Auto continues to release pure electric models, since the sales of MEGA continue to decline, pure electric models will be affected, so it is indeed a more prudent way to suspend and then choose the opportunity to launch.

However, behind this choice of Li Auto, it has actually paid a lot of price. Before the launch of MEGA, Li Auto, which is expected to be "full", has set a sales target of 800,000 units for 2024 and started a new round of expansion. The first is the significant increase in the number of employees, with a total of 31,591 employees by the end of 2023, an increase of 63% year-on-year. In 2023, the number of employees of NIO will be 32,820, an increase of 23% year-on-year. The number of employees in Xpeng Motors was 13,550, a decrease of 14% year-on-year.

With the significant increase in the number of employees, the operating costs of Li Auto have also increased significantly. According to the financial report, the ideal selling, general and administrative expenses in the first quarter were 3 billion yuan, an increase of 81.0% year-on-year.

As the expectations have been disappointed, in order to control operating costs, Ideal has started a new round of layoffs. According to media reports, Ideal is undergoing a full-staff optimization, with an overall proportion of more than 18%, and based on the total number of employees of 31,600 by the end of 2023, this round of personnel optimization of Ideal Auto will involve about 5,600 people, of which the sales and service operation department, recruitment team and intelligent driving team are the "hardest hit areas" for layoffs.

Of course, the "redundancy" of employees is relatively easy to deal with, but the production capacity is not so easy to deal with.

Previously, Kanjian Finance had analyzed that due to the continuous increase in sales, Li Auto will expand its production capacity in 2023. As of the fourth quarter of 2023, the total property, plant and equipment of Li Auto will be 15.75 billion, while in 2021, the total property, plant and equipment of Li Auto will only be 4.498 billion, and in just two years, the property, plant and equipment have more than tripled; In addition, in 2023, Li Auto's other non-current assets will be 2.802 billion, and the non-current assets and other items will be 5.939 billion, compared with 321.2 million and 1.277 billion respectively in 2020.

From the current point of view, the suspension of the release of pure electric models is a last resort choice for Li Auto; However, Li Auto is also paying for its overly optimistic expectations and aggressive expansion.

The "old road" is not so easy to follow

The suspension of the release of new pure electric models also means that Li Auto has returned to the "old road" of extending the range.

However, the "old road" is actually not as easy to follow as Li Auto imagined. Since the beginning of this year, with the rise of the world, the advantages of Li Auto have been weakened.

According to media statistics, in the first quarter, Wenjie continued to occupy the top spot in the sales list of new forces, with a cumulative sales volume of 85,842 units, 5,442 units higher than the sales of Li Auto, and Li Auto is no longer the "sales champion".

Moreover, what is even worse is that although it has stood at the top of the list, the question world has not relaxed, but has chosen to reduce the price against the trend. According to media reports, at the beginning of April, the main model of Wenjie, the M7, announced an official reduction: the price of the M7 Plus five-seat rear-wheel drive version was reduced by 20,000 yuan, and the starting price was further reduced to 229,800 yuan, and the price of the new M7 Max five-seat rear-wheel drive intelligent driving version was reduced by 10,000 yuan; The price of the new M7 Max five-seater four-wheel drive intelligent driving version is reduced by 10,000 yuan.

Under the pressure of asking the world to reduce prices, Li Auto also had to reduce prices together. On April 22, Li Auto suddenly announced a big price cut for the whole series - some models of the 2024 Ideal L9 and L8/L7 will be reduced by 18,000 yuan to 20,000 yuan, and the price of the Ideal MEGA that has been on the market for a short time has also been reduced by 30,000 yuan, and the current price has dropped to 529,800 yuan.

In the face of many challenges, Li Auto can only come up with the ideal L6 that "presses the bottom of the box" to deal with it. According to reports, the ideal L6 is the first model of the ideal car below 300,000 yuan, with a unified national price of 249,800 yuan - 279,800 yuan, which is the lowest price product of the ideal automobile, from the sales point of view, L6 listed 72 hours of orders exceeded 10,000, and the first cumulative order to May 5 was 41,000 units. The performance is not bad in terms of sales alone, but as a competitor, the M7 has more than 7,000 units in a single day after it was launched, and the cumulative orders in a month have even exceeded 60,000 units, compared to the ideal L6, the results are obviously slightly inferior.

Moreover, it should be noted that the launch of the ideal L6 is likely to have an impact on the "old product". According to data from the Autohome Research Institute, the Ideal L8 was launched in September 2022, and the sales volume of the Ideal L's in September fell by 9.3% month-on-month; In February 2023, the Ideal L7 was launched, and the monthly sales of the Ideal L8 and L9 decreased by 24.0% and 20.1% month-on-month, respectively. In April 2024, the Ideal L6 will be launched, and the Ideal L8 and L9 will again decline by more than 20% month-on-month.

To sum up, whether it is pure electric or extended range, Li Auto has encountered a lot of challenges, perhaps as Li Xiang said - now Li Auto has returned to the moment of "generation crisis" in 2022.

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