Contrasting with the outside doubt, Weilai still has a good reputation in its own owner group. After all, Weilais owner satisfaction has always been an index that other brands cant catch up with. In order to maintain this target, Weilai constantly adds code to its services, such as upgrading single exemption to double exemption.
This is actually a very thought-provoking action, but this big welfare has been submerged in the financial reports, stock prices, did not attract enough attention from the outside world.
Sales are not optimistic
In Q2 in 2019, Weilais net loss was 3.285 billion yuan, an increase of 25.2% annually and 83.1% year-on-year. Losses exceeded market expectations, and Weilai cancelled its planned earnings call, a decision that would make all analysts frown. Weilai shares plunged more than 20% to close at $2.17 on the same day.
The Trend Chart of Weilais Stock Price in the Past Year
The latest slightly exciting news is that on October 8, Weilai released the latest delivery data. It delivered 4799 vehicles in the third quarter of 2019, including 4196 es6603 es8. This figure exceeds the expected delivery of 4,200 to 4,400 vehicles previously announced by Weilai at the Q2 earnings conference.
This has brought a strong boost to the troubled Ulai stock price. Before that days trading, the stock price of Weilai rose by more than 12% to close at $1.72, up about 11.7%.
Is that enough?
Weilais delivery in the first two quarters of this year was 3989 and 3553, respectively. The delivery in the third quarter was indeed much higher, an increase of 35.1% over the previous quarter. However, in September, Weilai delivered a total of 2019 vehicles, including 1726 ES6 and 293 ES8. In August, Weilai delivered 1943 vehicles, including 1797 ES6 and 146 ES8. That is to say, the delivery of ES6 has slightly declined.
Cars are typical economies of scale. Its hard to even out costs if they produce less than 200,000 cars a year. Tesla crossed this threshold last year and the days were slightly better.
The ES8 has sold less than 20,000 vehicles, and now its monthly sales have fallen to 100 digits, so neither the market nor Weilai has much hope for its future.
The problem is that Q2 started delivering ES6 in 2019, and delivery did not increase significantly, but declined slightly in September. In theory, ES6 is the hope. The characteristics of changing seven seats into five seats, improving the endurance, and changing the price into friendliness make it widely regarded by the outside world as a vehicle to open up a wider audience. Now that ES6 deliveries have declined so early, it is worrying whether its fate will be more frustrating than that of ES8.
It is against this background that Weilai announced that it would add a big welfare to the car owners - lifelong free electricity exchange.
Excellent user experience has always been the most prominent selling point of Weilai. More than 5,000 scheduled car owners are invited to participate in the NioDay conference. The NioHouse experience space, which is not open to the public but only to car owners, includes pre-sale and after-sale services including free quality inspection for life... Look at how many Weilai owners are willing to speak for Weilai, we can see how much Weilai values its customers.
Ultimate service has eased usersconcerns about the quality of new forces cars. Anyway, if you dont go far, you can just walk around the city. If the service team in Weilai is ready to come, what else can you worry about? But this lifelong, unlimited and free power exchange service fundamentally shakes the basis of Weilais revenue confirmation.
Recognition of revenue base is shaken
According to accounting standards, the recognition of revenue needs to meet three preconditions:
2. Responsibility and risk have been transferred.
3. The price has been fixed.
Traditional automobile factories provide quality assurance similar to 80,000 kilometers in three years, and forecast the possible cost during the period of each vehicle quality assurance according to experience. The simple way is to include the expenditure of quality assurance (a subset of after-sales service) in the management fee or sales fee.
The ex-factory price of Weilai electric vehicle is about 400,000 yuan, and who can calculate the cost of lifelong free maintenance of a Weilai electric vehicle? 100 thousand? 200 thousand? The amount should not be low. The exact amount can only be obtained 15 years after the vehicle has been scrapped. Therefore, if Weilai sells every car, it will confirm 400,000 revenue, some inappropriate.
Its worth noting that Tesla only provides free warranty service for the driver and battery. The battery is Panasonics. If there is a problem, Panasonic will bear the cost. And Wei Lai wants to provide free life-long power exchange, just like the fuel car factory says it wants to provide free life-long fuel, just think about how unreliable it is.
Car owners who occupy the charging space go shopping and watch movies. Car owners who do not occupy the charging stake wait hopelessly to make a living on their own. Teslas related expenditure is controllable. After the abolition of free charging, the charging service has changed from a cost center to a profit center, and Tesla said that 15,000 charging stations will be built by 2030.
The cost of the service is greater than the charge point.
First of all, we should build thousands of service outlets. According to the information provided by Weilai, a Weilai exchange power station covers an area of about 43 square meters (7.6m x 5.6m), which needs to be connected to 380V industrial power. Every exchange power station needs to be on duty for 24 hours. Li Bin has said that he plans to reach the target of 1,100 Weilai power stations by 2020 - the number of Weilai power stations nationwide is 107 so far.
Secondly, a large number of power batteries should be equipped for turnaround. Since it is free, the frequency of the car owner to change is certainly not low. According to the 15-year use of the whole car, three sets of batteries should be used bad. Although it is in turn-around use, the number of charges and discharges per battery set has a lifetime. How much are the three power batteries equivalent to the car price?
According to nioapp, there are 8 replacement power stations in Beijing, each with 4-5 batteries. The query time of tiger smell is 7:00 p.m., which is the time after work. According to the popularity of power station replacement, only one power station with the lowest number of available batteries can be used. As more and more car owners come to experience the free exchange service, has Wei Lai calculated how many batteries should be prepared?
Finally, the operation cost of power exchange service is several orders of magnitude higher than that of charging pile management. When the charging pile is erected, the owner can operate it by himself. Power exchange service needs to carry batteries weighing more than kilograms to and fro, and special equipment is needed to unload and load them from Weilai.
The service cost of Weilai Free Maintenance and Free Electricity Exchange is incalculable. Even if the duration is about 15 years, it is also uncontrollable financially. Therefore, the sales amount of electric vehicles with the promise of lifelong double exemption can not be recognized as revenue.
Will Weilai be happy?
Weilais reckless life-long exemption reminds us of pleasure.
In October 2016, the beleaguered Le Video Network (1.690,? 0.00,? 0.00%) opened for 50 years and sold for 25,000 yuan. If someone buys LETVs 50 year membership service, LETV can only recognize 500 yuan as revenue. The remaining 24.5 million can not be recognized as income, but Le TV network owes users, should be included in the liability account, because the service has not yet been provided. This is a reason why Weilai should not recognize the sales amount of electric vehicles with double-free services as revenue.
The Activity Price of Le Video Television in 2016
In fact, how to deal with finance is not important. Everyone knows that Lexin may not last another five months. Who will provide services in the next half century?
Whether its to provide users with the best experience or to promote sales, the combination of lifelong, free, infinite and many other qualifiers makes this promise seem unreliable.
Users are worried about whether Weilai has the sincerity and ability to fulfill this promise; investors are worried that if Weilai really provides these services, it will become a charity: the loss of profits on electric vehicles, the negative gross profit margin, maintenance, power exchange and life-long free...
Finally, it should be examined whether Weilai still has the money to provide these services.
At the end of 2018, there were 3.58 billion net current assets, working capital. Six months later, at the end of June 2019, net current assets were negative, and the resulting working capital had been exhausted.
Can Weilai wait for a new round of renewal investment? In todays situation, Weilais efforts to boost sales are somewhat desperate and crazy. Beginning to offer unrealistic promises to the most cherished users is in itself a worthwhile alarm bell action for every car owner.
Source of this article: Responsible Editor of Tiger Sniff APP: Chen Hequn_NB12679