New energy vehicle market shuffle to compete for secret war Tesla

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 New energy vehicle market shuffle to compete for secret war Tesla


From the perspective of the whole domestic new energy vehicle market, 2019 may encounter the first negative growth in history.

Teslas gallop and Yulais stall - at the crossroads of new energy vehicles shuffling in 2019, they drove to the opposite ends.

At the end of 2019, the two car companies that are expected to have a fight will fight again: Wei Lai announced the third quarter performance of 2019, and the stock price rose by more than 100% due to higher than the market expectation. On the same day, Tesla officially delivered the first domestic model 3 to 15 employees at the Shanghai Super factory. It is hard to imagine that in February 2019, Model3 was imported into the Chinese market, and Tesla completed the localization of Model3 less than a year later.

In fact, Yuli has experienced a year of great pressure. After listing, the capital pressure has not been reduced, and the companys financing speed cant catch up with the loss range. Finally, in the capital cold winter, the contradiction broke out. In 2019, Yuli failed to achieve the delivery target of 40000-50000 vehicles, and the company had to save money and life. The difficulties encountered by Weilai are not unique. Xiaopeng and Weima, whose prices are lower than those of Weilai, also failed to achieve the delivery target set in early 2019. If we look at the whole domestic new energy vehicle market, 2019 may encounter the first negative growth in history.

Under the new energy subsidy policy for many years, China has become the largest market of electric vehicles in the world. However, in 2019, the new energy subsidy has declined, and the electric vehicle manufacturers after weaning have encountered unprecedented challenges. In addition, Tesla has completed mass production and delivery in China, and the difficulties faced by new forces of vehicle manufacturing under internal and external pressure have been magnified infinitely. Ren Wanfu, an auto analyst, told the Beijing news that the new energy vehicle market in 2019 is a year of eliminating the false and reserving the true. The false prosperity brought about by the subsidy policy gradually subsided, and the real demand of the market appeared.

Force to drive haze

Weilai saves money and lives, reducing the number of employees by a quarter

On the penultimate day of 2019, the company only delivered the third quarter results of 2019, but the concentrated release of a series of good news seems to let the company get out of the haze of earlier layoffs and the resignation of CFO Xie Dongying. According to the financial report, the revenue of Yulai automobile in the third quarter reached 1.84 billion yuan, up 25% and 21.8% year-on-year and month on month respectively, exceeding the market expectation of 1.632 billion yuan; the net loss was 2.554 billion yuan, lower than the market expectation of 2.939 billion yuan.

This year (2019) we did some layoffs and organizational structure optimization in terms of efficiency optimization Compared with the reduction of the number of people, it is more important for us to control the overall cost and the efficiency of the expenses. On the eve of the end of 2019, Li Bin, founder of Weilai automobile, said in the financial report conference call that the number of employees of the company would drop from the highest 9900 at the beginning of 2019 to less than 7500. This is equivalent to a reduction of nearly a quarter of the workforce.

While ensuring the increase of delivery quantity, we also controlled the sales expenses. According to the third quarter report, the sales and management expenses of Yulai fell by 18.1% month on month, the lowest value in the first three quarters of 2019. It is worth noting that in the third quarter, the same reduction was made in R & D expenditure, down 21.3% month on month. In an interview with Beijing News, Huang Yan, an analyst at American investment company infinitive asset management, said that in view of the fact that Weilai has established a certain brand awareness, the reduction of marketing costs is in line with expectations, but cutting down the R & D costs is not conducive to the companys competition from Tesla and traditional car companies.

Layoffs, reduced marketing costs and even R & D investment, which is a great contrast to the high-profile performance of Weilai in the past. Since the establishment of the company, Weilai has always taken a high-end approach. Li Binli tries to build Weilai into a high-end brand among the new domestic car building forces. Whether it rents the Oriental Plaza in Wangfujing, Beijing as the niospace sales center, or holds nioday every year to invite car owners to participate in the scene, the cost of marketing of Weilai is staggering.

The reason is that the demand of Weilai is less than expected, and there is no obvious progress in financing, so the company can only survive through throttling. At the time of the second quarter report in 2019, Yulai has announced that it will launch the layoff plan and optimize the organizational structure. In terms of sales channels, Wei Lai did not choose to close the expensive NiO house, but instead established a low-cost niospace. According to the data obtained by the new Beijing News, the number of niospas in recent years has reached 72, which has completed the target set in 2019.

Although the delivery volume increased in the third quarter, the improvement of the gross profit margin of the company was not obvious. The gross profit margin of Yulai in the third quarter is - 12.1%, which is significantly higher than - 33.4% in the second quarter on the surface, but the gross profit margin in the second quarter is mainly affected by recall events. If the impact of recall is excluded, the gross profit margin of automobile business in the second quarter should be - 10.9%. This shows that there is no significant improvement in the gross profit margin.

In this regard, Li Bin said on the financial report telephone that the increase of gross profit rate will be a very important work for the company. He believes that the sales volume, product pricing and combination, and the decrease of power battery cost will be conducive to improving the gross profit rate of Yulai, and looks forward to the ability of Yulai to turn the gross profit rate into a positive one in 2020.

I can say for sure that in 2020, the gross profit of the whole vehicle will be corrected all year round, and we are very confident that we can do it. Li Bin said.

Subsidy dilemma

Facing the siege of competitors, new financing is imminent

In 2019, Yulai was in a deep dilemma. In the first quarter, the companys delivery volume was lower than the market expectation, and the stock price began to fall from a high level. Moreover, the company also announced the cancellation of Shanghai Jiading plant construction plan, which was questioned by investors.

Although Wei Lai announced in May that it had obtained 10 billion yuan of financing from Beijing Yizhuang state investment and that it would set up a factory in Yizhuang, there was nothing to be said about it after half a year. In addition, due to the large-scale recall of es8 and the expansion of Weilais loss in the second quarter, Li Bin had to announce the start of layoff plan and actively carry out financing, but it has been hard for investors to favor, including Wuxing District, Huzhou City, which had intended to invest 5 billion yuan, denied it, saying that the project risk was too high and gave up signing.

Influenced by a series of negative factors, the stock price of Weilai fell sharply in 2019. When it was in the lowest position, the stock price was only $1.19/ads. Li Bin was called the worst entrepreneur in 2019 by the media.

Tesla is no exception to the crisis experienced by Weilai, except that Elon maskbi Libin, the founder of Tesla, acted ahead of time in opening up resources and cutting costs, making the company overcome the difficulties brought by the halving of US tax preferences. In the United States, Teslas preferential tax subsidies from the U.S. federal government began to shrink from 2019. In order to ensure the demand, musk had to reduce the price several times to ensure that 360000 vehicles could be delivered in the whole year. In addition, from the beginning of 2019, Tesla announced the launch of a new round of layoff plan. The company will lay off 7% of its staff and retain only the most critical temporary workers and contractors. At the same time, Tesla will turn its sales to the online market in an all-round way, saying that this will help reduce the price of all products by about 6%. The company will close some offline stores next, and a few stores in busy areas will remain as showrooms and Tesla Information Center (but in the end, Tesla will retain about half of its retail stores).

With the help of the Chinese market, Tesla has achieved an explosion in performance. In the first three quarters of last year, Teslas revenue in China reached US $2.318 billion, 48% higher than US $1.445 billion in the same period of 2018. China continues to be Teslas largest overseas market outside the United States. Tesla has delivered 255200 vehicles in the first three quarters of last year. As long as it can deliver 104800 vehicles in the fourth quarter, the company will achieve the delivery target of 360000 vehicles in 2019

In contrast, Li Bins prediction on the decline of new energy subsidies is obviously insufficient, coupled with the negative gross profit rate of Yulai, which cant reduce the price of vehicle models, and the companys delivery in 2019 is only half of the original target. In an exclusive interview with the Beijing News in June 2019, Li Bin said that the decline of subsidies had an expected impact on sales volume, which would definitely have some impact in the short term. However, by the end of September, when the second quarter report was released, Li Bin acknowledged that the decline had put a lot of pressure on new energy vehicle companies, including Weilai.

This has led to the decline of the stock price of Yulai in the past year since March. If we exclude the two trading days after the issuance of the third quarter report, the decline of Yulai in 2019 will be more than 60%.

At present, what we need to solve most is the financing problem of the company. As of September 30 last year, the cash equivalents held by Wei Lai are about 1.96 billion yuan, a decrease of 1.4 billion yuan compared with the second quarter, and the $100 million convertible bonds subscribed by Tencent in September have been included. In this way, if the company fails to complete a new round of financing in the first quarter of this year, the companys cash flow may be exhausted in the second quarter of this year. Wei Lai CFO Feng Wei only disclosed that the company has made positive progress in financing, but did not disclose any details.

Huang Yan told the Beijing news that according to the current operating cash flow, supply chain payments and further cost compression, it is not expected to go bankrupt in the short term, but new financing is imminent, otherwise the capital chain may break within two years. Whether its Tesla or Wellcome, the key to improving share price and gross profit is sales volume. Huang Yan said that 2020 is a big year for electric vehicles. Competitors are chasing and blocking, and are trying to cut R & D costs to survive. Im afraid its difficult to achieve a substantial increase in production capacity. Without production capacity climbing, there will be no sales outbreak.

close quarters

Tesla rushed from building to delivery in just a year

In the year of the marathon run between Weilai and the loss, Tesla is heading for the Chinese market at full speed.

Tesla entered China to build a factory in June 2018, marking the beginning of a war with new domestic car making forces. According to Li Bin, he Xiaopeng and others, Teslas entry into China will undoubtedly affect the development of domestic new energy vehicles, but they underestimated the progress of Teslas plant construction - it took only 15 months for Tesla to get the land and deliver the first batch of domestic model 3, and Tesla is the fastest foreign vehicle enterprise to build a plant in China. According to the reporter, Tesla will deliver the second batch of domestic model 3 on January 7, the first anniversary of the official start of Shanghai Super factory. Different from the first batch delivered to 15 employees, this time it will be delivered to social users.

As the largest foreign-funded project ever in Shanghai, Teslas Shanghai Super factory construction is far faster than expected, and even the Chinese syndicate has provided 3.5 billion yuan of loan assistance in the construction of the factory. Later, Tesla received another 11.25 billion yuan of loan at the end of last year, preparing for the expansion of the Shanghai Super factory.

The California greenhouse flower mentioned by Li binkou has extreme workaholic performance in Shanghai port. About two months after the completion of the plant, the daily output of Shanghai Super plant has reached the level of 280 vehicles, and the target of 3000 vehicles per week is approaching. It took Tesla two years to upgrade its capacity of model 3 to 7000 vehicles a week at Fremont plant in the United States, while the Shanghai Super plant climbed much faster than the former.

But what really scares competitors is that Teslas made in China model 3 still has room for further price reduction. At the delivery ceremony of the first batch of model 3, Tesla executives revealed on the spot that the localization rate of parts and components of model 3 made in China is about 30% at present, which is expected to rise to 100% by the end of 2020, which will give further room for the price of domestic model 3 to fall.

At present, the model 3 (including full automatic driving function) made in China is 355800 yuan, and parts are expected to enter the range below 300000 yuan after production nationwide, which will affect more new forces in vehicle manufacturing and traditional vehicle enterprises planning to transform to electrification. CITIC Securities pointed out in the research report that after the production capacity of domestic model 3 climbs to 3000 units per week, Shanghai Super factory will start to build model y production line in October this year. It is expected that the production capacity will reach 2000 units per week. At that time, the total production capacity of the factory will reach the level of 5000 units per week. It is expected that the annual production of domestic model 3 and model y will reach 80000-120000 units this year, which will correspondingly drive the annual sales of Tesla China to 100000 units To 150000 vehicles.

According to the capacity planning of Shanghai Super plant, the capacity in the first phase will reach 150000 vehicles, while the market expects that the sales volume of domestic new energy vehicles will reach 1500000 vehicles in 2020. In other words, the launch of the Shanghai Super plant is expected to help Tesla occupy 10% of the domestic market share of new energy vehicles.

However, after Teslas entry into China, it is not without rivals. Recently, Wei Lai has released the third new model ec6, which is mainly car driven SUV. The target is Teslas model y. At present, Wei Lai has not announced the price of ec6, but Li Bin is very confident about this. He said: from the perspective of 2020s competitive landscape, at least I did not see any particularly competitive products, including from the perspective of Tesla..

In addition, 2020 is the big year of new energy vehicles, more domestic new power of vehicle manufacturing will start to deliver on a large scale, and the overseas car leaders will also launch their own electric vehicle products, among which, Volkswagen plans to release 20 new models this year, with a sales target of 500000 pure electric vehicles; Ford will also launch 13 new models, with the sales expected to account for 10% to 25% of the companys total sales.

Shuffle competition

The market clearing of pure electric vehicle is over, or it will return to the growth track

Influenced by the macro-economy and market structure, the domestic automobile market has been on the downward track since the middle of 2018. According to the report released by China Automobile Industry Association, the production and sales of the domestic automobile industry have declined for 17 consecutive months year-on-year since July 2018, and it is expected to decline by 8% year-on-year in 2019. Although it will rebound in 2020, it will still decline by 2% year-on-year.

In the cold winter of automobile market, new energy vehicles have been a rare bright spot, but this year, domestic new energy vehicles ushered in a great test. From June 26, 2019, the subsidy policy of new energy vehicles will be implemented in 2019. The subsidy adjustment can be regarded as the largest decline in the history of new energy vehicles - not only the local government subsidy is cancelled, but also the national subsidy standard will be reduced by more than 50%, and the overall subsidy decline will be more than 50%. The subsidy policy for new energy vehicles has officially declined. Although it is in line with the market expectation, it brings uncertain factors to the development of new energy vehicle industry. According to the statistics of China Automobile Industry Association, the sales volume of new energy vehicles in China in November last year was only 95000, down 43% year on year; in the first 11 months of last year, the sales volume of new energy vehicles reached 1043000, up 1.3%, and it is estimated that the sales volume target of 1.5 million vehicles can not be achieved.

After the rapid development in the early stage, the domestic new energy market has obviously entered the clearing stage with the reduction of subsidies. From 2017, the new energy subsidy began to decline, until 2018, the pure electric vehicles with long endurance and high energy density battery system continued to maintain a high subsidy amount, and the models with low endurance capacity began to be eliminated; however, in 2019, the subsidies for long endurance models began to decline significantly, and the adjustment of the new energy vehicle market started in an all-round way.

Ren Wanfu, an auto analyst, told reporters that the new energy vehicle market in 2019 is a year to eliminate the fake and save the real. He Xiaopeng said in October last year that although the sales volume of domestic new energy vehicles in the first three quarters of last year was close to 900000, in fact, excluding the users of taxis, travel platforms and other enterprises, only 100000 new energy vehicles actually flowed to the C-end market, indicating that the market has not yet fully recognized new energy vehicles.

In order to encourage the continuous development of new energy vehicles, the Ministry of industry and information technology of the peoples Republic of China publicly solicited opinions on the development plan of new energy vehicle industry (2021-2035) (Draft for comments) (hereinafter referred to as the development plan) on December 3 last year. According to the development plan, by 2025, the sales volume of new energy vehicles in China will account for about 25%, which is significantly higher than the production and sales target set in the previous plan.

A recent research report from CITIC Securities pointed out that new energy vehicles are strategic emerging industries firmly supported by the state. Although the industry profits will be affected by the short-term decline of subsidy policies, the policy orientation of long-term support will remain unchanged. The industrial policies will transition from direct subsidy to indirect support, and double points, purchase restriction, infrastructure construction, safety verification, and battery post-processing will be promoted And other promotion measures are expected to promote the healthy development of the industry.

In this regard, Ren Wanfu said that after 2020, consumers acceptance and satisfaction of new energy vehicles will be improved. The first purchase and the second new energy vehicle purchase intention of the family will be significantly improved. In addition, new energy vehicle products will be very rich, including Tesla domestic and joint venture brands, which will promote the market development. He believes that with the acceleration of the construction of charging piles and super charging stations, the mileage anxiety of new energy owners will be effectively alleviated.

Beijing News reporter Lu Yifu editor Wang Jinyu proofreader Xue Jingning

Source: responsible editor of Beijing News: Yao Liwei, nt6056