Author | Xu Yun
Edit | Egg total
Produced by | Bullet Finance
At a time when the automotive industry is entering the era of electrification, the value of car companies has been redefined - even start-up car companies that are not profitable and have few deliveries can be popular with investors, and traditional car companies that dare to compete with performance and sales scale in the capital market are even more popular.
In the current global car market, Tesla has been sitting in the position of "the world's first car company by market capitalization" for about a year and a half. On November 10, 2021, Eastern Time, Rivian, an electric vehicle manufacturer known as the "Tesla Killer", was born, ranking third in the world in terms of market capitalization after only five days of listing.
However, as of January 6, 2022, Eastern Time, Rivian's stock price has fallen by 51.34% from its peak, with a market value of $78.6 billion (about 500.957 billion yuan), still higher than the market capitalization of the two SAIC combined. You know, so far, Rivian has only delivered a few hundred vehicles, and the third quarter earnings report is in a huge loss.
Behind the discussion of why capital is willing to give Rivian a high valuation, it is more noteworthy that in the era of electrification, can Rivian, known as the "Tesla killer", sweep the global car market like Tesla? In the Chinese market, how is the development of electric pickup trucks? Is there a possibility of a "Chinese Rivian"?
1. Brief burst of fire
For now, Rivian's rising storm is fierce, but it is also cooling down quickly.
On November 10, 2021, Eastern Time, Rivian officially landed on the NASDAQ market, attracting the attention of a large number of capitals. At the time, Rivian's IPO raised $12 billion, the largest U.S. stock IPO since Alibaba in 2014, and its shareholders were not only Amazon, but also the veteran car giant Ford.
On the first day of listing, Rivian's stock price rose by more than 50%, and its market value once exceeded the $100 billion mark, closing at $100.73 on the same day, up 29.14%, with a market value of $85.908 billion, surpassing its shareholder Ford and approaching GM.
By November 16, 2021, The stock price of Rivian on the fifth trading day of listing has reached a high of $179.47, with a market value of $161.523 billion, ranking among the top three car companies in the world by market capitalization. Capital's fanatical pursuit of Rivian is evident.
"Rivian has a strong momentum after listing, because electric vehicles have good potential in the future, and it has scarcity as an electric pickup truck manufacturer, and there are major shareholders such as Amazon and Ford, not only with financial assistance, but also give a large number of orders, and there is a certain guarantee for future sales." Wu Mingyi (pseudonym), an investor in Beijing who pays attention to the new energy track, analyzed Bullet Finance.
However, just after the 5th trading day of the listing, Rivian's surge came to an end and the stock price began to decline.
On December 16, 2021, after the U.S. stock market, that is, a month after Rivian's listing, its third-quarter earnings report of huge losses hit the stock price hard. On December 17, Rivian shares fell as much as 10.26%, and on the 20th, Rivian shares fell to an all-time low of $88.4.
As of the close of trading on January 6, 2022, Eastern Time, Rivian shares were $87.33, down 51.34% from their highest point of $179.47, and the market value shrank by about $82.9 billion from its peak, only about $78.6 billion.
For the decline in Rivian's stock price, Wu Mingyi told "Bullet Finance": "In fact, near the end of 2021, the US stock Tesla and China's new energy sector, including Ningde Times and BYD, have experienced a pullback, so Rivian's stock price is inevitably affected by the entire market situation, but its performance and production capacity and delivery volume are indeed ugly, which is also a big bear. ”
Rivian's earnings report shows that in the third quarter of 2021, its revenue was only $1 million, and it was also the only revenue in the first nine months of 2021. The increase was due to The Rivian delivering 11 R1T pickups to its first customers.
In addition, in the third quarter of 2021, Rivian's net loss was as high as $1.233 billion, a sharp widening compared to a loss of $288 million in the same period last year. From January to September 2021, Rivian's net loss was as high as $2.227 billion, which was also significantly higher than the loss of $665 million in the same period in 2020.
(Photo / Rivian's third quarter 2021 financial report)
Rivian's losses have risen equally alarmingly compared to previous years, with its prospectus showing losses of $426 million in 2019 and widening to $1.018 billion in 2020.
Under the correction of the plate and its own huge losses, the beautiful capital story of Rivian's stock price soaring can only be abruptly stopped.
2, too many tests
In fact, behind the huge loss of performance, Rivian, as an emerging automobile manufacturer, is facing the big problem of "poor production capacity" like all new car-making forces, especially at the moment when the "lack of core tide" is spreading, and its production and delivery capabilities are even more tested.
In the consumer market, Rivian launched the R1 platform. In September 2021, Rivian unveiled its first model, the R1T electric pickup, and began delivering another model, the R1S electric SUV, in December 2021. Rivian's earnings report shows that as of September 30, 2021, it has produced 12 R1T electric pickup trucks and delivered 11 vehicles. As of December 15, 2021, Rivian had produced 652 vehicles and delivered 386 R1 vehicles.
With the delivery of the vehicle, the cost of the Rivian is also rising significantly. In the third quarter of 2021, Rivian's R&D expenses increased by $221 million year-on-year to $441 million, and its R&D expenses increased by $613 million year-on-year from January to September.
At present, judging from the situation of orders, Rivian should not lack sales.
Rivian noted in its earnings report that as of December 15, 2021, it had received approximately 71,000 R1 pre-orders in the U.S. and Canada, and these customers had each paid a cancelable and fully refundable deposit of $1,000.
Photo / Rivian official
In addition, in the commercial market, Rivian will launch an electric van EDV designed in cooperation with Amazon, and Amazon has placed the first order for 100,000 EDVs. For any car manufacturer, this is not a small order.
But at a time when Rivian's production capacity is limited, product production is in question, and the global lack of cores is spreading, this can only be a "promising story".
In December 2021, Rivian said it might not be able to meet its own 2021 production targets due to severe supply chain constraints; it expects to deliver hundreds of vehicles in 2021 instead of the previously planned 1,200.
In the earnings report, Rivian also bluntly said that it relies on third parties to manufacture and supply key semiconductor chip components required by the vehicle, has not signed long-term agreements with all semiconductor chip manufacturers and suppliers, and if the manufacturer or supplier is unwilling or unable to provide enough semiconductor chips, it may not be able to find an alternative source in time, and the business will be adversely affected.
Rivian's opponent Tesla has also been deeply trapped in the "production capacity hell", from the current point of view, Tesla has traveled the road, Rivian may inevitably repeat it. But the new question is: Can Rivian sweep the global auto market like Tesla in the future?
In the eyes of analysts, the limited market for pickup trucks dooms Rivian to be difficult to become the next Tesla.
"Capital is willing to give Tesla a high valuation, not only because new energy is the future of the automotive industry, but also because its products are more universal." In contrast, Rivian, which is currently mainly doing electric pickup trucks and electric SUVs. From the current point of view, the pursuit of Rivian by capital may lie more in the scarcity of electric pickup trucks than in electric SUVs. Wu Mingyi told Bullet Finance.
Wu Mingyi further pointed out that although pickup trucks have a large market in the United States, they belong to a niche market in a populous and well-established country like China, which determines that its expansion scope may not be as good as Tesla, while the electric SUV field, now has many competitors and has launched many models, it faces huge competitive pressure, in the estimation of its future value to discount.
Huang Ping (pseudonym), an automotive analyst who has worked at a well-known analyst firm, also believes that Rivian may not be able to replicate Tesla's success due to audience problems.
"Although pickup trucks have a large market in the United States, in other countries and regions, the audience is far less wide than Tesla's audience. Tesla's success is not only supported by the US market, it can be seen that Tesla also has good sales in the Chinese market. However, the popularity of pickup trucks in china's car market is limited, not to mention electric pickup trucks. Huang Ping said bluntly to "Bullet Finance".
3. The missing Chinese story
The story of electric pickup trucks on the other side of the ocean is in full swing, but in contrast to the Chinese market, it is slightly quiet.
In recent years, the global auto industry has ushered in drastic changes, BYD and Tesla, Weilai, Xiaopeng, Ideal, Weima and other new car-making forces have become representative enterprises in the era of electrification, and traditional car companies that are not willing to fall behind have also launched a pursuit war.
Nowadays, the war of new energy vehicles has swept through the Chinese passenger car and commercial vehicle markets, and pure electric cars, SUVs and even electric buses have representative products. However, this does not include pure electric pickups.
In the U.S. car market, pickup trucks are well-deserved "big sellers".
Relevant data show that the sales of pickup truck models in 2020 account for 20.2% of the US automotive market. According to data from Good Car Bad Car, an automobile sales research institute, pickup trucks ranked in the top three in U.S. sales in 2021, and most of the vehicles in the top 20 were pickup trucks and SUVs, of which only 4 were cars. In addition, statistics show that the annual sales volume of the US pickup truck market in 2021 reached 2.8425 million units.
However, in China, the policy-affected pickup trucks are facing the problem of "difficult to enter the city", and at the user level, affordable vans such as Wuling Hongguang carry the demand of domestic consumers to carry people and pull goods. Under the influence of a variety of factors, pickup trucks still belong to the niche market.
According to data from the China Association of Automobile Manufacturers, in 2020, the cumulative sales of domestic pickup trucks were 491,000 units, an increase of 8.58% year-on-year. In the same period, China's total automobile sales were 25.311 million units. From this calculation, domestic pickup truck sales account for only 1.94% of the overall car market.
In China's pickup truck market, Great Wall Motors has been "the boss for many years". According to Great Wall Motor's 2021 semi-annual report, great wall pickup trucks have been off the production line in 1996, with a cumulative global sales of nearly 2 million vehicles, and have maintained the first domestic and export sales for 23 consecutive years. In the first half of 2021, Great Wall pickup trucks sold a total of 114,400 units, an increase of 12.3% year-on-year, and its market share in the Chinese market reached nearly 50%. Among them, the "Great Wall Cannon" has sold more than 10,000 sales in 13 months, ranking the top seller.
According to the Great Wall Motor Production and Sales Express, the cumulative sales of Great Wall pickup trucks in 2021 will be 233,000 units, an increase of 3.56% year-on-year; the output will be 223,100 units, down 0.18% year-on-year.
Under the trend of electrification, domestic automakers are also gradually developing the track of electric pickup trucks.
For example, in September 2020, Great Wall launched the electric version of the Great Wall Cannon "Electric Gun". According to Cui Xiaohui, then general manager of the Great Wall Pickup Truck Brand Company, this car can achieve L4-level automatic assisted driving in fixed scenarios, such as smart airport guide cars and unmanned driving in smart logistics parks.
Photo / Great Wall Official
According to recent media reports, geely pickup business has become independent, is in the internal incubation stage, plans to transform into an independent high-end, electrified brand, the goal is to benchmark Rivian.
However, at present, compared with other models, the sound emitted by domestic automobile manufacturers on electric pickup trucks is extremely limited. Pickup truck head players like Great Wall Motors have not yet made great achievements in the field of new energy vehicles, and electric pickup trucks are also in their infancy.
The staff of the Securities Department of Great Wall Motor told the author that Great Wall's electric pickup trucks do not have separate sales statistics, "because the current volume is basically a very small state, so there is no separate calculation." ”
"At present, the company has done the wholesale of pure electric pickup trucks, such as The Fengjun 7 EV and the Electric Gun. The technology and products corresponding to pure electric pickup truck models are now available, but at present, as far as the domestic market is concerned, the pickup truck itself is still a relatively niche market. At present, the mainstream pickup truck products are still dominated by traditional fuel power, but in the future, with the development of 'carbon peaking and carbon neutrality', whether it is a pure electric pickup truck or a fuel cell pickup truck, there is actually a lot of room for development. Said the above-mentioned person.
In fact, China's pickup truck market has ushered in a new development opportunity in recent years: the restriction of "pickup trucks entering the city" has been gradually relaxed.
At the beginning of 2021, the Ministry of Commerce proposed to "accelerate the lifting of the restrictions on pickup trucks entering the city and promote pickup trucks to go to the countryside". Subsequently, the main consumer markets of pickup trucks such as Anhui, Guangxi, Hunan, Fujian, and Guiyang have issued notices to relax pickup trucks into the city, taking the first step of "lifting the ban on pickup trucks".
However, this does not mean that electric pickup trucks can have a better development.
The staff of the Securities Department of Great Wall Motor pointed out that the pickup truck is mainly commercial in terms of positioning, and the requirements for cost performance may be higher, mainly based on tool models with a price of less than 100,000 yuan. If you want to install a lot of batteries, it will increase the cost of the pickup truck and the price will be higher.
"If there is a mandatory policy requirement that only pure electric pickups can enter the city, then the driving force for market development will be stronger, but if fuel pickups and electric pickups can enter, then it may be more cost-effective, that is, mainly traditional power pickups." The staff member said.
At present, all electric vehicles, including electric pickup trucks, are facing the problem of difficult charging and slow charging, and to establish and improve a nationwide charging network, a strong infrastructure force and huge costs are needed, which is difficult to achieve in the short term.
According to the report of Zhiyan Consulting, the sales area of China's pickup truck market is mainly in the southwest, and the demand for pickup trucks in the western region is large. In 2020, pickup truck sales in southwest China accounted for the largest proportion of 23.3% of the total sales of pickup trucks in the country, while in the northwest region accounted for 18.7%. The power infrastructure in these two major areas is relatively backward, and due to geographical constraints, infrastructure construction is huge.
The huge user base in the United States is the root of the popularity of Rivian's capital story, but in the Chinese market, due to a variety of factors, the story of electric pickup trucks is difficult to tell. In the future, this will also become the dilemma of Rivian's global development.
4. Conclusion
In today's capital market, the measure of the value of car companies is no longer sales and performance, people will look more at the future - such as Tesla, Wei Xiaoli and other new car-making forces compared with traditional car companies, although it is still difficult to match in terms of sales and performance, but the capital market gives a very high price.
As a new force in the pickup truck market, Rivian has attracted the attention of many capitals, but its business is still in its infancy, and its products have certain limitations, and it remains to be seen whether it can trigger a global trend like Tesla.
*The caption in the text comes from: Rivian official.