"It's not worth the name."
On February 26, Daniel Zhang, co-founder and CEO of Nezha Automobile, said this when he received the 2021 Person of the Year award from First Electric Network (above).
Among them are also candidates Wei Xiaoli and the founder of BYD.
"How can we be more (qualified to win) than the previous few, a bit off the mark. Whether it is business operation, technology, operation, user, research and development, we must learn from the big brothers and good friends in front of us. Daniel Zhang said.
But at least from the perspective of sales, Nezha is qualified to be compared with Wei Xiaoli. In February 2022, the sales volume was released, and Nezha surpassed Xiaopeng with 7117 vehicles, ranking second in the monthly sales of new car manufacturers, and the gap with the first ideal was only 1300 vehicles. This is already Nezha's repeated squeeze into the top three monthly sales of new car manufacturers. The pattern of "Wei Xiao Li Na" has been basically stable.
But Daniel Zhang disagreed with this: "(The standard that exceeds Wei Xiaoli should be) the sales difference between Nezha and Wei Xiaoli is more than our price difference." What he was referring to was Wei Xiaoli's bicycle price, which was several times that of Nezha. Nezha must sell several times more cars than Wei Xiaoli to catch up with Wei Xiaoli.
Sober as Daniel Zhang, he was in a very correct position for Nezha.
In fact, after Wei Xiaoli became the standard-bearer of China's new car-making forces, Nezha was the closest to them. Many investors, dealers, and suppliers are looking for the next new force worth betting on.
Is it Nezha?
This article comprehensively analyzes the differences between Nezha and Wei Xiaoli from the aspects of sales, operation, production capacity, channels, services, supply chain, financing, research and development.
01
All 100,000 units: sales are several times worse
On January 8, 2022, Nezha "collided" 100,000 vehicles, 1,042 days after the delivery of the first Nezha NO1 on August 3, 2018. Compared with Wei Xiaoli, Nezha began to deliver the car in the second, but the last one reached 100,000 deliveries.
Nezha sales caught up with Wei Xiaoli
Source: On Risk, Cartography: Electric Vehicle Observer
However, since October last year, Nezha's sales curve has suddenly steepened. Moreover, Nezha's sales growth is limited by production capacity and supply chain, not market demand. Some dealers even have as much as double the number of orders delivered. For a time, Nezha became a noteworthy "emerging force".
All of them are 100,000 vehicles, but the direct income obtained by Nezha is far from Wei Xiaoli.
According to 360's investment announcement, in the first half of 2021, Nezha's operating income was 1.63 billion yuan, the insured volume was 17,000 units, and the average bicycle revenue was 95,800 yuan. In contrast, the bicycle revenue of WEILAI, Xiaopeng and Ideal when they reached the threshold of 100,000 units was 377,000 yuan (cumulative as of Q1 2021), 229,600 yuan (cumulative as of Q3 of 2021) and 334,700 yuan (cumulative as of Q3 of 2021), respectively, which were 3.9 times, 2.4 times and 3.5 times of Nezha, respectively.
Based on the bicycle revenue of 95,800 yuan / unit, the scale of 100,000 vehicles brings 9.558 billion yuan of operating income to Nezha. In contrast, Wei Xiaoli's 100,000 vehicles generated revenue of 37 billion yuan, 20.6 billion yuan and 29.4 billion yuan (the time node is the same as above).
Nezha suffers losses in the low price of bicycles. At present, in the sales composition of Nezha, Nezha V accounts for about 70%. This is a smart electric car priced at about 60,000 yuan to 120,000 yuan. Compared with the high-end Nezha U PRO, the price is in the range of 100,000-160,000. Compared with Wei Xiaoli, the price of Nezha is much lower.
Of course, this also means that the potential market space of Nezha is much larger than that of Wei Xiaoli.
02
Bicycle "burning money": Nezha is on par with Wei Xiaoli
In addition to the nodes of 100,000 vehicles and monthly sales of more than 10,000 vehicles, the most concerned indicator of new car-making forces is the efficiency of "burning money".
In the first half of 2021, Nezha's net loss was 690 million yuan, the average net loss of bicycles was about 40,500 yuan, and the estimated operating loss was about 46,000 yuan / vehicle (calculated at a 13% manufacturing value-added tax rate), which was higher than the loss range of 30,000 yuan and 32,000 yuan / vehicle of Weilai and Ideal in the same period, and lower than the loss range of 69,500 yuan / vehicle of Xiaopeng.
It is worth noting that in this time period, in addition to Weilai's greater scale advantage, Nezha is comparable to Xiaopeng and the ideal scale.
At the end of June 2021, WEILAI's cumulative sales exceeded 120,000 vehicles, Xiaopeng and Ideal's cumulative sales were 65,000 and 64,000 vehicles, respectively, and Nezha reached 50,000 vehicles.
This means that in the case of similar scale, the money "burned" by Nezha per car is only about 30% less than Xiaopeng's loss than Wei Xiaoli, which is higher in unit price, but it is about 2 times the ideal.
Although high unit prices mean higher gross margins, they also bring higher selling expenses, especially for Wei Xiaoli, which is mainly based on the direct sales system. In the first half of last year, Wei Xiaoli's bicycle sales expenses were 66,000 yuan, 58,000 yuan and 47,000 yuan, respectively.
In contrast, Nezha's current channels are still dominated by dealers, which can theoretically effectively reduce sales expenses and bring operating cost pressure.
A Nezha dealer told the Electric Vehicle Observer that last year, Nezha's single-store subsidy in the new first-tier and second-tier cities was about 2.4 million yuan, and it was paid in three years, and the dealers profited through price differences and rebates. In addition, Nezha also bears the daily customer operating expenses such as 2000 kWh / year / car, lifelong warranty and replacement of Sanda. However, at the same time, many of the scattered costs in the process of enhancing the brand through strong services are borne by the dealer.
From the perspective of operating profit margin, in the first half of 2021, it is estimated that Nezha is about -48%, and Wei Xiaoli is -7.5%, -31% and -11% respectively.
Obviously, in terms of business operation, Nezha, who has entered the upward channel, needs to squeeze himself harder, especially to learn from the ideal car of high efficiency.
03
Capacity construction: insufficient and idle
Nezha's current bicycle loss is relatively excessive, or related to Nezha's production capacity layout.
As of the end of June last year, Wei Xiaoli had 120,000 vehicles per year for WEILAI Jianghuai, 100,000 vehicles per year for Xiaopeng Zhaoqing Base and 100,000 vehicles per year for the Ideal Changzhou plant, and all of them were in full production. In contrast, Nezha, who was "double qualification and double factory", was a small horse-drawn cart at that time.
According to people close to Nezha's interior, Nezha's Tongxiang plant with a planned production capacity of 80,000 vehicles was only 40,000 units in the year at the beginning of 2021; but at the same time, Nezha also had a Yichun plant and was still in the small-batch production stage in October last year; in addition, Nezha also planned a 100,000-unit Nezha Nanning factory, which is scheduled to be completed by the end of 2021.
By mid-2021, Nezha already has 280,000 existing, trial production and construction capacity. However, it sold only 17,000 units in the first half of the year. The lack of operating rate is bound to bring higher direct costs to the first half of the financial report.
Carrying a heavy production capacity "burden" before achieving large-scale sales is probably not what Nezha wants. Compared with Wei Xiaoli, Nezha's financing process before the "take-off" of sales is more difficult, and the relevant investment institutions in Tongxiang and Yichun are its investors. Considering the precedent of returns such as The establishment of Niolai's Chinese headquarters in Hefei after Hefei injected "life-saving money" into Weilai, it is not difficult to understand that Nezha's production capacity layout is faster than the pace of enterprise development.
However, in the second half of last year, Wei Xiaoli only began to expand production, and the production capacity of 240,000, 200,000 and 200,000 vehicles will be officially landed at the end of the year according to the plan; in contrast, Nezha's production capacity will be able to fully meet its rapid development needs. The burden of the early days may also become a welfare in the later stages.
04
Sales system construction: Nezha and Wei Xiaoli are on a par with each other
Although the process is difficult, in the process of accumulating 100,000 vehicles, Nezha has built a sales system that is not inferior to Wei Xiaoli.
In terms of models, Nezha already has three models on sale and a quasi-production model; it is comparable to the model matrix of Weilai and Xiaopeng. The ideal needs to produce a second model comparable to the ideal ONE on the basis of 100,000 vehicles.
In terms of channels, by the end of 2021, Nezha has built 333 sales and service network systems, including 70 directly operated stores, covering 193 cities. On its 100,000 nodes, Wei Xiaoli has built 234, 271 and 220 sales and service networks, covering 123, 95 and 204 cities. However, it can also be seen from here that the efficiency of Nezha's single store is relatively low.
In terms of infrastructure, on the eve of reaching 100,000 vehicles, Nezha has built a charging network of 1637 free charging stations through cooperation, covering 150 cities. Under the same node, WEILAI has laid out 146 supercharging stations, 1826 destination charging piles and 203 substations nationwide. Xiaopeng has laid out 550 supercharging stations and 129 destination charging stations in 158 cities. Ideal has not yet built or laid out charging field stations.
The expansion of the sales and service network system has promoted Nezha to complete the "battlefield" conversion from rural to urban and from B-end to C-end.
Official data show that in 2021, the proportion of users in Nezha's first-tier, new first-tier and second-tier cities will be as high as 64%; the individual users of the absolute main Nezha V have exceeded 92%; and the individual users of the new first-tier, second-tier and third-tier markets will account for 79%, 82% and 90% respectively, higher than the overall level of the industry.
05
Scale competition: Nezha "card slot" new force head
Facing 2022, Wei Xiaoli put forward the "guarantee bottom" target of 150,000 vehicles, 250,000 vehicles and 200,000 vehicles respectively, and Nezha used the target "card" of 150,000 vehicles in the position of the head group, but it needed to bear greater risks and pressures.
After the Spring Festival in 2022, due to factors such as subsidies decline, chip shortages and soaring prices of battery raw materials, the prices of many new energy models have increased, ranging from 2000-8000 yuan. The entry-level brand reaction was even more intense, and Euler stopped accepting orders for black cat and white cat models below 100,000 yuan.
Nezha V is popular with young consumers
At present, Nezha, who is also in the 100,000 yuan level, has increased the price of the three models by 2,000-7,000 yuan. Unlike Euler, although Nezha's price has increased, they want to maintain the growth momentum.
"The pressures we face are the same, but we are at different stages of development as Euler." Zhang Honghan, public relations director of Nezha, told the Electric Vehicle Observer that Euler should coordinate with the Great Wall system strategically, and Nezha is in an important "card slot" stage, "If we are still (selling) two or three thousand vehicles per month, then everyone will not ask us about our follow-up arrangements." Only when you stay at the table will there be more opportunities, everyone will pay attention, and users will have confidence. ”
The competition pattern of the new energy vehicle market is undecided, and the new car manufacturing forces are still "surviving". At this point, scale is far more important than profit and loss. Because sales not only bring revenue, but also bring brand recognition to consumers and investors, that is, opportunities for long-term development.
06
Ability to withstand pressure: cash flow and financing racing
The new car-making forces burn money while expanding their scale. It will be a dangerous "game" – cash flow can be cut off at any time.
In Q3 2021, the net loss of WEILAI and Xiaopeng Bicycle was 34,000 yuan and 62,000 yuan respectively, and the ideal annual average net loss of bicycles was 35,500 yuan. Based on this net loss as the standard, Wei Xiaoli will face a net loss of 5.13 billion yuan, 15.53 billion yuan and 7.1 billion yuan to achieve the full-year target of 2022.
As of Q3 2021, NIO and Xiaopeng had 47 billion yuan and 45.3 billion yuan in cash equivalents at the end of the period, respectively; ideally had 50.1 billion yuan in cash by the end of last year.
Compared with Wei Xiaoli, who "can afford to burn", Nezha has to bear more pressure for the target of 150,000 vehicles.
Nezha's Hezhong New Energy Vehicle launched financing in September 2017, with a total of about 12.25 billion yuan (undefined B+, B++, D+ round of financing) in 8 rounds of financing, and obtained a total of more than 12 billion yuan of bank credit. Coupled with about 9.55 billion yuan of operating income, as of the end of last year, Nezha may have received a total of 34-40 billion yuan of funds (assuming that the undisclosed three rounds of financing amounts are 2 billion yuan).
In the first half of 2020-2021, Nezha lost 2.014 billion yuan; if calculated according to the net loss of 40,000 yuan per bicycle in the first half of the year, the sales volume of Nezha 47692 in the second half of last year brought a net loss of more than 1.9 billion yuan.
Considering the adverse impact of the new energy automobile industry in 2022, optimistic assumptions are that Nezha's bicycle loss margin this year will narrow by 40% to 24,000 yuan / vehicle, then 150,000 vehicles will bring a net loss of 3.6 billion yuan. As a result, the existing and estimated loss will exceed 7.5 billion yuan, accounting for 22%-19% of the total capital of Nezha in the past year.
Fortunately, the rapid increase in Nezha is more likely to gain the favor of the capital market than in the past. Since the second half of last year, after entering the fast lane of sales growth, Nezha completed the D2 round of investment led by CATL before the end of the year, and at the end of February, it received a 2 billion yuan D3 round of investment from CRRC and Shenzhen Venture Capital.
In addition, media reports said that Nezha is planning pre-IPO financing, which is expected to reach $500 million, with a target valuation of 45 billion yuan.
07
Sustainability: The opportunity point to catch up with 3.5 million vehicles
Despite the concern for "card slots", Daniel Zhang do not believe that the cumulative 100,000 vehicles and the annual sales of 150,000-200,000 vehicles are the heads of the new car-making forces. "I don't think we should say that we are the head until the annual sales of 300,000 and 500,000 vehicles are sold, everyone is working hard to survive." Daniel Zhang said in a previous interview with Caijing Auto, "For us, it is the most important task to do a good job in the product and enrich the product line. ”
Taking this as logic, the ability system facing three or five hundred thousand vehicles is the fundamental decision of the distance between Nezha and Wei Xiaoli. To this end, Nezha played three cards: intelligence, program augmentation and channel expansion.
At the beginning of 2021, Nezha announced that it will invest 2 billion yuan in the construction of an intelligent technology research and development center, and on the same day, it unveiled the only Nezha U equipped with L2 level intelligent driving assistance capabilities at the same level, and the Eureka 03, a model under research that uses a range extender, based on soa architecture, adopts a domain controller, and can achieve L4 level automatic driving in some scenarios, and Nezha S, which will be listed this year.
U and S models will lead Nezha from the 100,000 yuan market to the 150,000-200,000 yuan and above market "jump", and more importantly, promote the transformation of Nezha's brand from "high price" to "intelligence", so as to build a more sustainable competitive foundation.
Under this strategy, although it is still far from listing, Nezha S has shouted out the slogan of intelligent "generation leveling". "Thanks to the installation of TA PILOT 4.0, Nezha S has achieved 'generation leveling' with the current head friends in terms of intelligent driving." Wang Junping, vice president of Nezha Automotive Intelligence Research Institute and head of intelligent driving, said at the communication meeting.
Of course, the wish of "one generation to equalize" is beautiful, and whether it can really be realized or not, it remains to be observed.
In addition to catching up on the intelligent driving track, Nezha will continue to strengthen the unique competitive advantage of its system capabilities.
On the one hand, Nezha plans to expand the number of directly operated stores from 70 to 100 in 2022, adding 60 cities to reach 250. Compared with Wei Xiaoli, which is mainly directly operated, Nezha, which is currently dominated by city partners, has more advantages in terms of network expansion speed and sales service operation pressure.
On the other hand, Nezha S will provide pure electric and extended range two power modes to choose from. Among them, the pure electric endurance of the extended range system is as high as 200 kilometers, and the comprehensive endurance is 1100 kilometers, which exceeds the mainstream level of the current range extender of 800-900 kilometers. Cutting into the blue ocean market segment in the Red Sea has always been Nezha's advantage. Under the background of battery cost pressure and national imbalance in charging infrastructure, the range extenders of Ideal ONE and Landu FREE prove the market demand.
Nezha hopes that Nezha S will form an effective differentiation with new car forces and mainstream brand models through the positioning of the extended-range B-class sedan and better intelligence, handling performance, which will be transformed into a tangible and long-term competitive advantage.
08
Key match point: Who is smarter?
Xiaopeng is a recognized "head friend" in the field of intelligent driving in China. In Nezha's official materials, Nezha S and Xiaopeng P7 are also placed under the same audience group.
So who is smarter?
In terms of hardware, the TA PILOT 4.0 system to be equipped with Nezha S adopts the automatic driving hardware platform of Huawei MDC610, as well as the Huawei Ascend 310 chip, with a single-chip computing power of 16TOPS, and the platform computing power is 200TOPS; the perception system is composed of 2 solid-state lidar, 11 auxiliary driving cameras, 5 millimeter-wave radar, and 12 ultrasonic sensors, a total of 30 sensors; the electronic and electrical architecture is based on Ethernet, including five functional domains such as intelligent cockpit and intelligent driving.
Nezha S brings Nezha into the market of more than 200,000
Xiaopeng P7 automatic driving chip application Nvidia Xavier, single-chip computing power of 30TOPS; the perception system is composed of 12 ultrasonic sensors, 5 high-precision millimeter-wave radar, 13 automatic driving cameras a total of 30 sensors; the electronic and electrical architecture is divided into four domains of power, body, intelligent driving and intelligent entertainment for control.
From the perspective of hardware solutions, the Xiaopeng P7, which lacks lidar, is more of a solution that integrates visual perception and high-precision maps, and the safety redundancy of Nezha S when intelligent driving with the assistance of lidar will be higher.
In the software part, at present, Xiaopeng and Nezha have announced that they will use the software full-stack self-developed method to build their own intelligent driving system. Nezha engineer told the "Electric Vehicle Observer" that at present, the middleware part of the Nezha S software is all "written" by Nezha himself.
It is worth noting that compared with Xiaopeng and NVIDIA, Nezha and Huawei in China may have better synergy advantages in software and hardware integration.
In terms of function realization, the XPISO 3.0 system currently equipped with Xiaopeng P7 can realize the navigation assistance driving function of high-speed and urban expressways, as well as the parking lot memory parking function. Nezha TA PILOT 4.0 enables high-speed and intelligent navigation within the city, as well as memory parking.
The point of transcendence is that Nezha means that Nezha S can achieve parking and long-distance summoning functions for the last 5 kilometers of unstructured roads without the cooperation of high-precision maps.
However, it is not fair to compare the Nezha S, which has not yet been delivered, with the Xiaopeng P7 delivered in 2020. The Xiaopeng P5, which will be delivered at the end of 2021, is the highest level of Xiaopeng at present.
The Xiaopeng P5 is equipped with two hybrid solid-state lidars, which can realize the navigation assistance function of urban roads (non-structural roads) under the XPILOT 3.5 system. This is what Nezha TA PILOT 4.0 hopes to achieve.
At present, the total number of Nezha Automotive Intelligence Research Institute exceeds 600 people, of which more than 300 are intelligent driving teams. According to Wang Junping, the proportion of master's and doctoral degrees in the intelligent driving team is more than 80%, and the proportion of algorithm software personnel is about 70%. This team is not much compared to Wei Xiaoli, especially Xiao Peng.
This year, Nezha will expand the number of intelligent research institutes to more than 1,000 people, and the intelligent driving team will reach more than 500 people. In the future, Nezha Automobile's investment in intelligent driving will continue to remain at 800 million to 1 billion yuan / year.
09
Summary: It's still the qualifiers
As Daniel Zhang said, in terms of business operation, technology, operation, user, research and development, there is still a considerable realistic gap between Nezha and Wei Xiaoli, but Nezha also has its positioning advantages and has the basis for catching up.
In addition, compared with Li Bin, Li Xiang and He Xiaopeng, although Daniel Zhang does not have an Internet aura, it is the most insightful product manager in the small car market. His precise definition of Nezha V reversed the trend of Nezha. Moreover, although it is a traditional marketer, Daniel Zhang also has an open mind and learning ability, and is growing into a qualified operator of a smart electric vehicle enterprise.
The battle of smart electric vehicles is an unprecedented battle. To win, it is not to compete in the current combat strength, but to compete in learning power.
This war has only just begun. "It's still the qualifiers, the future is the knockouts. After 2025, you will have a chance to come back at the table. Daniel Zhang said.
Nezha has been able to catch up tenaciously after several ups and downs before, until the sales volume is on a par with Wei Xiaoli, which shows the tenacity of his mental strength and the strength of his learning ability.
Looking forward to the future, the popularization of intelligent electric vehicles will go deeper, from high-end cars to economic models, which is where Nezha ambushes. Although the slogan of "building cars for the people" is kitsch, the depth of the "people's" market is indeed unlimited. Nezha needs to maintain strategic concentration on the basis of the current "card slot", continue to improve himself, and be a friend of time.
"My life is up to me" - this corporate motto is slightly "secondary two", but sincere, the golden stone is open.
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