Text | Tech Planet, Author | Wang lin
The employees of NIO's Alps project team and Xpeng Motors are immersed in a long-lost excitement. After nearly 2 years of sluggish sales, these two companies finally experienced the thrill of exploding orders.
Although the official did not release specific data, Li Bin, the founder of Weilai, said in a media interview on the day after the release of Ledao L60, "Ledao has exploded, and the server has expanded by 5 times." In order to celebrate that the Xpeng MONA 03 met sales expectations, Wang Fengying, the president of Xpeng Motors, who rarely appeared, even drank the first glass of liquor in his life.
Ledao L60 and Xpeng MONA M03 are currently the cheapest models of NIO and Xpeng Motors, respectively, with the lowest price of the former being 206,900 yuan, and the price dropping to 149,900 yuan if the BAAS scheme is adopted, while the lowest price of the latter is 119,800 yuan.
With lower prices and higher configurations, both cars will save the company from the slump in sales. In the same situation, Li Auto is also in the same situation. After the failure of the pure electric model MEGA model, which is priced at 559,800 yuan, Ideal once again climbed to the peak of sales with the cheapest "matryoshka" model L6 ever.
Around 2014, "Wei Xiaoli" set off together, and after occupying a certain share of the high-end market, they coincidentally began to enter the more affordable mass market 10 years later. No car company only lays out one market, which is the inevitable competition in the auto market.
But for "Wei Xiaoli", about 200,000 is the most competitive market, and every popular model will be quickly imitated. After Huawei and Xiaomi entered the game, "Wei Xiaoli" is no longer the first traffic highland, they need more cars and more victories to pass through the car market cycle and become a minority of survivors.
Sinking to save "Wei Xiaoli"
In September, the busiest month with nearly 50 new cars on the market, NIO and XPeng once again attracted most of the traffic in the auto market.
On September 20, 25 days after the release of Xpeng MONA M03, He Xiaopeng appeared at the Zhaoqing factory of Xpeng in Guangzhou, which is the production base of MONA M03. This day is the 500,000th car of Xpeng and the 10,000th day of the MONA M03 off the assembly line.
Xpeng has not enjoyed the "sweet trouble" of explosive orders for a long time, and its monthly sales have hovered around 10,000 units for a long time, and many potential consumers have curbed the urge to place orders because they are worried about the business continuity of Xpeng.
MONA M03 is one of the best-selling models since Xpeng's founding. On September 10, an internal letter from the supply chain center of Xpeng Motors showed that the MONA M03 was locked in 30,000 units within 48 hours of its launch. According to an article by the China Institute of Science and Technology, as of September 12, the order volume has exceeded 72,000 vehicles, and it is expected that the order will exceed 100,000 vehicles by the end of September. Yang Guang, product manager of Xpeng MONA M03, has set a goal of monthly sales of more than 10,000 or even higher.
In less than 1 month, the production of 10,000 vehicles is not an easy task for car companies, and it is a huge victory for Xiaopeng, which has poor delivery capacity. Xpeng seems to have been prepared for a long time, and when consumers place orders, there are not many options for the exterior and interior of the MONA M03, which can greatly improve the efficiency of the supply chain. Tech Planet understands that in order to increase deliveries, the Zhaoqing factory is hiring people everywhere.
Its explosion even drove another model of Xpeng, the G6. Sun Shaojun, a third-party automobile sales research agency "Car FANS", revealed in the live broadcast that Xpeng G6 added more than 4,000 new orders last week. A Xpeng employee told Tech Planet that Xpeng sales are likely to exceed 20,000 in September.
The G6's competitor is the recently popular L60. This is the first car of NIO's second brand Alps, aimed at family users, and its underlying logic is large space, intelligence, low price, low energy consumption, and more importantly, the use of BAAS scheme can achieve electricity cheaper than oil.
According to the statistics of "Car Fans", the number of large orders has exceeded 30,000 units within 72 hours of its launch. Sales is almost 7*24 hours of work, each sales person has dozens of orders, Ledao car users and service operations in charge of even online recruitment.
In order to ensure the delivery of the vehicle, at more than 1 o'clock in the morning after the new car was launched, Li Bin pulled the team to discuss the follow-up delivery of the L60. Li Bin's expectation for this car is to deliver 20,000 units in the remaining three months of this year, and reach a monthly production capacity of 20,000 units by March next year.
An employee of NIO's Alpine project told Tech Planet that Li Bin had visited the production plant before the new car was released. He believes that the Ledao L60 will not have the previous ET5 delivery crotch pull.
It's not just NIO and Xpeng that are lucky. Five months ago, Li Auto's cheapest model, the L6, was launched, breaking the haze brought by the pure electric model MEGA in one fell swoop, and now it sells an average of 20,000 units a month, while the total sales volume of Li Auto in August was 48,000 units.
To scale, or gross profit
If selling 100,000 units a year is the ticket to new energy vehicles, then more sales now means that it is possible to stand on the table in the future.
At the Yunqi Conference just past, He Xiaopeng said, "In the next stage, the competition point of the new energy vehicle market is who can produce and sell 1 million new energy vehicles every year, which is just an entry to the knockout competition, that is to say, I was eliminated without it." ”
In order to sell more cars, car companies will inevitably launch more and cheaper models. But an unavoidable reality is that there is a good chance that a cheap car will pull down profits. In May this year, the failure of the pure electric model MEGA reduced the price of all models of Li Auto, which has never been reduced in price. Relying on the price reduction and low price of the L6 model, Ideal once again returned to the peak of sales.
But the market reacted less than expected. According to a report released by Merrill Lynch in May this year, due to the increase in sales of low-margin L6 models, the second quarter may become the most difficult period for gross profit margin, and it is expected that Li Auto's gross profit margin may decline to 18%.
Li Xiang, the founder of Li Auto, believes that the healthy gross profit margin of the automotive industry is 20%, but there are not many car companies that have reached it now. According to the financial report, in the second quarter of this year, the overall gross profit margin of Ideal was 19.5%, compared with 21.8% in the second quarter of 2023 and 20.6% in the first quarter of 2024. Year-on-year and month-on-month declines.
NIO and XPeng have also launched cheaper models, and there are also concerns that this will pull down overall gross profits. Tech Planet asked a number of employees at the NIO Alpine project and Xpeng Motors, and they didn't know the exact gross profit. But they all believe that the company will not sell too low.
Li Bin has said that despite the fierce price war in the auto market, NIO will not price at the expense of gross profit. The medium- to long-term goal is to achieve a gross margin of 15%. When the monthly delivery volume reaches the level of 20,000-30,000 vehicles, the Ledao brand can achieve breakeven. The cost of the Ledao L60 is about 10% less than that of the Tesla Model Y, and the cost of the latter's BOM (Bill of Materials) is 150,000 yuan.
According to Leifeng.com, the BOM cost of Ledao's new car (excluding the pure material cost of R&D, factory construction, marketing, depreciation, etc.) is about 140,000 yuan, and the price of the new car is 150,000 yuan, which can ensure double-digit gross profit and achieve profitability.
A senior practitioner in the new energy vehicle industry told Tech Planet that the gross profit margin of automobiles is affected by many factors, such as manufacturing adjustments and supplier adjustments. A car priced within 200,000 yuan is not necessarily more expensive, the higher the gross profit margin, and vice versa, the cheaper the lower the gross profit margin.
The Xpeng MONA M03 is in the same situation. Jiang Wen, head of the R&D of the Xiaopeng MONA series, said in an interview with 36Kr that after the volume and scale continue to rise from October to November, Xiaopeng will announce its financial report at that time. At that time, when you look at gross profit, you will deeply realize that the automotive industry is really king in scale.
10 years after its establishment, NIO and XPeng are still losing money. Li Bin said in 2022 that he "hopes that NIO will be profitable in 2024". In the financial call in the first quarter of 2023, Li Bin pointed out that the break-even time point will definitely be pushed back, and as for the postponement time, NIO hopes that it will not exceed one year. He Xiaopeng also previously said that Xpeng Motors expects to break even in 2025.
Now, it is just over 1 year since the original announcement of profitability, and for them, expanding the scale means the possibility of increasing the gross profit margin, and it also means that they are closer to profitability.
Mass market, an uphill battle
Car companies always hope to reach different consumers through different brands, and BYD, which is the king of the 150,000 market, hopes to reach the high-end market through Yangwang and Equation Leopard. "Wei Xiaoli" started from a market of more than 300,000, and now if you want to increase sales, you must enter the mass market, that is, a market of less than 300,000.
Ledao hopes to seize the market share of joint venture fuel vehicles of 150,000 yuan to 200,000 yuan, which is also the sales hinterland and last bastion of joint venture vehicles. Xpeng MONA M03 will drop the intelligent driving function to less than 150,000, and this is a market dominated by BYD. There is no doubt that these are markets that are competitive enough.
In the past two years, NIO and Xpeng have not had a good time. NIO's share price fell from around $67 to around $7, and XPeng's stock price fell from around $56 to around $12.
Enterprises are facing business pressure, and employees are not having a good time. Employees at NIO Alps and Xpeng both said that their year-end bonuses in 2023 were not very generous. The explosion of Ledao L60 and MONA M03 made them feel that this year's "year-end bonus should be stable." ”
In the face of a broader mass market, car companies hope to bet on more popular models through more models.
In the first half of next year, NIO's 100,000-level fireflies will be delivered. He Xiaopeng, chairman and CEO of Xpeng Motors, revealed in the latest internal letter that the company plans to launch nearly 30 new or facelifted models in the next three years to make up for the two important cornerstones of the 100,000~400,000 yuan level layout.
However, the competition between car companies has long been not the competition of a single model, and almost every one faces more than one opponent. And building a 400,000 car and a 100,000 car are completely different logics.
Even if the cumulative sales of the ideal car are about to reach 1 million, in the field of range extension, it has been inseparable from the encirclement of the car in the field of range extension. If Li Auto launches a pure electric SUV next year, he will meet his old rival NIO. The Xpeng G6 and Ledao L60 are also benchmarked against the Tesla Model Y, while the NIO ES9 and Xpeng G9 are also competing models.
At the China Electric Vehicle 100 Forum held not long ago, Wang Chuanfu, chairman of BYD, said that the industry has entered a tragic knockout stage. On the one hand, the industry has entered a structural adjustment cycle, and the increase of industrial concentration is an inevitable stage; On the other hand, the new energy vehicle market has entered a cyclical adjustment stage, and enterprises need to form scale effects and brand advantages as soon as possible.
How to play the cards of "Wei Xiaoli" tests their decision-making wisdom and affects the survival of enterprises.