The story of the new forces to build a car financing continues.
On April 15th, ACS announced the completion of the latest financing. At this point, ACH has completed three financings in the past year and the total financing is expected to be around RMB 7 billion. On March 31, Ranger Motor announced that it had completed Round B financing. The financing amounted to RMB 5 billion, and it has raised RMB 6.22 billion in total.
At the same time, however, with the centralized delivery of mass-produced vehicles in the second half of the year, several head companies that build new vehicles will soon face the test of the market.
As the three new vehicle builders that have completed the largest amount of financing and battalion strategic investment, the new vehicles of Weilai Automobile, Xiaopeng Automobile, and Weima Automobile have already completed the release or debut of the production car. They also indicated that they will complete this year. The delivery of the first batch of users, they will be the first batch of new forces in the construction of "crab" business.
However, from the point of view of manufacturing and delivery to delivery, it is only the first step to survive. In the competition to seize the window in the next two or three years, the new forces have begun to think about the future development and plan for long-term development. Strategic layout. The delivery and delivery of production vehicles is just the beginning of this capital war “burning moneyâ€.
Can it be listed once and for all?
How much money do you need to build a car? Li Bin, Chairman of Weilai Automobile, He Xiaopeng, Chairman of Xiaopeng Automobile, and Shen Hui, Chairman of Weima Automobile, gave a consistent answer: 20 billion yuan.
Li Bin once said in public that if there are no 20 billion don’t want to build a car. He Xiaopeng once sighed on social platforms: “Looking at others making cars feels that 10 billion yuan is too exaggerated, and now I jump in to know that 20 billion are not enough.â€
Shen Hui also said in an interview with the media: “The future will be the three years of the most money-burning. It will not be enough without sufficient financing in the early stage. Even a team with strong research and development capabilities and experience in the industry supply chain will require at least 20 billion yuan. Yuan can only burn the products on the market.†Indeed, they are all looking for money with this figure.
According to public statistics, Weilai and Weimar Capital currently have financing amounts of approximately RMB 15 billion and RMB 12 billion respectively. Xiaopeng’s current financing has exceeded RMB 5 billion. Although the amount of financing for the three companies has been considerable, there is still some distance from 20 billion.
On April 9, He Xiaopeng revealed that the company plans to raise more than 10 billion yuan this year. This important task will be handed over to Gu Hongdi, the newly appointed vice chairman and president of Xiaopeng Automobile in March this year.
Gu Hongdi, who came out of Wall Street, had previously worked as an investor in JPMorgan Chase for 14 years. Prior to joining Xiaopeng Automotive, he was chairman of JP Morgan Asia Pacific Investment Banking and has many years of experience in investment, financing, and mergers and acquisitions. It is understood that Gu Hongdi will be responsible for the work of Xiaopeng’s global strategy, finance, financing, and international cooperation and mergers and acquisitions.
“This new outlet for building vehicles will really need to be able to do a very strong resource integration and will need enough capital to fight. This is a capital-intensive war.†On April 13, Gu Hongdi accepted the 21st Century Business Herald. An interview with reporters said.
However, for the new financing of continuous financing, the demand for capital is no longer as simple as taking the money for the purpose of entering the game. They are more interested in what resources the investors bring to them.
“Money is an important resource, but it is not the only resource. Resources are how you integrate the strategic resources of the capital. From the perspective of Xiaopeng, whether or not it is connected to the capital of Ali or Foxconn, not only for money, but also more. I hope to be able to open up resources and to be able to go to larger business scenarios in the future." Gu Hongdi said.
Equity investment, while bringing in more funds, will also dilute the interests of shareholders.
In Hui Hui's view, Weimar's current financing situation has been able to meet the planning of the next 3 to 5 models. "We are only interested in strategic investors. Pure financial investment is not of much interest. Because we don't have enough money, let investors come in mainly because of strategic significance." On April 11th, Shen Hui received a reporter from the 21st Century Business Herald. Said during the interview.
In addition to financing, Weilai and Weimar's listed plans have already been put on the agenda. Xiaopeng Motors has been led by Gu Hongdi, who has many years of experience in investment banking, and is also expected to rely on his years of investment banking experience to prepare for listing. While serving at JPMorgan Chase, Gu Hongdi has participated in IPO of Alibaba and capital financing, mergers and acquisitions or corporate restructuring transactions of companies such as Xiaomi, Ctrip, Baidu, and Shanda Group.
However, in Gu Hongdi’s view, for the new forces to build a car, listing opportunities and risks are in the meantime, it needs to be fully prepared and evaluated, and it is necessary to consider the purpose of listing and whether it can continue to have the ability to finance after listing.
“I wouldn’t list on Xiaopeng Motor, and the company will not let the listing become the main job because of me. I will be very concerned about the dynamics of the market, the dynamics of the industry, the dynamics of competitors and the capital market, and Judging by the company's own circumstances, listing does not mean that once and for all, no longer worry about financing. After listing, there may be short-term one-time financing, which is even more harmful to the company." Gu Hongdi said.
How long can you make money after mass production?
Entering the mass production stage, while the new forces make vehicles more emphasis on the strategic significance of financing, the attitude of capital will become more rational and cautious.
“Right now capital is relatively active, but the capital is highly focused and it is hoped to cooperate with companies in the head. Enterprises with capital will have more and more capital. Enterprises with no capital will have less and less capital, and differentiation will increase. The more obvious," one investor told the 21st Century Business Herald reporter.
In other words, head companies tend to gather more capital, and the likelihood of success under capital bailouts will be even higher. However, a real problem is that after the completion of mass production, it will take a long time for the new forces to build vehicles from profitability. After all, even Tesla, which already has a place in the global new energy automotive market, lost $1.9 billion last year.
"Up to now all new forces have not sold or delivered the car. For the capital market, after this time point, the company generates cash flow and has heavy assets. For the financing structure, there will be A lot of changes. Before the new forces were built, they were more like Internet companies. Apart from equity financing, there was no other way to finance. The structure of financing will change greatly from next year.†The investing community told the 21st Century Business Herald reporter. .
For China's new forces to build cars, after the completion of the construction, mass production, marketing, branding, and channel construction also need continuous investment in the capital. In other words, the "burning of money" by new forces will be a protracted war. The cruel reality test is whether the capital has enough patience with them and supports them as always.
In the next two to three years, capital will begin to assess which new vehicle manufacturers have more investment value and profitability. Once the new forces have lost the trust of capital, the capital chain has been broken and the capital market has been eliminated.
For the new forces car makers, if they have more sufficient funds at this stage, they will provide them with some room for error. "If only this fund is available, there will be no incident. If you maximize your capital adequacy ratio or space, it will also be one of the advantages of surviving competition in the future." Gu Hongdi said.
Recently, some media reported that Wei Lai's capital chain had problems, but Li Bin denied this. What can be seen is that in a short period of time, even if the delivery of the first mass-produced vehicle is completed, it will be difficult for the new forces to “make money†at the speed of “burning moneyâ€.
For Tesla, which has suffered consecutive losses for 13 years, the important reason why valuations can have overtaking GM and Ford is that despite facing serious production difficulties, their products have great market competitiveness. "As an investor, Tesla has no brand risk, no product risk, orders are in hand, but can not be created faster delivery, this will affect its valuation, but it will not affect its survival." Gu Hong Said.
In other words, in order to obtain continued support from the capital market, the top priority for domestic new forces is to create a competitive product. "In the next 1-2 years, whether or not we can produce products that satisfy consumers will be the biggest challenge for new car makers." April 10, Mingmin Capital Partners Huang Mingming said in an interview with a 21st Century Business Herald reporter.
Can three years reach a scale of 100,000?
To a certain extent, the new forces to speed up the construction of vehicles in the early stage of construction are designed to attract capital. However, the market performance of the first car will greatly influence the follow-up attitude of capital. "There will only be two or three years in the future. If we cannot achieve the scale of sales of 100,000 vehicles during this period, we will not be able to live." Shen Hui said.
If you want to seize the outlet, you must use the fastest time to build the car. This is the consensus of the new vehicle builders. However, because the “New Energy Vehicle Production Qualification†issued by the National Development and Reform Commission has not been obtained, the three new forces have chosen two ways to “curve the countryâ€: Wei Lai and Xiao Peng chose to work with Jianghuai and Haima respectively, and Weimar passed it. Holding Zhongshun Automobile obtained the qualification of new energy production. On March 28th, the production line of Weimar New Energy Automobile Intelligent Industrial Park in the Minjiang Estuary, Wenzhou, Zhejiang Province, was fully integrated. This is the first intelligently built and put into production of the new forces. Vehicle factory.
In the eyes of the traditional auto companies coming out of the eyes of Shen Hui, the trade unions made him uneasy. “We believe that it is a guarantee to keep the factory in hand so as to ensure that all the partners in the supply chain are good, safe and reliable.†Shen Hui said.
However, OEMs also have advantages. In an interview with a 21st Century Business Herald reporter in September last year, Li Bin said that the advantages of OEMs are that they can reduce the financial pressure brought about by heavy assets on new forces, and say that in the long term, Weilai will regard cooperative manufacturing as the main one. Patterns.
"The OEM is the necessary model because we want to build the first car. The factory of Haima is a brand-new factory. It is actually a production factory specially designed for our vehicles. The equipment inside is the one we pay for specifically. This method is the depth of the cooperation between the two companies, and the majority of the employees are also from Xiaopeng Motors, and we are actually practicing the personnel and management of the production plant in the process. Our factory," Gu Hong said.
However, the market performance of the new vehicle manufacturers' first car is not only a matter of capital's follow-up judgment on new forces, but also affects the company's brand and image. Therefore, the first one must not only be made fast but also made "good." Under the OEM model, the question of the quality of the products created by the new forces caused the industry to question. The question is how deep the cooperation between the two parties is, and whether or not the foundry can complete the expectations of the new forces to build capacity and product quality. Weilai originally planned to implement the first batch of user deliveries in April and it seems that the time may be delayed. “Jianghuai’s attitude towards helping OEMs is not positive.†On April 13, industry sources told reporters.
Controlling the quality of products from the source and taking the production capacity into their own hands now looks even more “fairâ€. It is worth noting that Xiaopeng Motors and Weilai, which are speeding up with OEMs, have begun to build their own factories. It is reported that Weilai Automobile Factory has been selected to be located in Shanghai Jiading, and Xiaopeng Automobile has confirmed in May 2017 that its self-built factory will be located in Zhaoqing, Guangdong, and will be put into production by the end of next year.
How to lay out the future?
After completing this step, the new vehicle builders are also thinking about how to realize the entire industrial chain layout from manufacturing, sales, and travel, and a more long-term future strategy.
On April 9th, at the “Future Transportation†sub-forum at the Boao Forum for Asia, He Xiaopeng proposed the “three-step†strategy of Xiaopeng’s car: the first step was to build a good car, and the second step was to put China’s autopilot and The third step is to develop intelligent transportation for the future.
Coincidentally, on April 11th, two days later, Weimar Automobile and Hainan Transportation Investment Holdings Co., Ltd. announced the establishment of a joint venture company to provide time-shared leasing in the context of Hainan's layout tourism. Shen Hui, who came to Haikou from Boao, introduced Weimar's "three-step strategy": The first step is to realize mass production, the second step is to create wisdom to share travel, and the third step is to go global.
Weima inaugurated cooperation in the handover of Hainan Airlines and opened up the second-step strategy of Weimar Motors with “Smart Sharing Travel†as the core. Subsequently, "GETnGO is a passenger line" will travel with the joint venture company as the core travel market, to provide young consumers with personalized, customized smart travel services.
It is worth mentioning that in Weilai's plan, there is no strategy for sales companies and service companies, but a combination of product landing and service innovation to form a complete travel service puzzle.
On March 29th, a reporter from the 21st Century Business Herald found at the Weilai Center in Wangfujing, Beijing. Although there was only one car in the store, there were quite a few consumers who came to inquire and experience. The reporter learned that, unlike the traditional 4S shop, in addition to the display function, the Weilai Center does not have sales and maintenance functions.
"User-oriented" seems to be becoming the collective slogan of new forces. The new forces do not want to simply be classified as car manufacturers. As Shen Hui said, "Weimar is a data service company."
In the industry's view, the new carmaker may end up with only a few winners. Weilai, Weimar, and Xiaopeng are the most powerful vehicles in the new forces. As the first batch of new carmakers to be tested, who can be the first to be recognized by the market, the answer may be known as early as possible. However, in Shen Hui's view, the opponent has never been a new force in building cars, but a traditional car company. "We have nothing in common with other new car builders. We need to make the market bigger. The main reason is who has the strength to compete with traditional car companies." Shen Hui said finally.
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