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Tencent Auto "High Beam"

Author: Guo Yifei Editor: Liu Peng

A new product launch conference willZeekr(NYSE: ZK)'s halo has been knocked to the ground, and behind it is a reflection of the intensity of the extreme internal competition among auto companies.

On the evening of August 13, this star car-making new force announced its two main modelsZeekr 001And 007 facelift and upgrade.

Among them, the price of the 2025 Zeekr 001 is basically the same as the old model, still 259,000 yuan to 329,000 yuan. But the new model makes up for the shortcomings of intelligent driving, and most versions switch to the self-developed Haohan Intelligent Driving 2.0 version. In terms of hardware, the new model is equipped with laser radar and dual NVIDIA OrinX chips as standard, which can provide 512 TOPS of computing power. The old model uses Mobileye, an external supplier, for intelligent driving solutions, with a computing power of only 48 TOPS.

Just half a year ago, the 2024 Zeekr 001 was just launched on the market, which also triggered collective ridicule from car owners that "three generations of 001 were sold in half a year".

In contrast, the 2025 Zeekr 007 is equipped with the self-developed second-generation BRIC battery. While the charging efficiency is greatly improved, the price is reduced by 20,000 to 30,000 yuan compared to the old model. The 2024 007 was just launched in December 2023.

Because it was difficult to accept the official compensation - a car purchase voucher worth 10,000 yuan, Zeekr's series of price reduction measures caused great dissatisfaction among old car owners. Thus, a storm of rights protection for car owners that swept across the country began.

From the beginning of 2023TeslaThe price war in the auto market, led by the Chinese government, has continued for nearly two years. As the overall growth rate of the new energy market slows down, especially as automakers switch from electrification to intelligence, competition becomes more intense. In order to seize the market, the new product development cycle has been greatly shortened from 4-6 years to 2-3 years, and the speed of model changes is even monthly. However, this can easily lead to a series of problems such as chaotic product release rhythm and reduced value retention rate of used cars.

Zeekr's self-developed intelligent driving solution was originally planned to be installed on vehicles by the end of 2024, at least two or three months earlier than expected.

"New energy vehicles have entered a stage of competing in rapid iteration capabilities, which is very different from traditional vehicles. Not only Zeekr, but other new energy vehicle companies will also accelerate their iteration speed in the future." In an interview after the press conference, Zeekr CEO An Conghui explained that after the 2024 001 was launched on the market, it began to study the application of self-developed intelligent driving on 001 to respond to the needs and voices of the market and users.

A person close to Zeekr told Tencent Auto's "High Beam" that before the new product was launched, there had been predictions internally that the company was worried that adding features and reducing prices would cause dissatisfaction among old car owners, but the decision-makers did not make this prediction and decided not to compensate old car owners, underestimating their reaction. Now the company is also having a headache.

As of now, Zeekr has not yet given any follow-up compensation plan.

It is difficult to balance the conflict between new and old models in order to achieve both sales and reputation

"Only 167 days have passed since the release of the 24th model, and the 25th model has been launched. I feel like I have been taken advantage of. This is too unfair." A Zeekr 001 owner in a southwestern provincial capital city was quite angry about Zeekr's move. We went to Zeekr to negotiate, and some of their staff also sympathized with the owner.

At the end of February 2024, the facelifted Zeekr 001 was launched on the market. While the starting price was reduced by 30,000 yuan, the configuration was upgraded again, including the three-electric system, car chip, chassis suspension, audio, etc.

The above-mentioned car owner told Tencent Auto's "High Beam" that it was because of this press conference that the various functional configurations were very balanced, except that the intelligent driving had some shortcomings, and he thought that there would be no iteration in the short term, soAvita 12、QJM7Among a number of models, he finally chose Zeekr 001. "The car I just bought in early July has run less than 2,000 kilometers. The life of our 24 models is too short, which will directly affect the value retention rate in the used car market."

Since the end of the press conference, the rights protection group in his city has quickly gathered more than 200 people, and the main car owners are 24 Zeekr 001. Their core demands are to replace it with the Haohan Intelligent Driving Solution for free, or cash compensation of 20,000 to 50,000 yuan.

However, according to Zeekr's official response, the above solution is difficult to implement. Zeekr said, "Due to the different layout schemes in the underlying chips, system control, wiring harness layout, etc., the Mobileye intelligent driving solution used in the old models cannot be replaced with the Haohan intelligent driving solution. The system and hardware levels are two sets of solutions. The models of the Mobileye SuperVision solution will also continue to be updated."

From the perspective of car companies, continuously investing in iterative technologies and products to gain a larger market share is also part of their business operations.

An Conghui said in an interview after the meeting that the price of 001 will not increase with the additional configuration. Mobileye's cost is lower than that of dual Orin-X smart driving chips, lidar and Nvidia's overall hardware solution. This is based on the rapid iteration capability of the product and a relatively good industrial chain foundation. Zeekr has now delivered more than 300,000 units. We have digested and absorbed this part of the increased cost through the scale effect of the vast architecture. "We will pass on the cost reduction in this regard to users."

According to industry practice, before a new model or replacement product is launched on the market, the promotion window period will be extended as long as possible to give consumers enough time to digest it. At the same time, old products will also be appropriately discounted to achieve the purpose of clearing inventory and promoting sales.

However, as the attributes of automobiles change from industrial products to electronic consumer products, the replacement cycle has been greatly shortened, and the price war continues to roll back, making it increasingly difficult to balance the conflict between new and old models.BYD, Weili, Xiaopeng and others have faced such challenges.

A marketing manager of a domestic auto company told Tencent Auto's "High Beam" that Zeekr originally planned to change the model once a year, but the intelligent driving team was so awesome that they produced 25 models ahead of time. If they had considered everything carefully, they could have raised the price of the new model and compensated old car owners for some of their rights, but this would have been difficult to stimulate sales. In addition, Zeekr has a direct sales system with transparent prices, and there is no dealer as a buffer, so the price issue has been hit hard. "In the current competitive environment, it is difficult for automakers to have both."

Affecting 86,000 car owners, Zeekr may find it difficult to replicate the "free chip replacement" template

The distortion in the rhythm of Zeekr's model changes and replacements reflects the company's overall pressures on sales and turning losses into profits.

auspiciousThe holding group owns as many as 11 automobile brands, among which Zeekr is undoubtedly the most valued one at the moment. Li Shufu provided sufficient financial, human and asset support, which helped Zeekr to successfully go public in the United States only three years after its establishment, becoming a new car-making force with the "fastest IPO in history".

Focusing on the high-end pure electric new energy market, Zeekr's strategy is to establish benchmark products in different market segments, such as Zeekr 001, 009 and X, which focus on the three markets of hunting coupe, MPV and compact SUV respectively. The sedan product 007, which will be delivered in early 2024, is regarded as a high-volume model entering the mainstream market. Although the price is lower than 001, its sales volume is lower than expected.

"007 is a bit far from our early goals. This time, through the improvement of product strength and optimization of prices, we believe that 007 is still very competitive in competing for the leading position in the market segment. This is the core purpose of the adjustment of 007." In an interview after the meeting, Lin Jinwen, head of sales at Zeekr, said.

Data shows that in July 2024, Zeekr failed to continue the good performance of breaking 20,000 units in June, and fell 22.13% month-on-month to 15,600 units. Among them, the sales of the two main models 001 and 007 fell by 35.09% and 18.95% month-on-month to 9,335 and 3,498 units respectively.

Overall, Zeekr delivered 103,500 vehicles in the year, a year-on-year increase of 89%, which is much higher than the overall pure electric market (10.1%). However, this is still far from the annual sales target of 230,000 vehicles, and the 2025 target is as high as 650,000 vehicles.

In addition to existing products, Zeekr is still enriching its product line to boost sales. According to the plan, it plans to launch its first SUV model and an MPV model in the second half of the year, named Zeekr 7X and Zeekr MIX respectively.

Relying on economies of scale to turn losses into profits is the most urgent task facing Zeekr.

At Geely Auto's earnings conference in March 2024, Zeekr said that it would strive to achieve the goal of turning losses into profits (according to Hong Kong Financial Reporting Standards) in 2024 on the premise of increased sales and higher gross profit. At that time, An Conghui told Tencent Auto's "High Beam" that "this goal is one year ahead of schedule."

The financial report shows that in the first quarter of 2024, Zeekr's gross profit margin for vehicles was 14%, a year-on-year increase of 3.9%, second only to Tesla (17.4%) in the high-end pure electric market. Although the net loss narrowed by 18% year-on-year, it still reached 2.022 billion yuan, and the pressure is still not small.

In July 2022, Zeekr, which was in its early stages of brand creation, announced that it would upgrade the chips for old car owners for free, from the Snapdragon 820A chip to the Qualcomm Snapdragon 8155 chip, spending 300 million yuan for this purpose. This move set a precedent in the industry for free hardware upgrades and also established a good reputation for the brand.

Under the current pressure of the company to turn losses into profits, the car owners who were backstabbed this time may not be able to get more compensation. A rough calculation of the scale of car owners involved in this incident shows that as of July, the sales of the 2024 001 and 007 were 55,900 and 30,600 respectively.

According to Zeekr's latest official statement, "We understand and respect the feelings of our users, and we are also aware of the importance of trust. Therefore, Zeekr has specially provided old car owners with a car purchase voucher worth 10,000 yuan, so that old car owners can buy the latest Zeekr products at the best price."

Zeekr said that in the era of rapid development of new energy vehicles in China, continuous technological advancement and iteration are a must for all participating brands. Zeekr has always strived to provide users with the most competitive products at the moment, and also hopes to work hard to bring the latest technology to users as soon as possible to bring a better experience.