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in the second quarter, automakers have emphasized maintaining stable operations and improving efficiency, and seeking breakthroughs on this basis. the pattern is temporarily divided into three levels, but there are still many variables.

business original reading

author | lao niu

nio, li auto, xpeng, leapmotor, zeekr, seres (mainly referring to wenjie, for ease of understanding, collectively referred to as seres in the text), and xiaomi are the seven new energy vehicle companies that have been listed on the market. we will call them the "seven sisters of new energy" for the time being.

with nio releasing its second-quarter results, the financial reports of the “seven sisters” have been disclosed one after another.

in fact, as early as july when the june sales were disclosed, the performance of these seven automakers had already been roughly expected. but after the detailed data was disclosed, we can understand the details of each automaker.

how are the seven car companies developing at this stage?

#1 collective growth, phase differentiation

the new forces are growing as a whole, but at different stages of growth.

in the second quarter, the total revenue of the seven automakers reached 127.5 billion yuan, a year-on-year increase of 104%. in the fiercely competitive new energy vehicle market, the "seven sisters" are very competitive.

all seven automakers maintained sales and revenue growth. due to the sluggish sales of the q4 series in the second quarter last year, it became the automaker with the fastest sales growth in the second quarter of this year, with an increase of 271%. weilai and zeekr also achieved double-digit growth. the slowest growth was in ideal and xpeng. ideal's sales were mainly due to a large base of 86,500 units sold in the same period last year; at the same time, the mega model suffered a waterloo in the first quarter of this year. xpeng's sales were mainly due to sluggish sales.

in terms of sales volume, ideal and seres are in the first echelon, nio and zeekr are in the second echelon, and xpeng, leapmotor, and xiaomi are in the third echelon.

in the second quarter, ideal had the highest sales volume and was the only automaker with sales exceeding 100,000 units. seres was not far behind with sales close to 100,000 units. nio, leapmotor, and zeekr all sold more than 50,000 units, while xpeng and xiaomi had lower sales volumes. xiaomi has just started delivery, and the current sales increase is mainly limited by production capacity. xpeng's low-priced models will be launched in the third quarter, so this echelon is likely to undergo a huge change in the next few years.

revenue usually rises with sales, but there is another key variable - price. in the current product layout, nio, ideal, zeekr, and qx have higher price segments, and their main models are all above 200,000 yuan. xpeng and xiaomi are priced in the middle, with xpeng's models widely distributed and xiaomi's highest-priced models not exceeding 300,000 yuan. leapmotor has a lower price position.

seres is the automaker with the highest revenue, followed by ideal. the revenue of these two automakers has exceeded 30 billion yuan in a single quarter. nio and zeekr both exceeded 10 billion yuan in a single quarter. the other three automakers had a quarterly revenue of less than 10 billion yuan. among them, although leapmotor has high sales, its total revenue ranks last among the seven automakers due to its low unit price.

although both are growing, the growth stages are obviously different. the growth of ideal and seres is more balanced, maintaining a certain growth rate and maintaining stable profitability. in the second quarter, ideal's net profit was 1.1 billion, although it fell by 52% year-on-year, but it has been profitable for 7 consecutive quarters. seres' net profit was 1.4 billion, turning losses into profits year-on-year, and profitable for the second consecutive quarter.

other car companies are still in the stage of investing in exchange for scale. nio is the car company with the most serious losses. it lost 5.1 billion yuan in the second quarter and 10.4 billion yuan in half a year. from 2018 to the first half of this year, nio has lost 83.3 billion yuan. such a loss is very shocking and the operating risk is relatively high.

the other four companies are basically in a state of long-term losses, and there is almost no possibility of profitability in the short term, which puts higher demands on their operating capabilities.

#2 improve efficiency and increase profit margin

there are two ways to maintain a stable operation. ideal and seres provide one, and byd also provides one. ideal and seres' idea is to increase gross profit margin through price combination. byd reduces unit operating costs through economies of scale.

for loss-making automakers, a combination of products at different prices can effectively increase the price band layout and optimize gross profit margin. at the same time, unit costs can be reduced through economies of scale. in the second quarter reports, nio, li auto, xpeng, and leapmotor all mentioned the improvement of their vehicle product mix and the reduction of average sales costs.

at present, the gross profit margins of seres and ideal are extremely high, both exceeding 20%, even higher than byd and tesla. this is mainly because these two car companies have achieved economies of scale and reduced sales costs while maintaining a relatively high price combination.

judging from the data of the seven automakers, price is a more effective means to increase gross profit margin. although leapmotor has higher sales, its gross profit margin is at the bottom, only 3% in the second quarter. such a gross profit margin has almost no possibility of profitability. although xpeng and xiaomi have the lowest sales, their gross profit margins are both over 10%. it is worth noting that xiaomi's gross profit margin is very impressive. the 15% gross profit margin exceeds that of nio, xpeng and leapmotor. as xiaomi's scale effect emerges, xiaomi's overall gross profit margin is expected to reach a higher level.

in vertical comparison, most of the 7 automakers have seen a significant increase in gross profit margins, with nio increasing by 8.5 percentage points year-on-year, zeekr increasing by 5 percentage points, seres increasing by 23.3 percentage points, and xpeng and leapmotor turning from negative to positive. it can be seen that while involution is taking place, all automakers are also working hard to improve their operational stability.

whether it is to enrich the product portfolio or to achieve economies of scale, efficiency needs to be improved. since its establishment, the organizational management of new forces has always been there.

at the end of last year, nio initiated organizational management changes, merging duplicate departments and positions, changing inefficient internal work processes and division of labor, eliminating inefficient positions, and postponing and cutting investments in projects that would not improve the company's financial performance within three years.

since the failure of g9, xiaopeng has been adjusting its organizational structure. at the beginning of this year, xiaopeng once again carried out a new round of organizational structure adjustments, involving multiple departments such as marketing, human resources, intelligent data, production and manufacturing, and product planning.

in april this year, ideal mega encountered setbacks in its listing, and ideal quickly launched the matrix organization 2.0. the ceo office was officially renamed the "product and strategy group", focusing more on products and strategies, weakening the supply chain and commercial sales functions. a product line department was established to coordinate the operation of the entire life cycle of the vehicle.

in june, leapmotor adjusted its structure, merging the original three sales departments (channel sales department, industry sales department, and retail management team) into the "sales department", with department heads reporting to chief operating officer (coo) xu jun.

there is no direct data to reflect operating efficiency, but it can be estimated from store efficiency. store efficiency is a comprehensive data, and the influencing factors include product planning, sales efficiency, product attention, brand effect, etc. this data may be used to make a rough guess.

combined with the number of sales outlets disclosed by various automakers, and corresponding to the second quarter sales estimates, xiaomi and ideal currently have the highest sales efficiency, with each store selling 314 and 223 cars per quarter, respectively. the least efficient is xpeng, which can only sell 49 cars per quarter. it can be inferred that xiaomi has great potential, ideal has outstanding organizational management, and xpeng and nio still have a lot of room for improvement.

#3 stock up on food and control expenditure

in addition to the high operating costs and low gross profit margins, high expenses are also a very important factor in the loss of car manufacturing. in the early days, many car companies had extremely high costs, and some even exceeded their revenue. in recent years, as car manufacturing has matured, expenses have been brought under control.

the expense rates of the seven automakers reflect the differences in their development stages. xiaomi is a new automaker and is still in the early stages of car manufacturing, so its r&d expense rate is as high as 45%. the total expense rates of other automakers that have gone through the early stages of development will not exceed 40%, and the highest r&d expense rate will not exceed 20%.

ideal has always been labeled as "stingy". among the seven automakers, ideal is the only one with both expense rates below 10%. however, due to ideal's high revenue, the absolute value of its investment is not low. the amount of investment in r&d expenses is second only to nio.

seres is a special case. its key technologies such as intelligent driving are basically dominated by huawei, so its r&d expense ratio is only 5%, the lowest among the seven automakers. however, its sales and management expenses are extremely high, with 6.66 billion management and sales expenses far exceeding those of other automakers.

weilai and xiaopeng are car companies with more difficult comprehensive expense management and control. on the one hand, it is related to the research and development and promotion of low-priced models, and on the other hand, it is also related to the fact that they are involved in many businesses. weilai is involved in many businesses such as battery replacement, mobile phones, and intelligent driving, while xiaopeng also needs to invest in the field of intelligent driving and flying cars, which in turn pushes up expenses. weilai's total expense rate is as high as 40%, and xiaopeng's is 37%, ranking at the forefront.

as car companies are still in the investment stage, it is very important to reserve cash. nio, xiaopeng and li auto are obviously more relaxed. as of the end of the second quarter, li auto had a cash reserve of 97.3 billion, nio had 41.6 billion, and xpeng had 37.3 billion. the cash reserves of these three companies even reached the size of xiaomi group.

the operating risks of the seven automakers are not great, and the overall debt level is within a reasonable range. zeekr and seres have slightly greater debt repayment pressure. zeekr's asset-liability ratio is as high as 125%, the current ratio is 0.7 times, and the cash reserve is the lowest among the seven automakers, only 8 billion. with a high asset-liability ratio, low current ratio, and little cash reserve, zeekr will still need geely's support in the short term. seres' asset-liability ratio is 89% and the current ratio is 0.85 times, which is also a car company with relatively high indicators.

but overall, the current debt pressure of the seven automakers is still within an acceptable range and their operating risks are controllable.

#4 each one goes his own way

competition among car companies is ultimately a competition for sales, but the paths to achieving sales are very different. in addition, car companies are at different stages of development and face different challenges. therefore, the strategic priorities of each car company are very different. it can even be said that each company is taking its own path.

weilai focuses on three aspects: technology, entertainment and cost optimization.the main technologies include smart driving chips, vehicle-wide operating systems, smart systems and smart driving. self-developed and independent systems are the key to nio's brand premium. maintaining high-end requires providing customers with an operating and service experience that is different from the general public, which is the foundation of nio.

since nio insists on self-development and self-operation, the cost is high and the product pricing is also high. at this stage, manufacturers are frantically increasing sales. nio's pricing is not conducive to increasing sales. the new brand ledao has become another strategic focus. in the second quarter, nio launched the new brand ledao. the first model l60 is currently on sale. as li bin said, this model is very important for competition in the mass market. at the same time, due to the launch of low-priced models, the cost of self-development is very high, and cost control has become particularly critical. therefore, nio will list it separately in the financial report.

the ideal keywords are: market leadership, efficiency, and intelligent driving.ideal has had a very clear market positioning from the beginning, which has made ideal's sales very strong. according to the plan of founder li xiang, ideal auto is currently in the stage from 1 to 10. the increase in sales is inseparable from the improvement of organizational management efficiency. from last year to this year, ideal has been carrying out organizational management reforms. ideal l series + management efficiency is the basic foundation of ideal. in the first half of the year, after mega made a major mistake, it was the l series and timely and effective management reforms that prompted ideal to quickly get out of the haze. therefore, continuing to strengthen the basic foundation is the ideal choice.

since the second half of last year, thanks to huawei's intelligent driving system, the sales of the m series have grown rapidly. in the first quarter of this year, seres' sales once surpassed ideal and occupied a place in the high-end market. seres' breakthrough is a completely different ecological position, which is obviously different from ideal. in addition, the intelligent driving market occupied by seres is ideal's shortcoming. as the public's acceptance of intelligent driving increases, ideal faces very strong opponents. therefore, ideal regards intelligent driving as a top priority. in july, ideal pushed noa without a map and released the next-generation autonomous driving technology architecture.

xpeng desperately needs to boost sales.xiaopeng motors already has a wide range of price segments, and its cars have long been priced below 200,000 yuan. its sales should have been relatively high, but it ranks second to last among the seven automakers, only higher than xiaomi. if sales are not restored in time, xiaopeng may be the first to fall behind.

xpeng's advantage lies in intelligent driving, but in the high-end price segment, xpeng has encountered the impact of huawei. the most effective way for xpeng is to take the cost-effective route with low price and high configuration. the mona model is highly expected. xpeng has equipped models below 200,000 with high-level intelligent driving capabilities. this model is highlighted in the financial report. mona m03 and the facelift of old models may be an attempt to determine the life or death of xpeng. the new brand and the expected sales increase will bring about an increase in costs, which will be a challenge to operations. xpeng, which is listed in two places, previously relied on volkswagen's financing to survive a crisis. now, the tolerance rate is very low, so its financial report particularly emphasizes cost reduction and efficiency improvement.

leapmotor is a very pragmatic automaker. after a product failure, leapmotor often makes adjustments quickly. after the c01 failed in its attempt to move up to a high-priced segment, leapmotor quickly lowered its price and focused on cost-effectiveness. leapmotor's sales performance is relatively positive and it continues to make breakthroughs, butleapmotor has always had limited sales volume but has found it difficult to break through into the high-price segment.

in the financial report, leapmotor listed research and development separately. currently, leapmotor has launched the leap3.0 technical architecture, covering smart cockpit, smart driving, smart electric drive, etc. r&d reserves room for leapmotor to explore upward. in order to further increase sales, the overseas market has also become leapmotor's goal. in the financial report, leapmotor mentioned that its overseas business has been implemented in an orderly manner as planned. in may, leapmotor established a joint venture with stellantis, and it is expected to start delivering c10 and t03 in europe in september. with the increasing competition pressure in the domestic market, the overseas market has become the choice of many car companies.

zeekr is also looking overseas, and its financial report shows that it is accelerating its global business expansion. with the support of geely, zeekr has a better foundation for global expansion, and it does not have too much pressure in terms of cost control. zeekr can focus more on scale, r&d and product experience. in its financial report, zeekr emphasizes quality, market share and sustainable growth for its future development.

another company that has a big backer is seres, which has a lot of advantages because huawei provides intelligent driving technology.seres focuses on manufacturing.in its financial report, seres particularly emphasized its intelligent manufacturing capabilities, including multi-model development platforms, smart factories, etc., with clear and focused business division of labor. apart from the fact that its own brand itself has no presence, seres is undoubtedly the first company to take the plunge. today, baic, dongfeng, and chery have successively chosen huawei's smart selection model, which indirectly reflects the value of seres's model.

in the first full quarter of deliveries, xiaomi was able to keep up with other automakers, which is rare in the history of car manufacturing.at this stage, xiaomi’s main goal is to increase production capacityin june, xiaomi has started double-shift production, and its production capacity is expected to reach 120,000 units, which means that the average monthly delivery volume in the next six months will be around 15,000 units. if the first car can reach this level within half a year, xiaomi's first step will be more successful than all other car companies.

due to the late start,xiaomi is working hard to make up for other shortcomingsfor example, in terms of autonomous driving, its financial report stated that urban noa was launched in 10 cities in june and nationwide in august. if xiaomi can catch up in technology, its brand perception will far surpass that of other car companies. xiaomi's ecosystem itself is unique, and the linkage between mobile phones, tablets, aiot and cars has unique differentiation. this is an important weapon for xiaomi to achieve transcendence. xiaomi is the biggest spoiler, and it is not impossible to reverse seres' ideal.

among the 7 new forces listed companies, ideal and seres are in the lead. although nio and zeekr have a gap, their prices are high and their sales are remarkable. xpeng and leapmotor are facing sales problems and price breakthroughs respectively. in the second quarter, car companies all emphasized maintaining stable operations and improving efficiency, and on this basis, they sought breakthroughs in their own way. the next further actions of nio ledao, xpeng mona, and xiaomi are likely to change the competition situation. the pattern of the "seven sisters" of new forces is still very uncertain.