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arts | wang lin

cover source | tu chong creative

the employees of nio’s alpine project team and xpeng motors are immersed in a long-lost excitement. after these two companies experienced sluggish sales for nearly 2 years, they finally experienced the pleasure of bursting with orders.

although the official did not announce specific data, li bin, the founder of weilai, said in a media interview after the release of the letao l60 that day, "letao has exploded in orders, and the server capacity has been expanded by 5 times." in order to celebrate that xpeng mona 03 achieved sales expectations, wang fengying, president of xpeng motors who rarely appeared in public, even drank her first glass of liquor in her life.

ledo l60 and xpeng mona m03 are currently the cheapest models of weilai and xpeng motors respectively. the former has a minimum price of 206,900 yuan. if the baas solution is adopted, the price drops to 149,900 yuan; the latter has a minimum price is 119,800 yuan.

with lower prices and higher configurations, both cars have saved the company from sluggish sales. also in the same situation is li auto. after the failure of the mega pure electric model priced at 559,800 yuan, ideal once again reached its sales peak with the l6, the cheapest "matryoshka" model in history.

around 2014, "wei xiaoli" set out together. after occupying a certain share in the high-end market, they coincidentally began to enter the more affordable mass market 10 years later. no car company only focuses on one market. this is the inevitable competition in the car market.

but for "wei xiaoli", the market of around 200,000 yuan is the most fiercely competitive, and every popular model will be quickly imitated. after huawei and xiaomi entered the market, "wei xiaoli" is no longer the number one traffic highland. they need more cars and more victories to survive the car market cycle and become one of the few survivors.

sinking to save "wei xiaoli"

in september, the busiest month when nearly 50 new cars were launched, nio and xpeng once again attracted most of the traffic in the car market.

on september 20, the 25th day after the release of xpeng mona m03, he xiaopeng appeared at the guangzhou xpeng zhaoqing factory, which is the production base of mona m03. this day is xiaopeng’s 500,000th vehicle, and it is also the day when the 10,000th mona m03 vehicle rolls off the production line.

xiaopeng has not enjoyed the "sweet trouble" of huge orders for a long time. its monthly sales have hovered around 10,000 units for a long time. many potential consumers have restrained their impulse to place orders because they are worried about the sustainability of xiaopeng's operations. .

mona m03 is one of xpeng's best-selling models since its establishment. on september 10, an internal letter leaked from the xpeng motors supply chain center showed that 30,000 mona m03 units were locked up within 48 hours of its launch. an article from the china science and technology research institute shows that as of september 12, the order volume has exceeded 72,000 vehicles, and orders are expected to exceed 100,000 vehicles by the end of september. xiaopeng mona m03 product manager yang guang has set a goal of monthly sales exceeding 10,000 or even higher.

producing 10,000 vehicles in less than one month is not an easy task for car companies, and it is a huge victory for xpeng, which has poor delivery capabilities. xiaopeng seems to be well prepared. when consumers place orders, there are not many choices for the appearance and interior of mona m03, which can greatly improve the efficiency of the supply chain. tech planet learned that in order to increase delivery volume, the zhaoqing factory is recruiting people everywhere.

its popularity even led to another model of xpeng, the g6. sun shaojun, a third-party car sales research organization "car fans" revealed in a live broadcast that xpeng g6 received more than 4,000 new orders last week. a xpeng employee told tech planet that xpeng sales in september are likely to exceed 20,000.

the competing model of the g6 is the recently popular ledo l60. this is the first car of nio’s second brand alpine. it is aimed at home users. its underlying logic is large space, intelligence, low price, and low energy consumption. more importantly, it uses the baas solution to achieve the goal of using more electricity than oil. cheap.

statistics from "car fans" show that 72 hours after the launch, the number of large-scale orders has exceeded 30,000. sales work almost 24/7, and each salesperson has dozens of orders. the head of user and service operations of ledo auto even recruits people online.

in order to ensure the delivery of the vehicle, li bin led the team to discuss the subsequent delivery of the l60 at around 1 a.m. after the new car was launched. li bin's expectation for this car is to deliver 20,000 units in the remaining three months of this year, and to reach a monthly production capacity of 20,000 units by march next year.

an employee of nio’s alps project told tech planet that before the new car was released, li bin went to inspect the production factory. he believes that ledo l60 will not have the same problem with the et5 before it was delivered.

nio and xiaopeng are not the only lucky ones. five months ago, li auto's cheapest model, the l6, was launched, breaking the haze caused by the pure electric model mega. now the average monthly sales volume is 20,000 units, while in august, the sales volume of li auto's entire series was 48,000 units.

you need scale or gross profit?

if selling 100,000 vehicles a year is the ticket to new energy vehicles, then more sales now mean the possibility of standing on the poker table in the future.

at the just past yunqi conference, he xiaopeng said, "in the next stage, the competition point in the new energy vehicle market will be who can produce and sell 1 million new energy vehicles every year. this is just an entry right to a knockout round, which means i don't have the right to compete. was eliminated."

in order to sell more cars, car companies will inevitably launch more and cheaper models. but an unavoidable reality is that cheap cars are likely to lower profits. in may this year, the failure of the pure electric model mega caused li auto, which has never cut prices, to cut prices on all models. relying on price cuts and low-priced l6 models, ideal has once again returned to its sales peak.

but the market response fell short of expectations. a report released by merrill lynch in may this year showed that due to the increase in sales of low-margin l6 models, the second quarter may become the most difficult period for gross profit margins. it is expected that li auto's gross profit margins may fall to 18%.

li xiang, founder of li auto, believes that the healthy gross profit margin of the automobile industry is 20%, but not many car companies have reached this level now. the financial report shows that in the second quarter of this year, ideal's overall gross profit margin was 19.5%, compared with 21.8% in the second quarter of 2023 and 20.6% in the first quarter of 2024. both year-on-year and quarter-on-quarter declines were observed.

nio and xpeng have also launched cheaper models, and the outside world is also worried that this will lower the overall gross profit. tech planet asked many employees of nio’s alps project and xpeng motors, and they did not know the specific gross profit. but they all believe that the company will not sell too low.

li bin once said that despite the fierce price war in the auto market, nio will not set prices at the expense of gross profit. the mid- to long-term goal is to achieve a gross profit margin of 15%. when the monthly delivery volume reaches the level of 20,000-30,000 vehicles, the ledo brand can achieve breakeven. the cost of the ledo l60 is about 10% less than that of the tesla model y, and the latter’s bom (bill of material) cost is 150,000 yuan.

according to leifeng.com, the bom cost of ledo's new car (excluding pure material costs such as r&d, factory construction, marketing, depreciation, etc.) is around 140,000 yuan, and if the new car sells for 150,000 yuan, it can guarantee a double-digit price. gross profit is thus achieved, and ledo has the best cost control among many models.

a senior practitioner in the new energy automobile industry told tech planet that the gross profit margin of automobiles is affected by many factors, such as manufacturing adjustments and supplier adjustments. for cars priced under 200,000 yuan, the more expensive the car, the higher the gross profit margin. on the contrary, the cheaper the car, the lower the gross profit margin.

xiaopeng mona m03 faces the same situation. in an interview with 36kr, jiang wen, head of research and development for xpeng’s mona series, said that after the volume and scale continue to increase from october to november, xpeng will announce its financial report. looking at gross profit at that time, you will deeply realize that scale is really king in the automotive industry.

ten years after their establishment, nio and xpeng are still losing money. li bin said in 2022 that "we hope nio will be profitable in 2024." at the financial conference call in the first quarter of 2023, li bin pointed out that the break-even point will definitely be pushed back. as for the delay, nio hopes that the delay will not exceed one year. he xiaopeng also previously stated that xpeng motors expects to achieve breakeven in 2025.

now, it is only more than a year away from the originally announced profit time. for them, expanding the scale means the possibility of increasing gross profit margin, and it also means that they are closer to profitability.

mass market, a tough battle

car companies always hope to reach different consumers through different brands. byd, which dominates the market with a market size of about 150,000, hopes to reach the high-end market through yangwang and fangbao. "weixiaoli" started from the market of more than 300,000 yuan. now if it wants to increase sales, it must enter the mass market, that is, the market of less than 300,000 yuan.

letao hopes to seize the joint venture fuel vehicle market share of 150,000 to 200,000 yuan, which is also the sales hinterland and last fortress of joint venture vehicles. xiaopeng mona m03 lowers the smart driving function to less than 150,000 yuan, and this is a market dominated by byd. there is no doubt that this is a highly competitive market.

in the past two years, weilai and xpeng motors have not had an easy time. nio’s share price fell from around us$67 to around us$7, and xpeng’s share price fell from around us$56 to around us$12.

companies are facing operating pressure, and employees are also having a hard time. employees of nio’s alps project and xpeng both said that their year-end bonuses in 2023 will not be generous. the huge sales of ledo l60 and mona m03 made them feel that this year “the year-end bonus should be secure.”

facing a broader mass market, car companies hope to bet on more hot products through more models.

in the first half of next year, weilai's firefly, which is targeting the 100,000 level, will be delivered. xpeng motors chairman and ceo he xiaopeng revealed in the latest internal letter that the company plans to launch nearly 30 new or modified models in the next three years to complete the two important cornerstones of the rmb 100,000 to 400,000 level layout.

however, the competition among car companies has long been no longer a competition of single models. almost every company faces more than one opponent. building a car worth 400,000 yuan and building a car worth 100,000 yuan are completely different logics.

even though the cumulative sales of ideal cars are about to reach 1 million units, they have been unable to avoid the encirclement of wenjie cars in the field of extended range. if li auto launches a pure electric suv next year, it will meet its old rival nio again. xpeng g6 and ledo l60 both compete against tesla model y, and weilai es9 and xpeng g9 are also competing models.

at the china electric vehicles 100 people forum held not long ago, byd chairman wang chuanfu said that the industry has entered a tragic knockout stage. on the one hand, the industry has entered a structural adjustment cycle, and increasing industrial concentration is an inevitable stage; on the other hand, the new energy vehicle market has entered a cyclical adjustment stage, and companies need to form scale effects and brand advantages as soon as possible.

how "wei xiaoli" should play their cards will test their decision-making wisdom and also affect the survival of the company.