The summer of 2020 is not the summer of the band.

NIO Inc. financing, ideal listing, XPeng Inc. eager to try to impact IPO. There is no profit, but the market capitalization is close to hundreds of billions of yuan. no matter how hard-core rock stars are, they can't be impatient like Li Bin, Li Xiang and he Xiaopeng.

Keep playing music and dancing? It doesn't exist. The market has only two years left for the new power to prove itself.

01 killing of the three Kingdoms

Cars, as the largest single consumer goods, have always competed with each other.

New energy vehicles began to gradually replace traditional fuel vehicles, smelling the major forces that have changed over the past century, and began to perform in turn in recent years, reminiscent of the surging winds and clouds of smartphones 10 years ago.

We can classify participants in the new energy vehicle industry into three types:

1. Tesla, Inc., who leads the industry.

Tesla, Inc. has obviously established a brand effect, and the industrial chain has basically taken shape. It is estimated that global shipments will reach 500000 vehicles in 2020. Tesla, Inc., who is finally recognized by the capital market, has a market capitalization of more than $270 billion and has a status similar to that of Apple Inc on a smartphone.

two。 A traditional car company that plans to make a late strike.

One of the most powerful and active is the German Volkswagen. According to Volkswagen's latest plan, by 2029: ① will launch 75 pure electric vehicles and 60 hybrids; ② will sell a total of 26 million pure electric vehicles. China's earlier transformation of traditional car companies is BYD (SZ:002594).

3. The last participant, the new car-building force, wants to get a piece of the mess.

As car building is an extremely expensive process, after years of elimination and optimization, not many enterprises are still alive. Relatively representative in China, there are still NIO Inc., XPeng Inc., the ideal of the listing of US stocks just now, Yundu, Weima, Zero run, and so on.

In this killing of the three Kingdoms, by 2020, the new power of car building is more tenacious than the market thought.

[1] more tenacious than expected

At the beginning of 2020, Tesla, Inc. 's Shanghai plant was completed ahead of schedule, and the production capacity of model 3 climbed smoothly.

As early as 2019, the market began to worry about the sharp drop in the cost of the domestic version of Tesla, Inc., which will lead to a reduction in the price. As expected by the market, the price of the domestic version of Tesla, Inc. has dropped all the way, and the low-end version has fallen to 300000 yuan, and the price belt directly overlaps with NIO Inc., XPeng Inc. and other models.

In the face of Tesla, Inc., who has outstanding performance and brand recognition, the market has predicted that it will be a blow to the domestic new energy car brands that have grown up under care.

The logic of market concern is that the new power of car-building, which does not have the financial strength and does not have its own factory, will bear the brunt of the fall. However, the fact is that after more than half a year of direct competition, the tenacity of the new forces is much higher than the market expectations.

Let's take the sales of pure electric vehicles as an example. according to the caliber data of the Federation of passengers, in 2019, the new forces of domestic car building sold a total of 72000 vehicles, with a market share of 8%. At that time, the domestic market share of Tesla, Inc. 's domestic plus imports was 5%.

In the first six months of 2020, Tesla, Inc. achieved high growth as scheduled, with domestic sales reaching nearly 50, 000 vehicles, of which 46000 were domestic versions of model3, and the market share rose rapidly to 19%.

But unexpectedly, the total shipments of the new car-building forces reached 34000, and their market share increased to 13%, of which NIO Inc. 14000, Weimar 8000, and XPeng Inc. 4000, ranking among the top three of the new forces.

[2] NIO Inc. who came back from the dead

In the second half of 2019, NIO Inc. 's report showed that he had only 3.5 billion yuan in cash on hand. For Weilai, which lost more than 10 billion yuan a year at that time, there seems to be no future.

And NIO Inc. sold only 21000 new energy vehicles in 2019, poor financing and lower-than-expected shipments, the market is worried that NIO Inc. will become the next new car-building force to fall down.

2020 since the recovery of the epidemic, thanks to the hot sales of ES6 and the release of the new ES8, especially in May, June and July this year, 3436, 3740 and 3533 products were delivered, setting a monthly high for two months in a row. ES6 also became the best-selling new energy SUV model in the first half of the year, with sales of 11711 vehicles.

In addition, recently, after a total of 11.3 billion yuan of financing, NIO Inc. came back from the dead.

After addressing the two biggest concerns in the market in 2019, NIO Inc. 's share price rose from a low of $2.10 to as high as $16.40 in six months. As the leader of the new power of domestic car-building, it is obvious that the capital market has given enough expectation and encouragement.

02 Longzhong pair

As the new power of car building is not as vulnerable as the market expected, and traditional car companies with huge vehicle manufacturing advantages accelerate their bets on new energy vehicles, the competition among the three major forces in the industry will intensify. Tesla, Inc., traditional car companies and new forces have a tendency to divide the world into three parts.

Although it is still difficult to predict who will win, we can find the core elements of tracking these forces.

If you use harsh financial analysis to look at these new forces of car-building enterprises, it is obviously worthless, but fall into the "dogmatism" misunderstanding of the research company. The author believes that at this stage, there are four dimensions of competitiveness comparison, which will be the key to predict which new car-building power will stand out.

[1] continuous financial support

As car-building involves huge capital expenditure, especially the new forces of car-building also need huge R & D and marketing investment, whether smooth financing has become a matter of life and death.

We now observe that the financing channels of the new power enterprises in the head are still relatively smooth, while the second echelon is gradually out of sight, so we can judge that there will be only a few players left in the new forces of domestic car building in the future.

Since the beginning of this year, NIO Inc., XPeng Inc., and ideal have all had large amounts of financing, and in the short term they will not be trapped by money:

NIO Inc.: at the end of April, he signed the final investment agreement with strategic investors such as Hefei Construction Investment. Strategic investors and NIO Inc. Automobile respectively invested 11.26 billion yuan in NIO Inc. China. According to the estimated monthly expenses of 600 million yuan, this financing can meet the company's needs in the next 18 months.

XPeng Inc.: XPeng Inc. just completed round C financing in November 2019, and in July 2020, it is said to have completed nearly two financing projects totaling US $800m in C+ round. At the same time, there is also news that stocks will be listed in the United States in August.

Ideal: Li Auto Inc. announced that he had completed US $550 million in D-round financing on June 24, 2020, and received about US $1.1 billion in IPO financing after the listing of US stocks on July 31st.

[2] sales volume

Even Tesla, Inc., the leading brand in the industry, has only made a small profit in recent quarters. The new power of car-building in China has started even later, and the profit is still a long way off.

Because capital markets tend to value companies on a market-to-sales basis, in order to get a steady stream of money, car-building newcomers must quickly prove that they can sell on a large scale.

As discussed earlier, NIO Inc. 's shipping trend in recent half a year is very gratifying. Ideally, with the rational ONE model of the added program SUV, it has achieved a sales performance of nearly 10, 000 vehicles in half a year, which is also commendable. On the other hand, XPeng Inc. 's performance is mediocre due to the direct competition of the P7 by model3 and other models.

At the same time, it should be pointed out that the new electric platform of mainstream foreign car companies will be mass produced in 2021-23, so the time window left by the market for new forces is only 2 years at most. The new power head enterprises, which have solved the worries of financing, will usher in the big test of sales, and the era of concept car building has passed.

[3] Strategic choice

The first two elements are short-term, and then we will discuss two medium-and long-term elements, namely strategic choice and product power.

Because of the cash cow business of fuel vehicles, traditional car companies are always coy about their investment in new energy vehicles. Although the new forces without historical baggage are ridiculed as "PPT cars", they do have better strategic flexibility.

Brocade researchers believe that the most important strategic choice is misplaced competition, which must establish a comparative advantage over Tesla and traditional car companies at an early stage.

NIO Inc.:As a new force most qualified to compete with Tesla, Inc. in China, NIO Inc. 's strategic choice is still differentiation. Although the price band of ES6 and ES8 overlaps with the domestic version of model 3, it is the SUV version itself, so the overlap of customer groups is relatively low.

At the same time, NIO Inc. is the most aggressive company in the car-electricity separation plan, and may have a chance to build a deeper moat with operational advantages (we will discuss the power exchange mode separately in future reports).

Ideal:The biggest feature is the difference in technology path. The ideal current model ONE chooses the add-on program, which is questioned as the difference between the fuel system and the battery system, but in fact, the add-on is the best technical way to solve the mileage anxiety at present.

Li Auto Inc. official said that ONE can achieve NEDC integrated operating mileage of 800km, urban operating mileage may exceed 1000 km.

The current market spread of power battery mileage is expected to be greatly increased, the short term is only in the patent certificate, especially the ternary battery has obvious cost constraints.

As a result, add programs may be difficult to become mainstream, but they may be the first to open up for the ideal in this market segment-and it is also a high probability that the ideal will return to pure electric in the future.

XPeng Inc.:Software has the largest investment and may become the core competitiveness. The XPeng Inc. P7 launched in April this year is a B-class car, which competes directly with cars such as model3 and BYD, but the actual product strength is mediocre and the performance is insipid.

However, as XPeng Inc. invests a lot in the field of self-driving, in which intelligent driving uses the most advanced chip technology, and pre-stack automatic parking / high-speed self-driving is the main selling point, XPeng Inc., who has average hardware strength, still has the possibility of misplaced competition.

In addition, compared with Tesla, the new forces of local car building all have a relative competitive advantage, that is, the after-sales service is very good, which will also help to form customer stickiness, especially if this competition is a long-distance run. Tesla, Inc. 's service deficiency may cause a certain loss of customer base.

[4] Product power

Product power is a less discussed point in the market.

Because for the penetration of early products, the main customer group is still mainly early adopters, with a high tolerance for products, but with reference to the smartphone industry 10 years ago, although there are many basic performance problems in the early stage, as the industry matures, product performance will become the most important competitiveness.

In addition, the biggest difference between new energy vehicles and the smartphone industry is that traditional car companies will not be replaced.

There are two main reasons for such a judgment:

1. Traditional car companies such as Volkswagen and Toyota have strong financial strength, and the cost of building cars is also the lowest in the world, and they do not have the disadvantage of backwardness.

two。 The core technology of the new energy vehicle industry chain revolves around the battery, and the battery technology is mainly in the hands of battery factories such as Ningde era, LG and Panasonic, so it is difficult to eliminate competitors by closed-loop ecosystem.

Under this assumption, as the traditional car companies accelerate into the field of new energy vehicles, it can be judged that the quality control of traditional car companies will become a huge competitive advantage. With the penetration of new energy vehicles rising from the current less than 5% to 30%, mass consumers are bound to attach great importance to safety, cost performance, reliability, quality control and so on.

The new forces of domestic car-building basically rely on outsourcing, and the time for the accumulation of manufacturing technology is relatively short. Even the current hot Tesla, Inc. also has the problem of product power. For example, model Y has a very low evaluation overseas and faces the risk of being sued for being suspected of "shoddy manufacturing."

Therefore, under the background that the new forces of car-building basically do not have their own factories, a problem that must be faced is that the rapid transformation of traditional car companies such as Volkswagen and Toyota may lead to a reduced-dimensional blow to manufacturing capacity; and with the volume of products, product power will become a problem that has to be solved with a lot of money.

From the perspective of intellectual property competition to observe the product power of NIO Inc., ideal and XPeng Inc., we can see that they all work hard, not only in the software system, but also in the further study of the three electricity system and technology. There are independent expectations of vertical integration on other core components of non-power batteries.

NIO Inc., in particular, has shown a trend of outbreak in the construction of patent barriers in the past three years. There are more than 3500 patent applications worldwide, of which invention patents, including applications, account for more than 2x3.

However, reading piece by piece, the patent "violent soldier" capability of the new power is still in the stage of "violent young soldiers," and there is still a long way to go in terms of technological structure and intergenerational level. At present, in the field of new energy, the value of the top patent family is worth tens of billions of dollars, and the new forces still cannot touch this threshold.

Finally, a few details: the ideal early basic core patents were transferred to BAIC Foton and so on. NIO Inc. 's switching complex mainly came from cost control and collusion with the will of the battery factory, while XPeng Inc. had the biggest deficiency in the core patent technology in the three power field.