Wei Xiaoli, whose sales did not meet the standard in 2022, suffered even more losses

Although the increase in sales is not small, Wei Xiaoli’s profit is more and more lost, and even further expanded.

Recently, NIO, Xiaopeng and ideal 2022 financial reports have been released. Data show that in 2022, NIO’s total annual revenue reached 49.27 billion yuan, an increase of 36.3% year-on-year; the annual net loss reached 14.437 billion yuan, an increase of 259% year-on-year; Xiaopeng’s total revenue was 26.86 billion yuan, an increase of 27.9% year-on-year; net loss reached 9.14 billion yuan, an increase of 88.1% year-on-year; ideal annual revenue 45.29 billion yuan, an increase of 67.7% year-on-year; net loss 2.03 billion yuan, an increase of 534.4% year-on-year.

In 2022, "Wei Xiaoli" delivered 122,500, 120,800 and 133,200 vehicles respectively, an increase of 34%, 23% and 47.2% year-on-year respectively. While the scale is expanding, the loss is also expanding, and the phenomenon of "the more you sell, the more you lose" still exists.

In this calculation, last year NIO sold a loss of 118,900 yuan, Xiaopeng sold a loss of 75,700 yuan, ideal to sell a car will lose 15,200 yuan.

Huatai Securities released a research report saying that "affected by the price cuts of Tesla and BBA, Wei Xiaoli’s short-term sales volume and gross profit margin may be further pressured."

continuous losses

Previously, Li Xiang had publicly stated that he would achieve a monthly income of over 10 billion yuan in 2022, and would also bid farewell to seven consecutive years of losses. However, according to the current trend, the ideal turning point is to increase losses rather than decrease them.

2022 is a big year for Li Auto’s products. Higher-end products mean higher added value and higher profit margins, but in fact, the ideal L9 has not achieved the desired effect in driving up gross profit margins.

Data show that Li Auto’s gross profit margin in the fourth quarter of last year was 20.2%, and the annual gross profit margin was 19.4%, compared with 21.3% in the previous year. In this regard, the official said that the reason for this phenomenon was due to the loss of Ideal ONE inventory provisions and purchase commitments last year.

What the official said was the ideal consumer rights controversy that occurred in the middle of last year, specifically because Ideal stopped production of Ideal ONE in order to pave the way for the upcoming L series new car, but they slashed the price of the car in order to clear the inventory, which made those Ideal ONE owners who bought cars before feel aggrieved, because the official sales had made them a similar promise of "no price reduction, no production suspension".

Finally, Ideal has to promise owners that it will add another three years (20G/month) of free traffic on the basis of the original data service, and extend the supply guarantee period of the original parts to 12 years to ensure that Ideal ONE owners are not affected by the discontinuation of the model.

However, the ideal vehicle gross margin of 19.1% is still high compared to NIO and XPeng Motors.

Li Auto is 44.11 billion yuan in the same period, the gross profit margin of cars is 19.1%, and the average price of bicycles is 331,000 yuan; NIO’s car sales revenue in 2022 is 45.5066 billion yuan, the gross profit margin of cars is 13.7%, and the average price of bicycles is 373,000 yuan; XPeng Motors is 24.84 billion yuan, the gross profit margin of cars is 9.4%, and the average price of bicycles is 206,000 yuan.

There are two core reasons for the increase in the scale of NIO’s losses. One is that the quality of profits has dropped sharply, and the other is that too much money has been spent. From making cars to changing electricity, to making mobile phones, batteries, and chips, NIO has almost laid out the entire car manufacturing industry chain, directly driving NIO’s R & D investment in 2022 to increase by 136% year-on-year, reaching 10.836 billion yuan.

The core reason for the poor performance of financial data is that Xiaopeng’s cars are sold less. For the whole year of 2022, XPeng Motors delivered 120,757 vehicles, an increase of 23.0% over 2021, only about 50% of the target was completed, and it was also overtaken by NIO’s 122,486 vehicles and the ideal 133,246 vehicles.

Challenges remain

In order to improve the current situation, XPeng Motors made significant adjustments to its internal organizational structure on November 30, 2022, establishing five virtual committees to open up communication channels across the company’s business lines to improve collaboration efficiency. At the same time, XPeng Motors co-founder Xia Heng resigned as an executive director of the company’s board of directors. *******cheng, the former vice president of XPeng Motors, chose to leave after being appointed as XPeng Motors CEO assistant, and Wang Fengying, the former general manager of Great Wall Motors, joined XPeng Motors as president.

Judging from the actions of XPeng Motors in recent months, it is undeniable that He Xiaopeng is indeed making a drastic reform. But so far, the change has not been significantly effective. Under He Xiaopeng’s plan, the company’s sales are expected to increase significantly from the third quarter of 2023.

On March 10, XPeng Motors launched the mid-term model of Xiaopeng P7 – the new P7i, but unlike the current car companies have reduced the price, the starting price of the new P7i 249,900 yuan is not only compared with Xiaopeng P7 without any decrease, but also increased by 40,000 yuan. In the eyes of industry insiders, such pricing may make XPeng Motors’ recovery more difficult.

In terms of NIO, after years of high R & D, heavy service, and high investment, NIO has gradually gained a place in the high-end market, but the problems facing it are still severe. After experiencing high growth, the scale growth rate has gradually declined, even lower than that of many new power automakers.

"According to the retail data of the China Automotive Center, NIO ranks first in China’s high-end electric vehicle market with a transaction price of more than 300,000, with a market share of 54.8%. In the high-end electric vehicle market with a transaction price of more than 400,000, the market share reaches 75.8%." Li Bin stressed at the performance conference that it is obvious that this is the most important trump card for NIO at present.

According to incomplete statistics, NIO has accumulated losses of over 90 billion yuan since its establishment, including a loss of over 4 billion yuan in just one quarter last year.

In order to get more sales, NIO launched NIO ET5 in December 2021 and began to grab the market downwards. However, perhaps for the reason of protecting the brand positioning, the minimum price of ET5 328,000 and did not fall below the 300,000 range, and although this car was placed high hopes by Li Bin, it cannot reach its target of 10,000 per month.

It is regarded as the first to achieve the ideal of profitability. In 2023, Li Auto’s sales target is 250,000 – 300,000 vehicles. At the same time, the operating income will impact the scale of 100 billion.

In order to further lower the price, Ideal L7 and L8 launched a cheaper Air version. Ideal also focuses on two high-voltage pure electric vehicle platforms this year, Whale and Shark, which can solve the problem of slow charging and achieve the same cost as the extended-range model.

"In less than a year, Li Auto has achieved full coverage of the $300,000 to $500,000 family SUV market. In 2023, Li Auto will challenge the 20% market share of the entire luxury SUV market in the $300,000 to $500,000 price range," Li Xiang emphasized in a conference call after the fourth quarter and full year 2022 earnings.

But it cannot be ignored that the entire automobile end point market is currently involved in a "price war", and multi-party extrusion will erode the living space of more new forces. Although Wei Xiaoli is full of confidence, the cruelty of the market may add further variables to this year’s planning.