Nio lost nearly 10 billion yuan to stop building its own factory, but Tesla is pressing harder.

Discussion in 'Tesla' started by siway, Mar 12, 2019.

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  1. siway

    siway New Member

    Nio lost nearly 10 billion yuan to stop building its own factory, but Tesla is pressing harder.

    2019-03-11 19:23
    Tesla's strategy in the Chinese market. It is almost a difficult problem for Weilai to deal with many domestic new energy auto manufacturers.

    Known as China's Tesla "Wei Lai" (Nio) in the Chinese market is encountering genuine Tesla's step by step.

    On March 6, Weilai Automobile announced that it will stop its production base construction plan in Jiading District, Shanghai. The strategy will focus on the vehicle manufacturing cooperation model. Tesla not only started construction at the super factory in Shanghai at the beginning of the year, but also announced on March 8 that a batch of Chinese syndicates signed a one-year loan agreement with a total amount of not more than 3.5 billion yuan, plus the Shanghai Super Factory.

    It is Tesla's pricing strategy that makes Weilai and many domestic new energy vehicle owners feel the most competitive pressure. Prior to this, Tesla's full-scale models showed significant price adjustments in China, including Model 3 price cuts of 26,000-4.4 million yuan, Model S price cuts of 11,300-27,700 yuan, and Model X price cuts of 174,500-341,100 yuan.

    Tesla's strategy is going to kill many domestic new energy automakers. Although they will announce a global price increase of 3% in the past two days, their prices still have an advantage. Faced with strong competitors, GPLP Rhino Finance believes that the entry of exotic squid will accelerate the development of new energy vehicles in China.

    The death of the self-built factory

    Previously, Weilai adopted the OEM model with Jianghuai and other car companies. Self-built factories are an essential option. Therefore, Wei Lai selected the car base in Shanghai, but what is worse is that Shanghai has quickly signed another more significant major project Tesla.

    According to the latest industry regulations, there are no low requirements for new regulations for new projects. It is necessary to meet a certain investment scale, and it must be applied on the basis of the planned production capacity of existing electric vehicle projects in the provinces. Therefore, it is obviously inappropriate for Wei to put the construction plan on Tesla, and it is difficult to get the second qualification in the short term. It is also expected that the Jiading factory will be cancelled.

    The latest news is that the Weilai Jianghuai Plant will be responsible for the production of the first three models, and the cooperation between GAC, Changan and Weilai will be another model, and production will no longer be dominated by Wei.

    Weilai Automobile's loss expanded

    Just two days before the news broke, on the morning of March 6, Wei Lai Automobile released its unaudited financial report for the fourth quarter of 2018 and 2018 as of December 31, 2018.

    According to the data, in the whole year of 2018, the total revenue of Weilai Automobile was 4.951 billion yuan, of which the total sales of automobiles was 4,852.5 million yuan, accounting for 98% of the total revenue. The annual net loss was 9.639 billion yuan, an increase of 92% compared with the same period in 2017.

    (Source: Eastern Fortune Network)

    Sensitive investors immediately reflected the expansion of losses on the stock market. Since the release of the financial report on March 6, Weilai's share price has fallen by 18% on Wednesday. As of March 8, 2019, Weilai's share price has fallen by 30.22% compared to the release of earnings.

    Weilai was forced to reduce investment

    Since 2018, Tesla has repeatedly cut prices, and the highest price reduction in the Chinese market has reached 300,000.

    In the face of Tesla's price reduction strategy, Wei Lai, in addition to a few words, almost did not react too much, and continued to devote himself to promoting his own ES8 car-making plan. In fact, it is no wonder that Wei Lai is still young relative to Tesla, and the development of car performance is still the first. Otherwise, it will not be able to fight with the big brother.

    However, Tesla is a provocation against Wei Lai.

    First, the continuous price cuts in the past two years, and then to Shanghai to build a factory, take a license to take the lead, let the onlookers feel uncomfortable for Wei, the original production base in Shanghai Jiading was also forced to close.

    However, it can be seen that Tesla is very valued for the Chinese market.

    But for this matter, Wei Lai Automobile once again said that it is mainly based on two reasons. First, at the end of 2018, the relevant Chinese authorities issued a new industrial management system, allowing R&D and design enterprises that meet the prescribed conditions to apply for the production capacity of the production vehicles and apply for road motor vehicle manufacturers and products. The cooperative manufacturing innovation model of Weilai and Jianghuai has been recognized by the government. Second, from the perspective of investment efficiency, adding more investment to the existing Hefei Jianghuai Weilai base will increase capacity and meet the capacity needs of Weilai products in the next 2-3 years.

    Obviously, the further expansion of losses has caused Wei to have to reduce investment.

    According to the news, in order to further reduce investment, Tesla also announced that it will close offline offline stores and implement online sales, which can reduce the price by 6%. And support for 7 days or 1000 miles (1600 km), no reason to return.

    Regardless of the advantages and disadvantages of the car performance, it is not enough in the price war. Weilai's new ES8 pre-sale price is 40~500,000 yuan. Tesla has some advantages for some models. However, Azure did not agree at all. Azure CEO Li Bin said that the sharp price cut by opponent Tesla is a kind of harm to the brand, and Weilai Automobile will not follow the price cut.

    Future earnings are not optimistic

    It seems to be very attitude, but if the sales in 2019 are not brought up, then with the price cut, it means further losses.

    In fact, the trend of narrowing sales has already appeared.

    Weilai Automobile's target sales volume in 2019 is 40,000 to 50,000 units, and due to the expected reduction in subsidies for electric vehicles in China in 2019, the delivery rate was increased at the end of last year, and some of the 2019 delivery has been previously advanced.

    In addition, in the past two months of 2019, the impact of the macroeconomic environment on the automotive industry has been clearly seen. In January and February of 2019, the number of ES8 deliveries was 1,805 and 811, respectively, compared with 3,318 vehicles in December 2018. Delivery fell more than expected.

    A drop in delivery means a drop in revenue. In the first quarter of 2019, revenue is expected to reach 1.309 billion yuan to 1.551 billion yuan, a decrease of 59.5% to 55.9% compared with the fourth quarter.

    But unfortunately, Weilai’s income has fallen, but spending has not decreased.

    According to its balance sheet, the cash flow of the book is not much. As of December 31, 2018, the balance of the cash and cash equivalents of the company, the restricted currency funds and the short-term investment was 8.3 billion yuan. How to use this money to get on the ES6 is still a problem.

    In this regard, GPLP Rhino Finance pointed out that some market participants believe that Weilai's prospects are very worrying. At present, there is no favorable point to support its stock price rise. It is recommended to invest cautiously.

    In addition, professional investor Financial Alphas also said straightforwardly: "Wei Lai company is too young to be perfect enough to go public. For me, this is similar to venture capital, not open market investment. I will not roll Whether Tesla is a good investment or a bad investment debate, but I think it is obvious that you should avoid investing in the car - the so-called China Tesla."
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  3. siway

    siway New Member

    It looks very possible, Tesla will kill Nio.....

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