Shulou(Shulou.com)11/24 Report--

In less than a month, there were two super-large-scale first-round financing on the new energy car track.

On November 18, Lantu Motor announced the completion of round A financing, with an amount of nearly 5 billion yuan, which is already very huge. But the larger financing event took place on October 20th.

On the same day, GAC GROUP announced that subsidiary GAC Ean completed round A financing, with 53 strategic investors taking shares, with a total financing amount of 18.294 billion yuan, making it the largest single private financing in the current new energy vehicle industry. Moreover, the post-investment valuation reached 103.3 billion yuan, which is the highest valuation of an unlisted new energy car company so far.

Through these two financing, it seems that people see the new energy vehicle investment and financing once again hot. However, it is found that the investment and financing of the new energy vehicle industry has cooled down, and the financing of new energy vehicle companies has become more difficult.

However, building cars is very expensive, and car companies still need to continue to spend money. Previously, Li Bin, founder of Xilai, said that the capital threshold for building a car is 20 billion yuan. By the end of 2021, he changed his mind and thought that he could not do it without 40 billion. Even Xiaomi, which announced the construction of a car in March last year, has been questioned by the media because of the decline in revenue and profits in the third quarter.

(the media questioned the financial pressure of Xiaomi to build cars.) Lantu A round of 5 billion yuan of financing is also considered not to be burned for long. It is understood that 40% of Lantu's 5 billion financing, or 2 billion, will be used for research and development. For Wei Xiaoli, the money can be burned up in three months. In the third quarter of this year alone, the investment in R & D of Xilai Automobile reached 2.94 billion.

This paper attempts to address three problems:

1. How about the investment and financing of new energy vehicles in the past ten years?

two。 Why are new energy car companies generally "short of money"?

3. Where should new energy car companies go to "find money"?

The investment and financing of new energy vehicles in China can be traced back to 2014. At that time, Tesla's Model S became popular in China. Although the price of Model S is as high as 700,000 yuan, which makes many consumers shout that it is too expensive, some people in the industry with a sensitive sense of smell have discovered the future business opportunities for new energy vehicles.

It was in this year that Li Bin founded Weilai Motor. In the face of the huge investment in building cars, the Internet man did not hesitate to make use of the power of capital to raise money quickly through the investment and financing market. It is rumored that Li Bin persuaded Liu Qiangdong to invest Wei at the dinner table with only 15 minutes of explanation. Dozens of well-known institutions, such as Temasek, Baidu Capital, Sequoia, Hopu, Lenovo, Warburg, TPG, GIC, IDG, pleasure Capital and so on, have participated in the investment of Lulai Motor.

Jian Liang, chief analyst of the Ecological Division of Ping an Bank, also takes 2014 as an important point when analyzing the investment and financing market of new energy vehicles. He believes that since 2014, the investment and financing cases of the domestic new energy vehicle industry have maintained rapid growth.

In 2015, the new energy car track set off a surge of investment, almost every few days investment and financing events, far exceeding the industry expectations at that time. According to incomplete statistics, in this year, there were as many as 30 new energy vehicle investment projects across the country, with a total investment of more than 100 billion yuan and a total planned production capacity of more than 3 million vehicles. Ideal car was founded in 2015, and Xiaopeng's round A financing took place in 2016.

The investment boom peaked in 2017, when there were 185 new energy vehicle financing events, higher than in previous years, according to company search data. Starting from 2018, the investment and financing of new energy vehicles began to decline. The number of investment and financing of new energy vehicles in 2019 was 55, down more than 30% from the same period last year. In 2020, there were 89 new energy vehicle track financing incidents, which still did not rebound.

If the first batch of new car manufacturers do not get enough financing at the beginning, the capital chain may break in the cold winter of 2018, and it will be difficult to slow down, and eventually decline, including Boxun, Baiteng, Sailin, Ranger and other new energy car brands. Even Li Bin, its founder, admitted that he "almost died" by the beginning of 2020.

As expected, the investment and financing of the new energy vehicle track is hot again in 2021, with a total of 239 financing events, more than 185 in 2017.

In this year, Weilai, Xiaopeng, Evergrande and Baoneng completed strategic financing. The total amount of financing for Lulai automobile exceeds 12.7 billion yuan, that of Xiaopeng exceeds 12.3 billion yuan, that of Hengda exceeds 22 billion yuan, and that of Baoneng exceeds 12 billion yuan. Even Ningde era, the supply chain company of new energy vehicles, raised more than 58.2 billion yuan in 2021.

However, the heat does not last long. In 2022, the investment and financing of new energy vehicle track is not as expected again, the main reason is:

First, the track growth rate of new energy vehicles began to slow down.

At present, some investors have divided the new energy vehicle industry from a high-growth industry to a mature industry. In September 2022, the retail penetration rate of domestic new energy vehicles reached 31.8%, and the ceiling can already be seen. Moreover, the growth rate of new energy vehicles is slowing year by year, and the growth rate will slow to 40% in 2023 from over 90% in 2022, according to Credit Suisse. As a result, investors will no longer be as enthusiastic as they used to be.

As an investment track with strong certainty, more than 60% of the VC / PE in the market has laid out the new energy vehicle industry chain. Now, investors are waiting for the circuit to break out and then pull out, rather than flocking to it as before.

Second, investors questioned the new energy track.

After November 2021, new energy has ushered in a wave of adjustments, mainly reflected in lower valuations. Prior to this, the development momentum of new energy vehicles is eye-catching, driven by capital, there has been a lot of blind investment. The valuation of many projects is too high, and there is even a problem of one or two levels upside down.

A typical zero-running car, which landed on the Hong Kong stock exchange on September 29, 2022, priced at HK $48 per share, fell by more than 35% on the first day, the biggest drop on the first day of listing that year. In exactly three months to November 29, its share price has fallen to HK $19.68 per share, a drop of 59%.

Investment institutions with zero-running cars have suffered heavy losses as a result. According to the China Business News, the per-share consideration costs of Zero Automobile Pre-A round financing, A round financing, B round financing and C round financing are 4.54,12.26,20.66,27.26 yuan respectively. As of November 29, Zero Motor Hong Kong shares were trading at HK $19.68. It can be seen that the B-round and C-round investors of zero-running cars have lost money. For round An investors, investing in zero-running cars is not necessarily a profitable investment. Cornerstone investors have lost even more, roughly at current share prices, or more than 60 per cent.

Also this year, the trillion-yuan market capitalization of BYD was "stock god" Warren Buffett and the world-renowned private equity fund BlackRock, many times reduced holdings to cash, once caused the market panic. Moreover, Buffett sold new energy on behalf of BYD, turned to embrace the old energy-Western oil, even more alarmed many investors.

This year, Wei Xiaoli and other new forces have not performed very well. The decline in sales of new forces has been overtaken by the new energy vehicle companies of traditional car companies, and is facing the dilemma that it is difficult to complete the annual KPI. Compared with the new energy car companies of traditional car companies, the competitiveness of the new power is not strong. Previously, the valuation logic of "Wei Xiaoli and other new energy vehicles completely replaced fuel vehicles" was also broken.

Specifically, at present, the investment and financing of new energy vehicle track is mainly focused on raw materials and parts, while vehicle manufacturing can only be ranked second, and from 2021 to now, its proportion is getting lower and lower.

According to the VC / PE Market report of the third quarter of 2022 released by the Investment Research Institute, IT and information technology have replaced the previously hot new energy and become the most favored industry for investors.

Lack of money new energy automobile industry investment and financing is not as expected, car companies are very short of money.

At present, the new power Wei Xiaoli has not made a profit, and the profit time in the future is uncertain. According to Wei Xiaoli's current cost and gross profit margin, in order to break even, the annual sales of Wei Xiaoli need to be raised to 204000, 360000 and 121500 respectively. In the first three quarters of this year, Wei Xiaoli's sales were 82400, 98600 and 86900 respectively, with a big gap.

The new energy car company, which is a traditional car company, is also in a loss situation. Cyrus, the parent company, posted a net loss of 2.675 billion yuan in the first three quarters, an increase of 147% over the same period last year. The net loss of polar krypton in the first half was 759 million yuan, compared with a loss of 1.01 billion yuan in 2021. BAIC Langu made a net loss of 3.5 billion yuan in the first three quarters and has lost more than 15.2 billion yuan since 2020.

New energy car companies also face the dilemma of rising costs. Power batteries, which account for the larger cost of new energy vehicles, are also rising in the prices of upstream raw materials, such as nickel, cobalt, lithium, lithium carbonate, lithium hydroxide, lithium hexafluorophosphate and so on.

At present, new energy car companies are facing the tide of price reduction. Prior to Tesla's price reduction, has disturbed the domestic new energy vehicle market, the media have asked whether other car companies follow the price reduction. Car compensation, which is about to decline at the end of 2022, will also affect the sales of new energy vehicle companies next year and even in the future, delaying profit time.

Car building is very expensive, before the realization of hematopoietic capacity, new energy car companies still need a steady stream of capital investment in the future, which can only rely on continuous capital injection in the investment and financing market.

Moreover, the current new energy vehicle industry has begun to move from electric to intelligent. In the competition in the intelligent second half, autopilot is very important. The research and development of this technology is even more expensive, and the investment and financing market in this area has also changed from hot to cold this year.

At the beginning of the year, investment and financing in the self-driving industry was still hot. IT orange data showed that the domestic self-driving industry had an average of 10 monthly financing events in the first three months of this year. But it began to decline after that, with an average of seven financing events per month, and even only five investment and financing events per month in September and October. Compared with the 144investment and financing incidents and the financing scale of 93.2 billion yuan in the domestic self-driving industry in 2021, as of November this year, there were only 92 investment and financing incidents, with a financing scale of only 24 billion yuan.

Today's investment and financing environment also makes it very difficult to create car companies at the beginning of these two years. As early as June this year, both he Xiaopeng and Luo Yonghao said that it was too late to enter the field of car building, and that capital had little interest in start-ups. Even if Xiaomi builds a car, even if the initial investment is 10 billion yuan and the investment will be 10 billion US dollars in the next 10 years, it will also encounter doubts in the industry about whether the funds are sufficient.

Looking for money in the future, for new energy car companies, the competition will be more fierce. In addition to new car-building forces such as Wei Xiaoli, newer new car-building forces such as Nezha have risen, traditional car companies such as Ean have also entered the new energy car track, and there are a number of start-ups that are sharing this slowing market.

How can we win in the competition? In May this year, when Wang Huiwen, co-founder of Meituan, attended a strategy meeting at ideal Automobile, according to his previous experience in the "hundred Regiments War" in the fresh field, he pointed out that in the stage of fierce competition, funds and resources would always be far from enough.

Therefore, whether newly innovative energy car companies or mature car companies, in order not to be eliminated, they must keep looking for money to ensure that they can continue to spend money.

For new energy vehicle companies, the most important investment and financing channel is state-owned assets, such as industrial guidance funds from local governments. The current new energy car track still has long slopes and thick snow, but it lacks the opportunity to "get rich all at once", which is not suitable for some investment institutions that make quick money, but it is very suitable for long-term investors such as local governments.

The government investment in Hefei has exported a classic case for the industry.

In 2019, under the cold winter of capital, the capital of Xilai Automobile was in an emergency, and its share price plummeted. In October of that year, the share price reached as low as US $1.19, close to the delisting red line of US $1. When Li Bin lamented that he would not make it through 2020, he received financial support from the Hefei municipal government. On April 29, 2020, Li Bin and the Hefei municipal government reached an agreement to settle in Hefei with an investment of 7 billion yuan. At the settlement ceremony, Li Bin appeared a smile that he had not seen for a long time. Later, he sighed that there was no one in the investment institutions to save them, and only the government would take a long-term view.

After the second half of 2020, under the tuyere of new energy vehicles, the stock price of Lulai began to soar, and Hefei gradually developed a world-class intelligent electric vehicle industry cluster because of this investment, achieving a "win-win" situation.

Investors in Ian and Lantu, which have recently received financing, are also mostly from state-owned assets. According to Lantu's announcement, this round of financing is led by the mixed reform fund of state-owned enterprises. Although Ean did not disclose the list of 53 investors in detail, the people's Insurance Capital, Nengchuang, National transfer Fund, Shenzhen Venture Capital, CITIC Jinshi, Guangzhou Industrial Investment Group, etc., all have state-owned or local government backgrounds.

At present, it is a good time for new energy car companies to seek support from state-owned assets.

In 2022, it has been called the first year of the local government parent fund by the industry. local governments are actively introducing venture capital institutions, trying to attract investment through industrial guidance funds, introduce high-quality industrial resources and social capital for local governments, and promote the transformation and upgrading of local industries.

For example, the total size of the first phase of the parent fund for the high-quality development of Nanning industry is 10 billion yuan, which is intended to be invested in new energy vehicles and spare parts and other industries. The industrial guidance fund of the Wuhan municipal government is up to 50 billion yuan, and some of the money will also be invested in high-end manufacturing industries such as new energy vehicles.

Moreover, compared with the past, local industrial guidance funds have not only continuously set new highs in scale and quantity, but also shown new characteristics in terms of investment proportion, return investment ratio, and fault-tolerant and error-correcting mechanisms. Some industrial funds have not only relaxed the return-investment ratio to 1:1, but also relaxed the identification standards for return-investment.

As an enterprise, whether it is a newly created car enterprise, a new power, or a new energy automobile company of traditional automobile enterprises, in order to obtain the financing of state-owned assets, we cannot just rely on telling stories and building concepts; we should settle down to build cars and provide good products and services. is the fundamental to attract state-owned capital.

Full-text reference

[1] "data report on Investment and financing of New Energy vehicles in the past Ten years", check big data Research Institute

[2] "Enlightenment 2022: analysis of Investment, financing, merger and reorganization of China's New Energy vehicle Industry", prospective Industrial Research Institute

[3] "VC / PE Market report for the third quarter of 2022", invested in Research Institute

[4] "the star track can't escape capital withdrawal: VC paid back money at the beginning of the year, but stopped investing at the end of the year." IT Orange

[5] "the industrial pattern has been preliminarily determined! The investment and financing of new energy vehicles has entered a "cooling-off period", China Energy News

[6] in the "group chat" of 2022 cross-border car construction, who goes in and out? Who is chatting and who is losing his voice? Qilu Evening News

[7] "Weilai, Weimar, ideal, Boxun, Baiteng, Sailin, Ranger are dead …... "watch the news.

[8] "Zero car sprint Hong Kong shares listed to raise funds to build a solid R & D and manufacturing capacity" chassis ", China Business News-bagel Finance and Economics

There are risks in the market, so you need to be careful when investing. This article does not constitute investment advice, not as a practical suggestion, trading risk at its own risk.

This article comes from the official account of Wechat: che Bai think Tank (ID:EV100_Plus), author: Chen Zhongshan, Editor: a Feng, typesetting: fat Tiger

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