Written by Song Yuting
Recently, due to Luckin’s short-selling scandal, all walks of life have begun to examine themselves. As the leading company of new car-making forces, Weilai was immediately targeted. Not only is this inseparable from the high-profile behavior of its founder Li Bin, but its "horrible financial reports" are even more eye-catching.
Profits have been losing money for four consecutive years, and the "horror financial report" is worthy of the name
It is understood that Weilai sold 20,565 vehicles in 2019, exceeding the total of previous sales, with revenue of 7.825 billion RMB, but its financial report data shows that the net profit for 2019 was -11.295 billion, a huge loss.
Nio has sold a total of 34,218 vehicles since its establishment, and its net profits for four consecutive years: -2.536 billion, -4.985 billion, -9.66 billion, -11.295 billion. The debt is snowballing, and the more cars it sells, the more the company loses.
As of December 31, 2019, NIO’s total assets were 14.582 billion and liabilities were 19.403 billion. Its net assets were negative and it was insolvent.
Some netizens have calculated that nearly 30 billion of Weilai’s accumulated funds have been wiped out. Combining the sales data, it means that for every car sold for 360,000 yuan, the loss is 549,300 yuan.
Is this the end of Li Bin’s entrepreneurial journey? Not really.
Forward R&D is the halo
The fundamental difference between Weilai and Luckin is technology.
Why Weilai has crazy fans all the time to whitewash it? Not only to get the wool that "the first car owner can enjoy a lifetime free nationwide battery replacement service", but also because Weilai has a positive attitude R&D halo.
And it has obtained and is applying for more than 4,000 patents, including more than 500 patents for battery swap stations.
Although the new car-making force is also known as PPT car-making, those who have no real ability will die after a few struggles. With the blessing of positive R&D halo, Weilai’s business is not very good. An "international master" teaches you something as simple as making coffee (telling stories).
Misfortune never comes singly, money and people are lost
But considering the speed of burning money, Li Bin and Lu Zhengyao can become confidants.
Although it is well known that cars cost money, in 2019 alone, Weilai’s costs were 19 billion, which is 1.58 billion per month.
This includes R&D expenses of 4.4 billion yuan, but Weilai uses foundries. When the production and manufacturing costs are relatively low, it can actually spend half of the sales cost. Such a lavish spending. As a result, as of December 31, 2019, it only had 1.056 billion cash in its account, which was far from enough to support its average monthly expenditure of 1.58 billion last year.
At the same time, NIO will also have to repay 9 billion of short-term liabilities of 19.4 billion in debt in 2020.
Misfortune never comes singly. At this critical moment of life and death, its management fell apart.
Shareholders Temasek and Hillhouse Capital have successively reduced their holdings of NIO shares. Hillhouse (Nio's third largest shareholder) even left no shares in February and liquidated its positions.
Vice President Zhuang Li, Co-founder and Executive Vice President Zheng Xiancong, Chief Financial Officer Xie Dongying, Vice President of Finance Wang Dongning, Vice President of User Development Zhu Jiang and others also resigned one after another.
Coupled with the critical impact of the epidemic at the beginning of 2020, Weilai is simply a combination of all critical impacts, and its future has become even more confusing.
Just when everyone was watching the decline of Weilai, a divine turning point came!
Can NIO still persist?
At the end of February, the Hefei Municipal Government invested in Weilai. The project plans to raise 14.5 billion yuan, including 1 billion yuan for the headquarters and R&D base and 1.5 billion yuan for the second production base.
Today, April 8, NIO officially released its delivery data for March 2020. Data show that NIO's overall delivery volume in March reached 1,533 vehicles, a year-on-year increase of 11.7 and a month-on-month increase of 116.8.
Not only that, NIO delivered a total of 3,838 vehicles in the first quarter of 2020, even exceeding the target of 3,400 to 3,600 vehicles expected in its 2019 Q4 financial report.
On the one hand, it is the government’s blessing, on the other hand, it is the continuous orders, both of which convey a message to the outside world: Weilai still has fun!
To be honest, losing money in business is not terrible, what is terrible is the pause. Even if you are trying to make up for it, as long as you have sales and can still operate normally, you will have a chance to turn around.
No, as soon as the sales volume rose, Weilai’s bones immediately became hardened. Its official announcement: From February to mid-March this year, Weilai Automobile’s new orders have returned to December 2019. 70% level. During the epidemic, the company actively innovated in marketing and meticulously managed the supply chain. Coupled with the gradual recovery of offline stores, NIO is confident about 2020.
Car owner: Our goal is to earn money for a lifetime
In fact, Weilai has never acted as a "one-man show". During the epidemic, it was still able to sell sales despite the decline in sales in the entire industry. The increase is caused by real car owners.
For a long time, Weilai car owners have been "demonized" and "sad and crazy" supporters of Weilai. It is not just a matter of product strength, but more importantly, like the people who consume Ruixing, Weilai users are also very concerned about how to continue the wool-gathering behavior of "first car owners can enjoy lifetime free nationwide battery replacement service" for a longer period of time.
But it is the existence of this kind of thinking that makes Weilai’s journey difficult.
At the same time, Weilai has given more added value to its products, such as membership, experience, fine interior decoration, WeChat customer maintenance group, etc., all of which cost money and people. After all, any company’s energy and resources are limited.
Compared with Tesla, the leader in the electric industry, it is doing its best to increase production capacity and reduce costs, and insists on "subtraction" behavior, which is worth learning from NIO.
In recent years, Tesla has not only had fewer and fewer products and options, but also fewer and fewer accessories, and its wiring harnesses have become shorter and shorter. The interior central control of Tesla model 3 eliminates the need for only a tablet.
The localization of Tesla is bound to have an impact on Weilai, and it is urgent for Weilai to "make subtractions".
Currently, the country has introduced policies that are favorable for the development of electric vehicles, that is, the new energy vehicle purchase subsidy and purchase tax exemption policies have been extended for 2 years. Whether it can seize this opportunity to turn around depends on NIO's fortune. iDailycar
This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.