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Outing-Bairen Media focuses on the evolution of the automotive industry chain.
Original Article by Roomy
Last week, we talked about “writing letters”. The theme of this week has changed again.
It’s about making money.
Some may say that talking about money is too vulgar, and making money is too naked. Well, let’s borrow a famous saying to talk about the necessity of making money.
The British writer Oscar Wilde once said: “When I was young, I thought that money was the most important thing in the world. Now that I am old, I know that it is.”
When He XPeng hears this, I believe he will also think that “making money” is the remedy for all affectations. Otherwise, can’t XPeng Motors taste anything else behind its listing in Hong Kong?
Li Xiang, the founder of Ideal Motors, previously stated publicly that he does not mind any form of financing, including secondary markets, bank loans, and bonds.
“It is very important to have more ammunition to win the long run.”
This sentence from He XPeng is the best example for Full Truck Alliance, which has just reached a market value of one trillion.
Why Tesla Is Recalling Its Cars
Although Tesla is listed first, what we want to talk about is not about Tesla’s “making money”.
It is about Tesla’s unprecedented recall announcement in the Chinese market. According to Bloomberg’s revelations, the recall quantity of Model 3 and Model Y is around 280,000.
Cheers and worries erupted at once. What’s the source of celebration? Because this is a voluntary recall by Tesla. What’s the concern? Is Tesla making the recall because of brake failure?
It is not the same as the “recall” we understood in the past, and it is not a substantial recall of the vehicle.
The “problem” mentioned by Tesla in the announcement mainly refers to: Tesla’s autopilot system may make it easier for drivers to inadvertently activate adaptive cruise control while driving, which will be updated fully through OTA. OTA updates will minimize the possibility of driver errors.
The purpose is clear, which is to eliminate any potential safety hazards. After all, with every accident, it will be on the top search, and the whole nation will supervise it, making Musk feel the urgency.
After the recall news hit the Weibo top search list, a female car owner who defended her rights at the Shanghai Auto Show said she hoped it was a good start.
After all, even Americans evaluate Musk like this. Outside the US market, he is particularly good at “reading the situation”.
Musk, once hailed as an honored guest in Germany, has recently been enraged. The Berlin super factory was originally scheduled to start production in July, but because of the additional battery factory in the later stage, it needs to go through the government approval process again, which has made Musk “very angry”.After experiencing difficulties in Germany, Musk became increasingly aware of the importance of the Chinese market. He tweeted, “Safety is always Tesla’s primary design requirement” to emphasize the purpose of this recall, “safety,” which may reflect Musk’s growing sense of crisis with China’s rapid progress in electric vehicles.
Some people have raised objections, suggesting that Tesla’s recall was a strategic move to secure its position in the Chinese market, stabilize its market value, and provide funding for Musk’s space projects, as he has already sold his last house.
The thinking behind this objection is worth considering, though it is rather subtle.
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XPeng has a more direct way of “making money.”
The title of “First Smart Electric Car in Hong Kong Stock Market ” now belongs to XPeng Motors.
On June 24th, XPeng announced its plans to launch a listing on the Hong Kong Stock Exchange, intending to issue 85 million Class A Ordinary shares worldwide. Less than a year after its listing on the NYSE last year, XPeng has again launched its impending listing in Hong Kong, sparking various speculations.
The general consensus is that “New players still need money, and they must move quickly.” It is beyond doubt that XPeng has a strong desire for capital to continue to advance and for a continuous inflow of funds, which is probably the main reason for its decision to seek a listing in Hong Kong.
However, the capital market has mixed opinions on this. XPeng’s stock rose nearly 7% in the U.S. market on the 23rd and then fell nearly 4% on the 24th, with the day’s close down 1.59%.
Nevertheless, this will not hinder XPeng’s listing in Hong Kong, as the competition in today’s electric vehicle market is stiffer than ever before, with a considerably larger number of players.
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The rapid expansion of new players has made everyone involved more cautious, and Tesla’s proactive recall is also a signal.
Going public in Hong Kong will allow XPeng to raise nearly HKD 18 billion in cash. Currently, XPeng has over CNY 30 billion in cash and the agreement to invest billions in Wuhan to establish a production base. We can see that XPeng’s focus is on investing heavily in production.
This is one of XPeng’s weaknesses – investment in technology, sales channels, and brand building remains insufficient. Seeking a listing in Hong Kong is a means of expanding investment, increasing production capacity, and accelerating development.
XPeng CEO He XPeng once said, “Entrepreneurial teams must have a ‘cautiously optimistic’ attitude, and slow progress during the startup process is actually fast.”
Now, XPeng cannot afford to be “cautiously optimistic” – as competitors with deep pockets continue to race ahead, XPeng must accelerate or be left behind.# There is nothing more important than “Mastering the Chinese Market”.
However, with so many players and diverse tactics, XPeng needs more diverse gameplay to convince the capital market.
10% equity for core employees is very attractive.
One of the diverse tactics is the “Voyah” brand.
After advancing the FREE listing time of Voyah, a new independent legal entity company was established, named “Voyah Auto Technology Co., Ltd.”, to operate the brand independently.
It is clear that, as a high-end electric vehicle brand determined by Dongfeng Motor Corporation, Voyah wants to take a different path, one that no other company in the Dongfeng Group has ever taken before.
This purpose is clearly visible in the announcement released by Voyah.
“Voyah Auto Technology Co., Ltd. was jointly funded by Dongfeng Motor Corporation and the Voyah Auto core employee equity platform, with a core employee equity stake of more than 10%.”
This seems to have created a new car-building architecture and mode of thinking, hiding two layers of profound intentions: one is Dongfeng’s all-out effort towards high-end development, and the other is its ambitious transformation towards intelligence.
Judging by the equity holdings, Voyah Auto’s core employees now own shares worth over 200 million yuan. In the future, strategic investors will also be introduced to explore more possibilities in the capital market.
In other words, “making money” is also necessary.
Prior to this, NIO was on the brink of bankruptcy due to insufficient funding, and all new automakers need considerable investment before they can become self-sufficient. For Dongfeng’s transformation, this change is imperative.
Someone on Zhihu asked, “Is it worth taking an offer from Voyah?”
One of the highly upvoted comments says, “Several former colleagues have joined Voyah, and everyone’s feedback is generally positive. Although there is a lot of overtime, the work atmosphere is good, and everyone feels they are doing the right thing.”
Although it is unclear which “former colleagues” are being referred to, it can be seen that Voyah’s external attraction is increasing. At the same time, Voyah’s self-confidence is also increasing.
Voyah has set a sales target of 13,000 units for its just-launched Voyah FREE in the first week.
One has to admit it’s a difficult target to achieve.
Starting from the listing date of June 19th, it will take less than 6 months until the end of the year, and the monthly sales average must exceed 2,000 units.
Ensuring Monthly Sales of 2,000 Units is Not Easy for a New Car Model, Especially in a Chip-Shortage Situation
Even with an order volume of 7,000-8,000 units, JiKe paused taking orders, sending a signal of the pressure involved in maintaining an average of 2,000 units per month.
In terms of price and positioning, the Landtour FREE competes positively with other models like the LiOne, NIO ES6, and ARCFOX αT.
JiKe Was Not Adequately Prepared
There is always a gain and a loss. Xpeng has made its way to Hong Kong’s stock market, while Geely halted its planned science and technology board IPO. The goal is to seek different external financing options for the JiKe brand.
However, Geely has kept its backup plan. The announcement stated that “once the relevant conditions are met, the company will actively push forward the listing of RMB stock issuance.”
These moves signal two things: first, new energy vehicles are still a target of market funds, and second, Geely is urgently adjusting its new energy strategy layout.
Since its inception, JiKe has declared its intention to pursue capital market opportunities as an independent company that operates with an innovative brand, user organisation, and business model, and promotes collaboration and open-mindedness. JiKe has not excluded the possibility of independent financing in the future.
Recently, Geely presented JiKe with an excellent opportunity to collaborate. JiKe’s global headquarters for intelligent technology settled in a joint investment with Ningbo to create high-end electric and intelligent automotive parts industries.
In JiKe’s equity ratios, Geely owns 51%, and Geely Holding Group owns 49%. The 49% stake held by Geely Holding includes core employee follow-on platforms and user equity platforms. JiKe appears to be ready to adapt to the collaborative consumer era.
However, a recent issue reflects that JiKe’s lack of preparedness still exists.
JiKe made a promise of “26.6 million yuan for large orders of naked cars before July 31” during the launch of JiKe 001, which recent car owners have criticized as “false advertising.”
The price of JiKe 001 WE version displayed on the WeChat ordering program changed to 28.4 million yuan, and customers were required to pay an extra 5,400 yuan during delivery. The official explanation was that “this is the net price of the product without subsidy, as the 2022 national subsidy policy is uncertain.”
Many car owners claim that money is not the issue, but they cannot accept this blunt explanation. Especially since originally standard features now require additional payment, such as a “variable skylight,” which became an “upgradeable feature,” and “support for 800V does not mean that 800V is used.” Measured information delivery has led to customer frustration.
“Refused” and “Changed Order for April 21” are similar messages that can be found on Xianyu.
For Zeekr, which is preparing to co-create with users, if this issue is not handled properly, it will be a big risk. Previously, Ideal, NIO, and XPeng have all encountered this issue, either by directly offering discounts or by converting into App store points.
It seems that An Conghui needs to communicate with Li Xiang.
Another $100 Billion Market Cap IPO is Born
When someone rises up, there will be someone building tall buildings.
On June 22nd, another $100 billion market cap IPO was born.
Manbang Group, with the ticker symbol “YMM,” was listed on the New York Stock Exchange with an issue price of $19 and an opening price of $22.5. Manbang Group will raise a total of up to $1.8 billion in funds, and the valuation will exceed $20 billion.
It is the fourth logistics company with a market cap of over $100 billion and is known as the “first stock of digital freight.”
Data shows that as of the end of December 2020, Manbang platform’s total transaction volume reached ¥1738 billion, with 71.7 million completed orders, accounting for 64% of the market share of China’s digital freight platform, making it the largest digital freight platform in the world.
Standing on the IPO stage, Zhang Hui, Chairman and CEO of Manbang, lamented that from the first day of its establishment, Manbang has been exploring the soil that no one has ever explored.
Today’s Manbang Group was merged from the once-archrivals Yunmanman and Huochebang, and officially established on November 27th, 2017.
These two unicorns were once in a state of hostility and fought for the market. After years of struggle, it was not until Xu Xin, the capital, said that “there was no meaning in burning money for two companies to compete with each other” that this long-lasting struggle was suspended and turned into cooperation.
Manbang can be considered as a perfect example of cooperation to raise both money and business.
At the beginning of the merger between Yunmanman and Huochebang, Zhang Hui had some hesitation and anxiety. When recalling this past, he feels quite emotional.
“IPO is not something that comes out of thin air.” Zhang Hui said that after the IPO, every brother and sister of Manbang should continue to regard themselves as ordinary people and believe that ordinary people can accomplish extraordinary things through hard work.
However, IPO is not the end of the story.
Currently, the digital freight market is not yet saturated, and with the continuous support of capital and the entry of various forces, there are still more service scenarios and profitable models to explore in the future.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.