Behind the frenzied financing of new car companies: Only 7 companies have "passed on the road"

Yesterday, the new car manufacturer Betta announced the completion of the B round of 500 million U.S. dollar financing. The main investors include China FAW Group, Qidi Holdings, and the Ningde Times. One of the founders, Dai Lei, revealed that the Series C financing will be completed within one year. After the first models are put into production, the IPO will be launched. Weilai Motor also previously stated that it plans to go to the US this year and it aims to raise 2 billion U.S. dollars. The financing of new car companies has kept pace, but it is rare to see the mass production delivery. Enterprises that have obtained production and marketing qualifications are even more embarrassing. Under the tide, who is swimming naked?

Investment in the early stage of construction or over 20 billion investors' enthusiasm

The automotive industry is an industry with high capital investment barriers. A number of industry insiders have stated that for a new car manufacturing company, the successful production of a car with a production volume of 10,000 units may have a capital investment of more than 20 billion yuan.

Weima Motor CEO Shen Hui had previously stated that he expects to invest RMB 304 billion in building vehicles. Car and home CEO Li Xiang is more optimistic and estimates that capital expenditure will be at least 20 billion yuan. The chairman of Ranger Motor once gave a simple capital expenditure on construction. His estimate was that at least 20 billion vehicles should be invested in the production of 10,000 vehicles. For these new car companies, listing financing is the ultimate way.

The appearance of new car companies can always be brightened, and promotion based on capital and listing can always make them gain the favor of investors.

At present, there are three new vehicle-building vehicles that are financing or investing billions of dollars in investment, including Weilai Automobile, Weimar Automobile, and Danshi Auto. Among them, the founders of Weilai Automobile and Weimar Automobile come from Internet companies and traditional car companies. As a typical start-up company, they rely heavily on VC financing. As for the Panshi Auto and Wanxiang Automobile, the investor is a major shareholder of the listed company and has strong financial strength and does not need much external financing in the short term. In addition to Wei Lai completed the D round of financing, other companies are in the early round of financing such as round A and round B.

Weilai Motors and Weimar Automobiles are more favored by venture capital. Li Bin, founder of Weilai Automobile, has successfully established a business on many occasions. The five-wheeled financing of Weilai has exceeded RMB 14.6 billion, with a valuation of RMB 30 billion. The main investors include Gaochun Capital, Tencent, Jingdong, and Sequoia China. The total financing amount of Weimar Automobile exceeds RMB 12 billion, and the main investors are Capital, Vision Energy, Seven Seas Capital, Baidu Group and others.

However, even listed companies such as Tesla, which are world-famous new-build vehicles, are also stretched across the capital chain. Tesla has been losing money for many years since its listing in 2010, and the break-even seems to be far behind. According to Bloomberg, Tesla consumes an average of 6,500 U.S. dollars a minute and has had negative free cash flow in five quarters. The ability to support break-even financing is crucial to a new car maker.

There are only 7 new energy production qualification “licensing” in the financing boom

In fact, the purpose of financing the new energy vehicle wind outlets is precisely the pain point of the new construction vehicle companies being criticized by all walks of life.

Li Shufu, chairman of Geely Holding Group, once said publicly: “Some companies have obtained qualifications for new energy vehicles, but they have no strength to produce automobiles. Instead, they look for investment through 'qualification'.

According to industry sources, the new energy automotive industry is in an upswing stage. Technology, appearance, and marketing may be slightly different from the traditional automotive industry, but its essence should be mass production and marketing. If you just use the opportunity to speculate, or even actual financing, the negative effects it brings are not limited to the automotive sector. "On the other hand, if the new forces car is tagged with 'financing', it will affect the promotion and healthy development of new energy vehicles, and it will also be a blow to the Chinese auto industry," said a sales manager at a traditional car manufacturer.

According to public information, there are currently 16 car companies that have obtained new energy production qualifications, and not all of the 16 can produce and sell new energy vehicles. Their products need to be listed in the "Announcement of Road Motor Vehicle Manufacturing Enterprises and Products" of the Ministry of Industry and Information Technology. Of the 16 auto makers, only 7 were qualified by the Ministry of Industry and Information Technology, namely Yundu New Energy, Beiqi New Energy, Jiangling New Energy, Lanzhou Zhidou, Changjiang Automobile, Future Automobile, and Hezhong New Energy. The production base of automakers has been slow to build, and there has been no production vehicle tracking.

At the 2018 Beijing Auto Show, companies such as Weilai, Weimar, Xinte, Yundu, Singularity, and Future, all exhibited models that are expected to be delivered in volume, while companies such as Ai Chi, Baiteng, and Zhengdao have entered the company later. The concept version of the production car is on display, and there are still distances from mass production.

According to public reports, the rise of new energy vehicles in 2011 and the rise of the internet builder movement in 2015 have already reached more than 300 new car manufacturers, and the number of companies waiting in line for approval has reached more than 200. For the new force manufacturers, if they cannot obtain the electric vehicle production qualifications of the National Development and Reform Commission, they will not be able to enter the recommended list of the Ministry of Industry and Information, and they will be unable to produce or market them.

In this context, let the new car companies have to choose to use the "shell" to build a car. After that, the cooperation between Beiteng and FAW was interpreted as finding a qualification for production. In addition to Baiteng, Weilai Motors produced OEMs in Jianghuai, and Xiaopeng Automobile found the hippocampus for OEM.

It is understood that if a new automobile manufacturer cannot acquire a qualified enterprise to obtain its own production qualification, it can only use the method of producing and selling in cooperation with other companies to save money to achieve mass production.