Car Capital Waiting For The Outbreak: New Energy Vehicles Within Three Years To Meet Inflection Point?

Just as autopilot needs a commercial landing schedule, new energy vehicles often face the "torture" when usher in inflection point.

Recently, Xiaopeng automobile President Gu Hongdi said at a forum that the penetration of new energy vehicles is expected to reach 10% in the next two to three years, and usher in the inflection point of the explosive growth of the industry. At present, the penetration rate of new energy vehicles is only 5%. Judging from the development experience of personal computers, smart phones and other industries, the general new technology will impact traditional products, and the penetration rate will reach 10%.

People in the industry are happy to discuss inflection expectations, though they have different definitions of inflection points. Prior to this, the chairman and CEO Li Bin of Wei Lai automobile also put forward a similar concept from the enterprise level. He believed that Wei Lai entered the qualifying stage in the three year beginning this year, that is, he really accepted the test of the market, and from 2022, the whole industry, including Wei Lai, will enter the "elimination tournament".

In 2021 or 2022, the consensus reached by the industry was the time node for new energy vehicles to enter the inflection point. At that time, subsidies for new energy vehicles in China basically disappeared, and some industry and investment circles believed that new energy vehicles could reduce the cost to the level of fuel vehicles.

Only when the industry can control costs at the level similar to that of fuel vehicles, will new energy vehicles be profitable. Recently, in an exclusive interview with the economic news reporters in twenty-first Century, Zhang Yang, executive director of Ningbo Private Technology Investment Co., Ltd. (hereinafter referred to as "Yongmin investment"), said: "the profit of the new force of the new car will take three years." Zhang Yang used to be an investor in new energy automotive companies, and he is still optimistic about the future of new energy vehicles.

What's interesting is that there seems to be a slight discrepancy between new ventures, investment institutions and traditional car companies. In the same forum, for the development prospects of new energy vehicles, Yang Dayong, general manager of new energy in Changan, believes that the 2023-2025 year will be the node of new energy vehicle explosive growth.

Prior to that, Lian Qingfeng, deputy secretary of the new energy committee and spokesman of Beiqi new energy company, also said that the industry is too optimistic about the node of the new energy vehicle during its mature period. He believes that the cost of electric vehicles and fuel vehicles will not be flat until 2025.

In fact, from the point of view of the layout of new energy vehicles, most of the traditional car companies are slower than new ventures: when Tesla has launched many models, upgraded its mileage and gained market recognition, many foreign brands only released the electrification strategy. However, the time they launched the new generation of products had been around 2021 and 2022.

Despite the early layout and rapid development of domestic enterprises, it is undeniable that the rapid growth of new energy vehicles is laid in the context of strong policy support. At present, new energy vehicles rely on subsidies, lack of sales growth and so on. These problems are gradually highlighted. Whether the new energy automobile industry is worth investing and how to invest has become a problem of reconsideration.

New energy vehicles "fever"

The expectation of inflection point comes from the fact that the new energy vehicle industry is still in the stage of "burn money" expansion. The ideal situation is to spend enough money to cultivate users, accumulate technology, increase sales, and ultimately reduce costs, but in fact, this link has not been opened up.

Under the backdrop of subsidise, new energy vehicles are bidding farewell to high growth. Data show that in September this year, the domestic new energy vehicle production and sales volume were 89 thousand and 80 thousand, respectively, down 29.9% and 34.2%, respectively, and have declined for three consecutive months.

The impact of subsidised slope goes beyond the industry's expectations. Many new energy vehicle companies set this year's target is probably very difficult to complete. Statistics show that the first three quarters of this year, including BYD, Beiqi new energy, Changan new energy, Jianghuai new energy, Wei Lai, and other car companies, sales target average completion rate is less than 50%.

The impact of subsidized slope decline has, on the one hand, reduced the enthusiasm of consumers to buy new energy vehicles. On the other hand, it has also increased the pressure of car dealers or dealers. In twenty-first Century, the economic report reporters learned from previous visits that despite the implementation of the new subsidy standard in late June this year, many cars did not rise in price, which means that the enterprises made up some of the cost of subsiding the subsidy.

Sales are sluggish and superimposed on expenditure. New energy vehicles are still hard to make. In particular, new car companies need large amounts of financial support in vehicle development, new car launch and other stages. Take the example of the Wei Lai automobile listed in the United States as an example. Some time ago, it kept on making headlines due to sustained huge losses.

It is worth mentioning that the new energy vehicle industry has invested heavily and has a long cycle. The traditional car companies have also begun to introduce external funds, such as Changan's new energy, which has been publicly listed for capital increase, but for various reasons, the capital increase has not been implemented. "Now this point seems to be that the capital is not too concerned about the new energy (automobile) market, but in the past few years new energy (automobile) is the darling of the capital market, and at that time, we all liked it." Yang Dayong, general manager of Changan new energy, reluctantly said.

Despite the end of the "hot money" era, there are several new investment and financing projects in the field of new energy vehicles this year. Gu Hongdi, President of Xiaopeng automobile, concluded that first, capital investment in new energy vehicles tended to be prudent; two, the focus of financing was very high; three, the valuation expectation was more reasonable.

This indicates two points. On the one hand, capital is still optimistic about the long-term development prospects of new energy vehicles; on the other hand, the industry will have a brutal "shuffle". "In the past two years, a lot of new energy automobile enterprises will die." Zhang Yang said, "but if we can stick to it, there will be good results."

Mining industry chain investment opportunities

With the development of the new energy vehicle industry, the development opportunities of the upstream and downstream industry chain have also been welcomed. As a matter of fact, the development of upstream and downstream is more complementary to new energy vehicles.

"There are so many investment opportunities on new energy vehicles that they can invest in cars, batteries, electric drives and so on." In Yang Dayong's view, the growth of new energy is in the ascendant, and all kinds of business models emerge in an endless stream, bringing many opportunities to investment. "We should see from the production, marketing, manufacturing to the whole level of our new energy investment."

Zhang Yang believes that in the field of new energy vehicles, the valuation of vehicle manufacturing is still high and has a high threshold. However, batteries, versatile components, high-performance components for electric vehicles still have good opportunities.

"Once the sales volume comes up, the demand for batteries is huge, but capacity building is not built in the short term. Now we can see that the second tier echelon, many good technology enterprises are basically full capacity, so now there is a window period. Zhang Yang said, "if we don't vote now, we will never enter the first tier."

Zhang Yang previously worked in the Sino marine equity investment fund Co., Ltd., and led the investment of China Chuang hai to Ranger cars. Later, based on the demand of industrial investment, China Chong Hai incubated the new platform for Yongmin investment, and Zhang Yang was still responsible for related businesses.

At present, Yongmin investment in the field of new energy vehicles mainly includes two parts: first, the overseas sales of new energy vehicles; and the two is the field of new energy vehicle components. It is reported that Yongmin investment has formed strategic partnership with Yulai, wma, Wuling, Jianghuai and so on. It is helping these enterprises to complete the quality system certification to enter the European market and lay the foundation for its rapid entry into the European market.