On October 26th, Zero Run Motors and Stellantis Group officially announced a global strategic partnership. Stellantis plans to invest approximately 1.5 billion euros to acquire approximately 20% equity in Zero Motor, which will make Stellantis Group an important shareholder of Zero Motor and secure two seats on Zero Motor's board of directors.
According to the announcement by Zero Runner, Stellantis and Zero Runner will also establish a joint venture called "Zero Runner International" in a ratio of 51:49, with Stellantis Group appointing the CEO of the joint venture. Except for the Greater China region, the joint venture company has the exclusive right to export and sell to all other markets worldwide, as well as the exclusive right to manufacture Zero Run automotive products locally.
This is the industry's first global leading automaker to collaborate with a new power company from China on global electric vehicle projects. By leveraging the extensive commercial strength and accumulation of Stellantis Group globally, the joint venture will accelerate and expand the sales of Zero Run's high-tech and cost competitive products worldwide.
The achievement of this cooperation between China and foreign countries on the one hand represents that Chinese intelligent electric vehicle companies are leading the world, demonstrating that Zero Run Automobile has industry-leading and cost advantages in self-developed intelligent electric technology across the entire region; On the other hand, this also provides new models and avenues for Chinese automobile companies that are exploring globalization and intending to go overseas.
Pioneering joint venture model in the industry to layout overseas markets, with Stellantis and Zero Run Automobile achieving mutual benefits
The current global new energy vehicle market is showing exponential growth, with sales exceeding 10 million units in 2022. Driven by this huge and promising market, Chinese new energy vehicle companies are seeking to go global and gain market share in overseas markets as soon as possible.
However, in terms of sea route selection, various automobile companies are not interconnected. NIO Motors has chosen to adhere to its direct sales model and replicate its user service operations in the European market; Xiaopeng Automobile and BYD choose to collaborate with top dealers to reduce sales costs.
However, these models require long-term operation and heavy investment. At the same time, in the context of the EU's anti subsidy investigation, going abroad is subject to more policy and regulatory restrictions, and in the future, we still need to rely on self built factories and supply chain systems to achieve localized production and operation.
If Zero Run Motors and Stellantis choose to establish a joint venture to expand their overseas market, they can effectively utilize Stellantis' accumulated marketing service system overseas for many years and quickly enter multinational markets. Furthermore, Stellantis has multiple production and manufacturing bases worldwide, and the export of Zero Run automotive products has also saved capital investment in heavy assets. It has invested more resources in the research and development of new generation technologies, maintaining continuous leadership.
In the view of Zhu Jiangming, Chairman of Zero Run Automobile, the difference between the automotive industry and traditional industries going overseas is that it requires local cooperation and global cooperation. Every country regards the automotive industry as a pillar industry, so it is only through a cooperative model that we can go global and bring China's good products and technologies to create value. Only then can Chinese cars go global and achieve globalization
Carlos Tavares, CEO of Stellantis Group, further explained in a media interview that when it comes to customs and localized production issues, Zero Run Motors may encounter some problems, which may make it difficult to penetrate overseas markets. Stellantis can help Zero Run Motors have more distribution networks and marketing measures overseas, thereby accelerating its layout in overseas markets.
Another aspect is scale. Our company has a sales volume of 7 million, which can bring economic benefits of scale and turn it into better competitiveness. Consumers are more able to bear their prices, and customers from both China and overseas can get better product price ratios. "Tang Weishi emphasized that both companies attach importance to technological development and can further improve the development speed of new technologies.
Correspondingly, Zero Run cars can help Stellantis achieve its electrification goals in the "Dare Forward 2030" strategic plan by inputting technology leading electric vehicle ecosystems in the fierce electrification transformation. At the same time, cooperation will also be beneficial for Stellantis to maintain positive growth in the Chinese market.
In March last year, Stellantis released the Dare Forward 2030 strategic plan, which pointed out the direction for its development in the next decade. According to Stellantis' plan, by 2030, the group's annual sales of pure electric vehicles worldwide will reach 5 million units; All passenger cars sold in Europe are pure electric vehicles; 50% of passenger cars and light trucks sold in the United States are pure electric vehicles.
In the Chinese market, Tang Weizhen candidly stated in an interview that Stellantis also needs to have a certain level of exposure to the Chinese market, and the group is currently not very successful in the Chinese market. Previously, Stellantis Group conducted research on multiple potential partners, and the reason for choosing the Zero Run car was not only due to the willingness of Zero Run itself, but also due to its industry position and technological advantages.
So we are very inclined to rely on a successful Chinese company, which is one of our intentions. If we want to win the Chinese market, we had better first win over a good Chinese company to help
Zhu Jiangming pointed out that relying on the cooperation between Stellantis and Zero Run Automobile, both parties can bring 1+1> The effect of 2 is to better play their respective roles.
Strong alliance, Stellantis and Zero Run complement each other's advantages
Previously, Volkswagen acquired a 4.99% stake in Xiaopeng Automobile, marking a milestone in the "reverse joint venture" of Chinese automobile companies, while the cooperation between Zero Run Automobile and Stellantis went even further. Stellantis' investment in Zero Run is more than twice that of Volkswagen's investment in Xiaopeng Automobile, with a shareholding ratio of four times and more board seats, which also means that the cooperation between the two sides is more in-depth.
But this does not mean that Zero Run cars have lost their initiative. Wu Qiang, Co President of Zero Run Automobile, pointed out that in terms of shares, the Chinese shareholders formed before the listing, including the concerted action of the founder, as well as investors from several provinces and cities, as well as other Chinese shareholders, all of which hold nearly 50% of the shares, still far greater than the foreign party, and there has been no substantial change in the shareholder structure.
The combination of Zero Run Automobile and Stellantis is not a fleeting investment, but a global strategic partnership achieved through deep cooperation. The relationship between the two is not the perceived acquisition of domestic car manufacturing new forces by global leading automakers, but rather the complementary advantages of Big Fish and Fast Fish.
Now we choose another smarter approach, which is to give half of the profit from the cake and let him use his own ability to quickly sell the car and make half of the money, including me. This way, the cake can be made quickly and the cake size is large, even half of it is better than going solo to get a 100% small cake
Wu Qiang pointed out that Zero Run has limited resources and scale, and will not invest resources on a large scale overseas. The primary focus is on the input-output ratio. Stellantis has a well-known presence overseas and a strong after-sales service system, which can help Zero Run quickly expand in overseas markets.
Stellantis Group is the best globally integrated group, with 14 automotive brands including Maserati, Jeep, Alpha Romeo, Dodge, Abbas, Citroen, Peugeot, etc. It is a leading global automaker and travel solution provider.
Its global market share is the best indication. According to Tang Weishi, Stellantis has a 20% market share in Europe, 26% market share in North America, 26% market share in Latin America, and 15% market share in the Middle East. These brands work together to expand Stellantis' customers to over 130 countries worldwide and conduct manufacturing operations in over 30 countries.
At the same time, Stellantis Group is one of the most profitable and efficient global automotive groups in the world. In 2022, Stellantis Group sold over 6 million cars worldwide, achieving a net revenue of 179.6 billion euros and a net profit of 16.8 billion euros. In the first half of 2023, with an adjusted operating profit margin of 14.4%, Stellantis Group continued to become one of the highest profit margins in the global automotive industry.
Strong revenue capability is an important weapon for Stellantis' transformation towards electrification. In the fierce market competition and transformation process, it is necessary to continuously invest funds, research and develop the latest technologies and products, explore new channels and networks, and complete adjustments in production and supply chain.
Stellantis has done very well in other fields around the world, including efficiency, products, services, sales and service networks. We have also conducted inspections in Italy and France, and it is indeed very efficient and has cost control advantages. Zhu Jiangming believes that there is a great potential for future cooperation between the two sides, as the market and products complement each other and generate greater value.
On the other hand, as a new force in car manufacturing based on technology, Zero Run Automobile is not only a car manufacturer, but also a provider of intelligent electric technology solutions. The era of LEAP3.0, represented by central domain control, has ushered in the era of global self research and self manufacturing, which accounts for 70% of the total vehicle cost and has significantly increased in sales.
LEAP3.0 is the culmination of Zero Run Automotive's eight year comprehensive self research achievements. This technology is based on the four leaf clover central integrated electronic and electrical architecture, and integrates global safety/design standards, CTC2.0 technology, new oil cooled electric drive technology, advanced intelligent driving, and cabin systems to form a complete set of intelligent electric vehicle technology solutions, representing the most comprehensive core technology layout of intelligent electric vehicles.
At the same time, LEAP3.0 can meet the iteration needs of the next five years, with a platform generalization rate of up to 88% and a strong cost competitive advantage. The high reuse rate of the platform greatly improves the efficiency of new product development and update iterations.
The application of these technologies has also enabled Zero Run cars to reach a technological harvest period after years of energy storage. In 2022, Zero Run Motors delivered a total of 111168 new cars, a year-on-year increase of over 154%, leading the industry in terms of growth rate; From June to August 2023, the delivery of Zero Run cars reached 41734 units, achieving monthly deliveries exceeding 10000 yuan for several consecutive months, firmly ranking among the new forces.
Zero Run Automobile is one of the most impressive electric vehicle startups, and like Stellantis, it has a similar technology leadership philosophy and entrepreneurial mindset. Through this strategic investment, a blind spot in Stellantis Group's business model will be solved, and it will profit from Zero Run Automobile's competitiveness in China and other markets, "Tang Weishi said.
The cooperation between Stellantis Group and Zero Run Automobile, just like the cooperation between Big Fish and Fast Fish, will be the most important foundation for global long-term strategic cooperation with highly complementary advantages. Both parties will maintain independence, amplify each other's advantages, and collaborate in development to support the development of the global new energy market.
The cooperation prospects are optimistic, and Zero Run has taken the lead in landing
The firm investment from leading global groups represents the most direct recognition of the R&D achievements of Zero Run Automobile over the past 8 years, and also proves that Zero Run Automobile has paved the way for becoming both a main engine factory and a comprehensive solution provider for intelligent electric vehicles.
Zhu Jiangming's global positioning of Zero Run Automobile lies between the entire vehicle and its components, providing intelligent solutions to global vehicle enterprises through four different technological cooperation modes. These four modes, from shallow to deep, are component technology sharing, cooperation based on electronic and electrical architecture, cooperation based on the lower body, and cooperation and sharing at the vehicle level.
For Zero Run Automobile itself, the development of technology cooperation mode will also have a positive impact on its valuation model, entering an important turning point in the era of technology realization, forming a diversified profit combination mode, which is the second curve of revenue growth.
In the cooperation, Zero Run Motors provides a technology and architecture platform, and the investment belongs to light assets. They are all mass-produced products, and the software is relatively easy to replicate to the partners, so the marginal income and gross profit are relatively high.
With the cooperation with Stellantis Group, Zero Run Automobile will enhance the reuse of its technology platform and increase sales. Its advantages in scale and cost control through comprehensive self research will become increasingly prominent, and Zero Run Automobile's second growth curve in achieving technological revenue will be rapidly amplified.
On the other hand, thanks to an investment of approximately 1.5 billion euros, Zero Run Motors will continue to make efforts in research and development, sales, and service. Maintaining stable cash flow is a key aspect for current electric vehicle startups to cope with market competition, and some of them have already announced their downfall due to their failure to control operational efficiency.
Zhu Jiangming pointed out that since its establishment in 2015, Zero Run has had the highest efficiency in fund utilization. On the premise of releasing many automotive products and investing in research and development, compared to the top few new car manufacturers, Zero Run Automobile uses the least cash and has the least financing amount so far.
With the addition of funds in the future, we hope to invest more resources in intelligent driving and potential technology research and development. At the same time, we will also invest more resources in domestic network expansion and global market expansion
These investments will form a virtuous cycle, helping Zero Run cars better cope with the pressure of price wars in the domestic market in the short term, and forming a positive cycle in the long term, using technology to drive products, firmly ranking at the forefront of the industry and taking the lead in the new energy vehicle elimination race.
Wu Qiang further pointed out that from a national strategic point of view, this cooperation between Stellantis and Zero Sport has created a new business card and new cases of the "the Belt and Road". This represents the recognition of top European car companies towards Chinese companies and will continue to maintain investment momentum in China, with a positive outlook on the Chinese electric vehicle market.
The trend of globalization is irreversible, and this time it has profound significance. At the same time, it has built a strategic alliance between traditional top car companies and Chinese new power cars, to learn from each other's strengths and weaknesses to develop future electric vehicle businesses