Stellantis Group's stake in Zero Run will not change Zero Run's shareholders, equity structure, and business decisions. At the shareholder level, Zero Run's original founding shareholder group has a higher proportion than Stellantis, and Zero Run also holds 7 out of 9 seats on the board of directors. "On November 23, Wu Qiang, Co President of Zero Run Motors, stated in an interview with 21st Century Economic Report reporters that Zero Run Motors has achieved the fastest cross-border cooperation and delivery speed. According to the plans of both parties, Zero Run Motors will start delivering to Europe in the third quarter of next year through its international joint venture company, Zero Run C10, which will become a "test case" for both parties' overseas cooperation.
Just three days ago (November 20th), Zero Run Motors announced on the Hong Kong Stock Exchange that approximately 194 million new H-share subscriptions had been issued to Stellantis Group, with a total proceeds of over HKD 8.5 billion. It is reported that the additional issuance price is HKD 43.8. After the delivery is completed, the original shareholder Dahua Technology will no longer hold shares in Lingpao Automobile.
On the same day, Lingpao Motors released a new list of directors, announcing that Gr é goire Olivier and Douglas Ostermann, representing the Stellantis Group, would join Lingpao Motors' board of directors with immediate effect. According to previous information, Olivier will serve as the General Manager and Executive Vice President of the Stellantis Group Zero Run Technology Strategic Alliance Office, and Douglas Ostermann will serve as the Chief Operating Officer for China.
"The delivery represents that both parties have established a commercial cooperation relationship and built an 'engineering ladder' for overseas business. The first chapter can be considered a turning point." Wu Qiang revealed that the real work and heavy workload will unfold in the next time, and Europe is the key market for the first step. Although there is cooperation with Stellantis Group, Zero Run does not have experience in overseas markets. There is a lot of room for imagination in the cooperation between the two parties, and there is a lot of things that can be done, The next six months will focus on implementing tasks, and there may be a precise guide in three months.
In fact, after the two sides announced the landing of their cooperation at the end of October, the industry was not optimistic, and the stock price of Zero Run Motors quickly plummeted. The main reason was that the founder, chairman, and CEO of Zero Run, Zhu Jiangming, cashed out more than HKD 180 million through the exit of Dahua Shares. Afterwards, Zhu Jiangming and others promised not to transfer or reduce their holdings of Zero Run Shares in any way within the next 10 years, and the stock price saw a slight rebound.
It should be noted that unlike the previous "reverse joint venture" between Volkswagen and Xiaopeng Motors to develop vehicle models for the Chinese market and enhance competitiveness in the Chinese market, the cooperation between Zero Run Automobile and Stellantis focuses more on overseas markets, pioneering a new cooperation model of joint venture layout in the global market.
Stellantis and Leapmotor will establish a 51:49 "Leapmotor International" joint venture in the Netherlands. Except for Greater China, the joint venture has exclusive rights to export and sell to all other markets worldwide, as well as the exclusive right to manufacture Leapmotor products locally. The chairman of the joint venture company is Zhu Jiangming, and Stellantis appoints the general manager.
The equity structure of the joint venture company has two meanings. Firstly, when Zero Run International encounters issues such as trade protectionism, the major shareholder Stellantis Group has the ability to ease or solve them. Secondly, in terms of overseas expansion, Stellantis Group is allowed to hold the controlling stake, which can exert its subjective initiative and mobilize Stellantis Group's global sales resources. The core point of cooperation between the two parties is to increase sales at the fastest possible speed, and to set up all transaction structures and processes The promotion revolves around this point Wu Qiang explained.
Specifically, in terms of overseas layout, Zero Run will take the lead in expanding into the European market through its international joint venture, with Zero Run C10 expected to be delivered in the third quarter of next year. Wu Qiang stated that Zero Run Automobile will not completely rely on Stellantis Group's current offline channels as a shopkeeper. Zero Run should not only utilize Stellantis Group's rich existing channel resources, but also introduce the online channels and information collection experience formed in China into the European market.
For choosing the form of export instead of building factories locally, Wu Qiang believes that "each model has its own advantages and disadvantages, which needs to be accounted for economically. Currently, the export cost is relatively low, and even paying a 10% tariff has a good cost advantage. However, in the future, as tariffs further increase, the advantage of local manufacturing may gradually become apparent
In his opinion, the annual production capacity of Zero Run cars in China can reach 700000 units, which can fully meet overseas export demand. Even if there is a significant increase in overseas sales of Zero Runner in the future, Zero Runner will not plan to invest and build a separate factory in overseas heavy assets, but will use the existing factories of Stellantis Group or third-party outsourcing.
Don't make it so easy to expand overseas. The overseas market is not full of gold, waiting for Chinese electric vehicles to occupy. For car companies like Zero Run that have no overseas development experience, what we see is the market challenges brought by different cultural, political, regional, and consumer characteristics
According to the financial report, in the third quarter of this year, Zero Run Automobile achieved a revenue of 5.656 billion yuan, an increase of 31.9% year-on-year. During the reporting period, it achieved a positive gross profit for the first time in a single quarter, with a gross profit margin of 1.2%, which was improved compared to the same period in 2022 (-8.9%) and the second quarter in 2023 (-5.2%).
At present, the company's operating cash flow has turned positive, and the gross profit margin in the fourth quarter will be slightly higher than the 1.2% disclosed in the third quarter, which will gradually increase next year. "Wu Qiang revealed that on this basis, with the development of the business, it is expected to achieve a positive net profit by the end of 2025 or early 2026, "2024 and 2025 are quite important years, and we already have sufficient financial reserves. In the future, we may conduct selective financing according to business needs, but there will be no large-scale financing in the near future."