Caixin News Agency, December 6th (Reporter Xu Hao) As of December 5th, "Weixiaoli" has all announced its performance for the third quarter. Among them, Ideal Automobile still maintains its leading position and is currently the only profitable new force in the automotive industry. After experiencing the downturn in the first two quarters, NIO and Xiaopeng Motors both achieved a "bottoming out rebound" in the third quarter, with significant growth in multiple indicators such as revenue, gross profit, and net profit.
As a new car manufacturing enterprise, although there has been an improvement in performance, long-term orientation and cost reduction and efficiency improvement are still issues that need to be continuously adjusted and balanced. How to achieve cost reduction and efficiency increase is a key keyword repeatedly emphasized by the three car companies mentioned above during the third quarter conference call.
After acquiring the production equipment and assets of the first and second advanced manufacturing bases from Jianghuai for 3.16 billion yuan, NIO Chairman Li Bin stated in the third quarter financial report conference call, "If NIO's cars are all produced by itself, costs will decrease by 10%. NIO will make adjustments to projects that have not been profitable for three years or have not contributed to gross profit improvement, such as battery production."
Ideal gross profit margin reaches 22%, with Xiaopeng increasing income but not increasing profits
Ideal Automobile not only stands out in terms of delivery volume, but also in terms of financial indicators, it indicates that Ideal Automobile is developing towards a healthy and healthy enterprise direction. Since achieving profitability for the first time in the fourth quarter of last year, Ideal Automobile has achieved profitability for four consecutive quarters, with a net profit of 2.81 billion yuan in the third quarter of this year.
According to the financial report, Ideal Automobile delivered 105108 new cars in the third quarter, a year-on-year increase of 296.3%. This quarter, it won the championship in sales of SUV models priced above 300000 yuan and new energy vehicles priced above 300000 yuan. Along with it came an increase in revenue: Ideal Automobile's total revenue in the third quarter was 34.68 billion yuan, a year-on-year increase of 271.2%. Among them, the vehicle sales revenue was 33.62 billion yuan, an increase of 271.6% year-on-year.
It is worth mentioning that the gross profit margin of Ideal Automobile reached 22% in the third quarter, and the gross profit margin of the automobile also exceeded 21%. As of the end of the third quarter, Ideal Automobile had a free cash flow of 13.22 billion yuan and a cash reserve of 88.52 billion yuan, an increase of 14.7 billion yuan compared to the end of the second quarter.
In the third quarter, NIO Automobile not only achieved a historic high in delivery volume and revenue, but also saw a significant reduction in losses compared to the previous quarter, and an increase in gross profit margin.
The financial report shows that NIO's revenue in the third quarter was 19.07 billion yuan, a month on month increase of 117.4%; The net loss was 4.557 billion yuan, compared to 6.056 billion yuan in the previous quarter; The gross profit margin of the entire vehicle has significantly increased from 1% to 11%, returning to double digits. At the same time, NIO's car delivery volume in the third quarter was 55432 units, a year-on-year increase of 75.4% and a month on month increase of 135.7%, setting a new record for quarterly delivery.
In addition, NIO's cash reserves are 45.2 billion yuan. NIO Chief Financial Officer Feng Wei stated, "Thanks to the increase in average selling price, continuous reduction in vehicle costs, and economies of scale, NIO completed the issuance of convertible senior bonds with a total principal of $1.15 billion in September and October, further strengthening its balance sheet and providing impetus for NIO in fierce competition."
Xiaopeng Motors saw an increase in delivery volume and revenue in the third quarter compared to the previous quarter. According to the financial report, Xiaopeng Motors delivered 40008 vehicles in the third quarter, an increase of 80.18% year-on-year. Xiaopeng Automobile's total revenue in the third quarter was 8.53 billion yuan, an increase of 25.0% year-on-year and 68.5% month on month; The sales revenue of automobiles was 7.84 billion yuan, an increase of 25.7% year-on-year and 77.3% month on month.
However, compared to the two "friend merchants" mentioned above, the profitability of Xiaopeng Motors still needs to be improved. Xiaopeng Automobile's gross profit margin in the third quarter was -2.7%, a decrease of 16.2 percentage points from the same period last year. In terms of net profit, Xiaopeng Automobile's net loss in the third quarter reached 3.89 billion yuan, an increase of 63.6% year-on-year and 38.6% month on month.
NIO's "Endless Survival" Ideal Impact Month Delivers 50000 yuan
In contrast, the ideal car's ability to achieve good gross profit margin indicators cannot be achieved without its strategy of reducing costs and increasing efficiency.
"In the short term, business cost reduction will be the main focus, while in the medium to long term, project platformization, including procurement volume and cost accounting, will be used to bring procurement prices back to a reasonable level. At the same time, opportunities for cost reduction and efficiency improvement will be sought from end to end and the entire chain, including product research and development, technological innovation, etc." said Ma Donghui, President of Ideal Automobile.
After the initial stage of entrepreneurship, more new car manufacturers must reflect and adjust in order to gain opportunities for continued development in the increasingly competitive industry. Since November, NIO has made a series of decisions to reduce costs and increase efficiency.
On November 3rd, Li Bin issued an internal letter to all employees, mentioning that NIO will carry out adjustments related to organizational and resource investment directions, including reducing around 10% of redundant personnel and institutional settings. "NIO Auto will make adjustments to projects that have not been profitable for three years or have not contributed to gross profit growth, such as battery production." Li Bin emphasized at the financial report meeting, "In order to lay off employees, there will be a one-time financial expenditure increase of several hundred million yuan in expenses."
While striving for survival, NIO is also making active strategic adjustments and more reasonable personnel allocation. At the end of November, NIO Automobile signed agreements with two major car companies, Changan and Geely, to engage in strategic cooperation on battery swapping business. Li Bin said, "We will open up the battery packs and battery swapping stations of mass market brands to our partners. Currently, the charging pile business has basically reached a breakeven point, and there are also investors interested in independent financing from NIO Power. We cannot rule out NIO Power's independent financing."
On the day of announcing its third quarter financial report, NIO also announced on the Hong Kong Stock Exchange that the company had signed an agreement with JAC Motor to acquire production equipment and assets from JAC for the first and second advanced manufacturing bases, with a total price of approximately RMB 3.16 billion excluding taxes. "If NIO's cars are all produced by itself, the cost will decrease by 10%," said Li Bin.
In addition, while reducing staff, NIO has further expanded its channel construction. "At present, there are around 5700 sales personnel, more than half of whom were newly added in September and October," Li Bin further revealed.
Xiaopeng Motors has been making adjustments earlier. Since last year, Xiaopeng Motors has undergone significant reforms in its executive team, organizational structure, and marketing channels. "Thanks to the upgrade measures in strategy, organization, management team, and product technology planning this year, Xiaopeng Motors' performance in the third quarter exceeded expectations and entered a preliminary positive cycle. By the fourth quarter of next year, it will enter a high-speed development positive cycle," said He Xiaopeng, Chairman of Xiaopeng Motors, on the financial report conference call.
"Under the leadership of President Wang Fengying, the sales channels are undergoing a transformative transformation, which I believe will make the entire system more efficient and flexible, with faster channel expansion speed and targeting more third - and fourth tier cities." He Xiaopeng believes that channel upgrading and expansion will become one of the important driving forces for Xiaopeng's sales growth in 2024 and beyond.
While improving the operational efficiency of the company, "Weixiaoli" is also preparing to make a comeback in the fourth quarter. After achieving a delivery volume of over 40000 vehicles for two consecutive months, Ideal Automobile stated that "it will deliver 50000 vehicles in December." Ideal Automobile's delivery guide for the fourth quarter is 125000 to 128000 vehicles. Based on its performance in the first two months of the fourth quarter, a delivery volume of over 44000 vehicles in December can meet the target.
To achieve delivery goals, Ideal Automobile has recently launched a series of limited time discount policies, including a 2.5% ultra-low financial annual fee rate discount for consumers who order Ideal L7, L8, and L9 models. In terms of terminals, in Beijing, the maximum subsidy for L7 and L8 can reach 36000 yuan.
In addition, NIO's Q4 delivery guidelines are 47000-49000 vehicles, while Xiaopeng's Q4 delivery guidelines are 59500-63500 vehicles. NIO and Xiaopeng have also started various forms of terminal promotions this month to achieve their delivery goals.