With the release of the third quarter results of this year by NIO, the Q3 financial reports of all three new car making forces, namely NIO, Xiaopeng Motors, and Ideal Motors, have been released.
From the financial report data, there is not much difference in the ranking of "Weixiaoli" in terms of revenue, delivery, and gross profit margin compared to the second quarter. Among them, Ideal Automobile has achieved leadership in multiple important areas that measure the operation of automotive brands.
In addition, there is a significant gap in the market value of the three car companies mentioned above. From the performance of the US stock market, as of the close of December 5th Eastern Time, the market value of Ideal Automobile was $37.814 billion, exceeding the sum of the market values of NIO and Xiaopeng Motors; The latest market value of NIO is 13.215 billion US dollars; The latest market value of Xiaopeng Motors is 14.5 billion US dollars.
Ideal leadership in multiple financial indicators
Specifically, in the third quarter of this year, although "Weixiaoli" achieved year-on-year revenue growth, the gap between the three was not small. Among them, Ideal Automobile's revenue in the third quarter was 34.68 billion yuan, a year-on-year increase of 271.2%; NIO's revenue in the third quarter reached 19.07 billion yuan, a year-on-year increase of 46.6%; Xiaopeng Automobile's revenue was 8.53 billion yuan, a year-on-year increase of 25%.
Tabulation: Reporter Sun Lei
The revenue gap reflects the differentiation of the three companies in terms of delivery volume. Data shows that in the third quarter of this year, Ideal Automobile delivered 105100 new cars, a year-on-year increase of 296.3%; NIO's delivery volume reached 55400 vehicles, a year-on-year increase of 75.4%; Xiaopeng Motors delivered over 40000 new cars, a year-on-year increase of 80.18%.
Tabulation: Reporter Sun Lei
In addition, Ideal Automobile also leads among the three in terms of gross profit margin. In the third quarter of this year, the gross profit margin of Ideal Automobile was 22.0%, compared to 12.7% in the same period last year. Among them, its vehicle gross profit margin was 21.2%, compared to 12.0% in the same period last year. In terms of NIO, its gross profit margin in the third quarter was 8.0%, compared to 13.3% in the same period last year; The gross profit margin of vehicles was 11.0%, compared to 16.4% in the same period last year. Xiaopeng Automobile's gross profit margin in the third quarter was -2.7%, compared to 13.5% in the same period last year; The gross profit margin of vehicles was -6.1%, compared to 11.6% in the same period last year.
Tabulation: Reporter Sun Lei
Regarding the year-on-year decline in gross profit margin, NIO stated that the company's gross profit margin has decreased compared to the third quarter of 2022, mainly due to the decline in automotive gross profit margin. Xiaopeng Motors revealed that the decrease in its gross profit margin was due to inventory impairment related to Xiaopeng G3i, which had a negative impact on the gross profit margin of automobiles in the third quarter by 2.9 percentage points. Meanwhile, the increase in sales promotions and the expiration of subsidies for new energy vehicles have also had an impact on the gross profit margin.
"It is expected that the cost reduction of the supply chain next year will produce significant results, and with the full process cost reduction of design, research and development, and manufacturing, we are confident in accelerating and even surpassing the target of 25% cost reduction by the end of 2024, resulting in a significant increase in gross profit margin next year." said He Xiaopeng, Chairman and CEO of Xiaopeng Motors.
In contrast, Ideal Automobile achieved a year-on-year increase in gross profit margin. "As an intelligent electric vehicle enterprise, we believe that the threshold for a healthy gross profit margin is around 20%." Li Xiang, Chairman and CEO of Ideal Automobile, has repeatedly mentioned that "in the 20% gross profit margin, research and development investment is basically 10%, and sales and management expenses are about 7% to 8%. At the same time, the enterprise also has to bear certain risks and faces capital investment such as investing in factory construction."
It is worth mentioning that there is a positive correlation between gross profit margin and profitability, which is also an important indicator for analyzing a company's profitability. From the data, it can be seen that Ideal Automobile has achieved continuous profitability for the fourth quarter, and the net profit of the first three quarters of this year has filled the accumulated losses of the previous three years, while NIO and Xiaopeng Automobile have still not achieved profitability. Data shows that in the third quarter of this year, the net profit of Ideal Automobile was 2.81 billion yuan; NIO suffered a net loss of 4.557 billion yuan; Xiaopeng Automobile's net loss reached 3.89 billion yuan.
Looking ahead to the fourth quarter, Ideal Automobile expects its delivery volume to reach 125000 to 128000 vehicles; NIO expects its car delivery volume to be between 47000 to 49000 vehicles; The expected delivery volume of Xiaopeng Motors is 59500 to 63500 vehicles.
NIO and Xiaopeng "want to save money" and have an ideal desire to "spend money"
It is worth mentioning that the three companies also have differences in cash reserves. In terms of cash reserves, in the third quarter of this year, Ideal Automobile's free cash flow was 13.22 billion yuan, a month on month increase of 37.5%. As of the end of the third quarter, the cash reserves reached 88.52 billion yuan. In contrast, NIO and Xiaopeng Motors have cash reserves of 45.2 billion yuan and 36.48 billion yuan, respectively. Under different strategic and financial conditions, there are also differences in the current and future work directions of "Weixiaoli".
"We have recently completed a comprehensive plan for the company's two-year operational plan to identify key goals, priorities, and action plans. At the same time, we have identified opportunities for organizational optimization, cost reduction, and efficiency improvement. We will continue to focus on advancing core technologies, developing key products, and enhancing sales and service capabilities," said Li Bin, Chairman of NIO.
On November 3rd, Li Bin released an internal letter stating that in order to achieve resource optimization, NIO plans to reduce approximately 10% of positions, merge departments and positions that have been duplicated, reform inefficient internal workflows and division of labor, cancel inefficient positions, and delay or reduce project investment that cannot improve the company's financial performance within 3 years. This is one of the cost reduction and efficiency improvement measures implemented by NIO in response to the loss situation.
Xiaopeng Motors has chosen to reduce costs and increase efficiency by promoting a series of future oriented cooperation and adjustments, including technological research and development, and changing sales channel networks. He Xiaopeng stated that recently, Xiaopeng Motors has begun to attempt to establish a comprehensive R&D tool system throughout the entire process. "We would rather have higher BOM costs than lower R&D expenses," said He Xiaopeng.
In addition, He Xiaopeng stated that in the past, Xiaopeng Automobile's channels mainly focused on first and second tier cities. However, considering the significant changes in the number and structure of vehicle models in 2025, Xiaopeng Automobile has adjusted its channel layout starting from the third quarter of this year. It is understood that in the first three quarters of this year, Xiaopeng Motors washed out nearly a hundred stores through last place elimination.
"Starting from Q3 this year, Xiaopeng Motors has entered a preliminary positive cycle, but this is only a temporary result of this round of internal transformation. Many changes, including channels, are still deepening, and the overall effect will be further demonstrated next year. It is expected that a real performance explosion will only occur in Q4 next year," said He Xiaopeng during the third quarter financial report conference call
In contrast, the Ideal Car, which holds over 80 billion yuan in cash, is elevating intelligent driving to unprecedented heights. "In the future, we will make leading intelligent driving our core strategic goal. Currently, we have approximately 900 autonomous driving personnel, and the number of intelligent driving research and development personnel will exceed 2000 by next year and 2500 by 2025." Li Xiang said, "In the future, we will increase investment in research and development, including vehicle testing, computing power, and personnel. We have sufficient cash reserves and cash flow to support it."
In addition, Ideal Automobile also plans to launch the official version of AD Max 3.0 software to users by the end of the year, providing full scenario NOA capabilities. At the same time, Ideal Automobile will also launch the official software of AD Pro 3.0 to users in the first half of next year, and some algorithm capabilities of AD Max will be released on AD Pro. "We are confident that we will become the first tier of intelligent driving that has been validated in the market in the first half of next year," Li Xiang said.