A brief review of the first quarter financial reports of new energy vehicle companies: The gap is widening, who can safely land in the high-speed reshuffle?

A brief review of the first quarter financial reports of new energy vehicle companies: The gap is widening, who can safely land in the high-speed reshuffle?

Battle reports can be deceiving, but battle lines cannot.

In the first quarter of 2024, the Chinese auto market was in turmoil. Some companies claimed to have made it to the market, some were eliminated, some made a loss but only made a profit, and some deceived themselves with poor sales through marketing. However, no matter how they were embellished, the data in the financial report still showed the truth first.

Let’s first look at the industry leader BYD. Its cumulative sales in the first quarter reached 626,000 vehicles, revenue was 124.944 billion yuan, net profit was 4.569 billion yuan, and gross profit margin was 21.88%, ranking first among new energy vehicle manufacturers.

This is a good report card, but for BYD, it is a mid-term adjustment rhythm. In the first quarter, revenue increased by only 3.97%, net profit increased by 10.52%, and sales increased by 13.44% year-on-year, all of which were at a low growth level. This shows that after dominating the global new energy market for two consecutive years, BYD's growth has begun to slow down, and it should have a higher pursuit of profits in the future.

Unlike BYD, all data of Great Wall Motor in the first quarter showed a rapid growth trend, with revenue of 42.86 billion yuan, a year-on-year increase of 47.6%; sales of 275,000 vehicles, a year-on-year increase of 25.11%; net profit reached 3.228 billion yuan, a year-on-year surge of 1752.55%, and gross profit margin reached 20.04%.

That is to say, Great Wall Motors achieved about 70% of BYD's net profit in the first quarter with revenue equivalent to one-third of BYD's. It has to be said that the Tank and Wei brand are really good cars that can generate profits. However, Great Wall Motors' new energy sales are still not impressive, which is a serious flaw for the future.

Changan Automobile, a traditional large manufacturer, sold 690,000 vehicles in the first quarter, second only to BYD among domestic brands, but its revenue was only 37.023 billion yuan, and its net profit was 1.158 billion yuan, a year-on-year drop of 83.39%.

It is worth mentioning that Changan's sales include joint venture models, and the sales of joint venture models have been falling, and Changan Automobile has been forced to trade price for volume. In addition, Changan's own brand has little to show for its high-end models, and its new energy business has not played a supporting role. It will take some time for the company to transform.

Compared with these traditional big manufacturers, the market is actually more concerned about the performance of new forces. The reason is simple. Changan, Great Wall and other manufacturers are well-established and their performance in one quarter, even if it fluctuates, is not enough to cause serious damage. But new forces are different. If they fail in one quarter, they may really fail.

A typical example is Ideal Auto, which is still making great strides in 2023, but in the first quarter of 2024, due to strong competition from models such as the M7 and M9, Ideal Auto's net profit was only 591 million yuan, a year-on-year drop of 36.7%. As a high-end brand, Ideal's gross profit margin is only 19.3%, which is lower than BYD and Great Wall. This performance is obviously not healthy.

Xpeng Motors' loss in the first quarter reached 1.368 billion yuan, with sales of only 21,000 vehicles, an average of just over 7,000 vehicles per month. It is still struggling in the quagmire and has a downward trend. Leapmotor suffered a loss of 1.015 billion yuan, and its gross profit was even negative 1.4%, which means it is truly losing money on every car sold. New car manufacturers such as NIO have not yet announced their first quarter financial reports, but if nothing unexpected happens, it will be difficult for them to make a profit.

The most eye-catching new force in the first quarter was SERES. Although its quarterly profit was only 220 million yuan, it was the second new car-making force to achieve profitability after Ideal. At the same time, its sales in the first quarter reached 114,000 vehicles, a year-on-year increase of 172.16%.

The profitability of SERES is of great significance. It proves the success of Huawei's smart car selection model, and also provides a positive example for cooperation between Chinese new energy vehicle manufacturers - even without the "soul", cooperation with Huawei is also a good business.

At present, many automobile manufacturers have not yet released their first-quarter financial reports, but the general trend of the entire market can be seen from the data that have been released.

First, manufacturers with core technologies and a certain influence in the high-end market tend to have a strong ability to resist risks. The first quarter is traditionally a low season, but they are able to grow against the trend.

BYD, Great Wall, and SERES all have these two characteristics. BYD has various core technologies and equipment such as blade batteries, super hybrid DM-i, Yunnian intelligent body control system, and Yisifang platform technology, and can also gain a firm foothold in the million-level market; Great Wall Motors has attracted many users with its Hi4 plug-in hybrid system, and the Tank family's series of new energy off-road vehicles are particularly eye-catching.

As for SERES, although it does not have any core technology itself, it has integrated Huawei's "N-piece set" including the ADS2.0 advanced intelligent driving assistance system, Hongmeng 4.0 smart cockpit, Drive ONE power platform, Tuling intelligent chassis, and the Jujing 800V high-voltage fast charging platform, and has still established a firm foothold in the high-end market.

It is foreseeable that the competition in China's automobile market will become more brutal in the future, and automobile manufacturers with weak technology will gradually be eliminated. In the long run, if a brand wants to gain a foothold in the market, core technology and high-end models are indispensable.

In the remaining six months of 2024, the new car-making forces will undergo a second round of reshuffle. It is expected that one or two of the existing five manufacturers, Weilai, Ideal, Xiaopeng, Leapmotor, and Nezha, will be eliminated. At present, except for Ideal and Seres, the other new car-making forces are facing huge losses. Under the current situation, investors will definitely not allow the project to continue to lose money year after year. If they cannot get out of the quagmire of losses as soon as possible, they may still happily release battle reports this month, but face a survival crisis next month.

This is actually a normal phenomenon in the development of China's automobile industry, or in other words, many large-capacity automobile markets have developed in this way. The advent of the new energy era has given some new forces some living space, but now this door is gradually closing, leaving less and less room for new brands to maneuver, because even though China is the world's largest automobile market, it really cannot accommodate so many automobile manufacturers. Now, the market is about to start the dry-shuffle mode. Under high speed, who can get ashore and who will be thrown away in the middle, the answer will be revealed next year at the latest.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.

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