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Weilai Automobile’s North American headquarters lays off 141 people, and the domestic “Tesla” road to the sea is blocked?

On December 16, NIO reported that NIO had laid off 141 employees at its North American headquarters. This is NIO’s third layoff in the U.S. this year. In this regard, Wei Lai said that the reason is mainly related to the strategic cooperation reached with Mobileye, an autonomous driving technology company, on November 5, in order to reduce repeated positions and reduce costs.

As the first domestic new energy vehicle company listed in the United States, since its listing on the New York Stock Exchange on September 12, 2018, NIO has expanded globally. At its peak, it had nearly 10,700 employees, and successfully invested in investors. The story of a “Tesla” from the huge market of China is told in front of him. But since then, NIO has been in constant turmoil. Although its revenue in the third quarter was 1.4696 billion yuan, an increase of 3095.3% month-on-month, its net loss in the third quarter reached 2.8104 billion yuan, and the loss amount increased by 56.6% month-on-month. It can be said that, Weilai’s road to the sea has not been smooth, and the road of domestic new energy vehicles to the sea has also become a topic of concern in the industry.

The way for domestic new energy vehicles to go overseas

New energy vehicles have always been a key development area of ​​the country. However, since the subsidy for new energy vehicles declined on June 26 this year, the sales of new energy vehicles have suffered five consecutive declines, ushering in the development bottleneck of new-source vehicles and the cold winter of capital. Therefore, many car companies have also started their journey to the sea, seeking to expand overseas.

Although in the field of traditional fuel vehicles, the technology and workmanship of Chinese car companies still lag behind that of Western car companies. However, my country’s battery development is relatively rapid, and it is already in the first camp in the world. Among the local power battery manufacturers for new energy vehicles, CATL and BYD ranked first and third in terms of total power battery shipments in 2018. Therefore, on new energy vehicles, Chinese car companies have the possibility of overtaking in corners.

Among the many domestic car companies, BYD is the first to successfully go overseas in the United States. As the world’s largest electric vehicle manufacturer, BYD has already entered the US market in 2013, vigorously selling electric buses. It built a factory in Lancaster with a total area of ​​41,000 square meters and an annual production capacity of 1,500 units. It is not only the first Chinese-owned bus factory in the United States, but also the largest pure electric bus factory in the United States. BYD has invested more than 200 million US dollars in the US market, and in 2017, it has occupied more than 80% of the US pure electric bus market.

BYD’s electric buses in North America

However, in the civilian sector, BYD has repeatedly delayed plans to sell electric vehicles in Europe and the United States. At the Pebble Beach Auto Show in August this year, BYD provided a test drive of the Tang EV600D (Tang BEV), and added a static comparison with other models of the same size at the scene to test the water for its launch in the United States. But BYD has no timetable for selling electric civilian vehicles in these U.S. markets. In addition to BYD, many other car companies have also released their own timetables for going overseas. Among them, Weilai, Kaiyun, Lynk & Co, Byton, and Qiantu have all announced that they will enter the US market in the next year. In 2018, Xie Dongying, then CFO of NIO, said that NIO will be sold in the United States in 2020.

Lynk & Co Geely Holding Group is a joint venture between Geely Automobile Group and Volvo Cars. Since its establishment three years ago, it has always been supported by large car companies. Lynk & Co revealed its first pure electric vehicle PMA in April this year. The model has a range of 600km and is planned to be sold in the United States and Europe.

Founded in 2017 and headquartered in Nanjing, Byton is a billion-dollar electric vehicle startup. There are many funders behind it, including Tencent and China FAW Group. Byton already has a pure electric SUV M-Byte, but it has not yet been listed in China.

Qiantu was established in 2015 and is headquartered in Suzhou. In 2018, Qiantu opened its first pure electric vehicle experience store in Sanlitun, Beijing. Qiantu plans to assemble and sell its luxury sedan K50 in the United States next year, although only 59 of the model were sold domestically last year. Although the plans have been announced, it remains to be seen whether many of the above car companies can proceed according to their overseas schedules. Two major challenges, the “dangerous road” is long. From the electric vehicle sales data report in the United States this year to November, we can see that among the top ten car brands, Tesla, Honda, and Chevrolet have performed more prominently. Also as overseas brands, Japanese and German car companies can steadily gain a share of the American market. And there is not a car company from China on the list.

Entering the U.S. market, to gain a foothold in the U.S. market, domestic new energy vehicle companies still have many difficulties to overcome. From government policies to infrastructure, there are two major challenges that need attention to the development of domestic new energy vehicles in the United States:

First, the subsidy rate for new energy vehicles in the United States is declining
Generally speaking, car owners who purchase new energy vehicles in the United States can receive tax credits of up to $7,500 from the federal government. In terms of models, most electric vehicles and hydrogen fuel cell vehicles can get the top-end $7,500, while hybrid models are also around $4,500. But the tax credit of up to $7,500 is limited, and will shrink once automakers reach 200,000 total EV sales. At present, Tesla and GM have reached 200,000 vehicles, and the new reduced subsidies will be gradually implemented. In order to encourage new energy vehicles, the California government has added an additional subsidy of $4,500. However, on the whole, the trend of refunds in the United States is still obvious. Under this trend, the attractiveness of new energy vehicles to the American people will also shrink significantly. Therefore, the recent performance of the new energy vehicle market in the United States is actually very sluggish. In September 2019, U.S. electric vehicle sales were 33,000, down 25% year-on-year, and for the third consecutive month of decline.

Second, the high investment in the charging pile network

The huge electric vehicle market requires a huge network of charging piles for support. In China, the government usually provides funds to improve the level of infrastructure and promote the development of electric vehicle charging networks, and car companies themselves do not need to invest too much in building charging piles.

In the United States, most of the charging networks need to be built by car companies themselves. For example, Tesla has built 12,000 superchargers around the world, covering 99% of the U.S. population, equivalent to one charging station every 241 kilometers. Tesla’s move is a public welfare project and a non-profitable service.

However, Tesla’s charging piles are not compatible with other brands of cars. Therefore, for many car companies, the construction of charging piles requires a lot of cost, which is a key threshold. Since the establishment of charging piles plays a crucial role in increasing the sales of electric vehicles, this is also a difficulty that needs to be overcome for car companies that want to develop in North America.

Distribution map of Tesla charging piles in the United States (picture from google)

Weilai said earlier, “Four years of rapid growth has brought about the globalization of the company’s layout, but the rapid expansion has also brought about problems of unclear division of labor, unclear responsibilities, and inefficient work for some employees. “In this regard, Weilai is also working hard to optimize resources and organizational structures, and carry out internal slimming. In March of this year, Li Bin, the founder of NIO, issued an internal letter, establishing the development goals and key actions for the next three years and proposing to optimize about 3% of the staff, keeping the total number within 9,500. The internal emails revealed in September once again proved that NIO plans to lay off 1,200 employees by the end of September this year. In addition to measures such as the elimination of the last position starting in March, NIO plans to lay off 2,200 employees by the end of September. The number was reduced to 7,500.

In addition to layoffs, the development predicament NIO faces is also a microcosm of how the electric vehicle market should respond against the backdrop of the overall market downturn and the challenges of competition.

Since the subsidy for new energy vehicles declined on June 26, sales of new energy vehicles have dropped for four consecutive years, and the decline has gradually expanded. Li Bin, founder and chairman of Weilai, said that he must see the numbers behind the numbers. Although the sales of pure electric passenger vehicles dropped by 32% in October this year, the decline was mainly due to operating vehicles. From the perspective of private cars, the sales figures are still rising, which shows that after more than ten years of new energy vehicle industry With the development of electric vehicles, more and more personal car purchasers have realized the benefits of electric vehicles, and the market for personal purchases has begun.

Despite the cold winter, various car companies are also looking for new solutions. Volkswagen, Toyota, Hyundai and other multinational car companies are making every effort to launch new energy vehicles. In addition, the official mass production of Tesla’s Shanghai factory may provide solutions for the intelligentization of the new energy vehicle industry, which is expected to drive the upgrading of new energy vehicles and the growth of production and sales in the face of more intense competition.

According to the second quarterly report, NIO’s total revenue was 1.5086 billion yuan, down 7.5% month-on-month; its net loss was 3.2858 billion yuan, up 25.2% month-on-month. The financial report also shows that as of the end of June, Weilai had total assets of about 18.2 billion yuan and total liabilities of 17.75 billion yuan. The latest data shows that NIO’s sales in November fell by 18% year-on-year, a slight increase of 2 from the previous month, and the delivery volume was 2,528. According to statistics, as of the end of November, the cumulative delivery of NIO this year reached 17,395 units. In the face of the current actual situation, NIO started to downsize and lay off staff and improve its operational capabilities from the second half of this year. At the same time, Li Bin, the founder of Weilai Automobile, also frequently spoke out in response to the rumors that caused heated discussions. Although Li Bin is optimistic about the status quo of NIO, the market is not like that. The stock price trend of Weilai Automobile is a proof.

The road to sea has never been smooth. Car companies like Weilai, with deep capital, abundant talents and endorsements by many celebrities, are fashionable and difficult to expand overseas, and other start-up car companies will face numerous challenges. However, going overseas for new energy vehicles is destined to be a road full of thorns and flowers, and Chinese car companies have the potential to achieve low-cost technological reform and research and development of new products, an advantage that many car companies in other countries do not have. Are you optimistic about domestic new energy vehicles going overseas to the United States? What advice do you have for these car companies to gain a foothold in the United States?

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