Gaohe Motors is entering a crucial period, from meeting with car owners to contacting Changan Group, it proves that Gaohe is still actively raising funds and is not willing to end it. Ideal released the 2023 financial report, which can be called the perfect financial report, and it makes people look forward to this year’s performance even more. Is Apple’s abandonment of the car project a regret or the right choice? Let’s review this week’s hot topics in the automotive industry together. #Gaohe Motors’ apology from Ding Lei#
On February 22, the founder and CEO of Huaren Yuntong Gaohé Automobile, Ding Lei, held a meeting with some Gaohé employees and car owners. During the meeting, Ding Lei stated that the window for Gaohé’s turnaround is at most three months, and he will actively seek acquisition or investment opportunities. “The next 3 months will be very difficult. I have almost not slept for 24 hours, dealing with all aspects, and everyone is voluntarily protecting the company’s normal interests. I think everyone, like me, is unwilling to end it here.” Ding Lei apologized to the Gaohé car owners at the meeting, admitting that his old business strategy cannot compete with the internet car-making model, and he is very grateful for the owners’ presence.
Once upon a time, Gaohe was the leader in the high-end luxury new energy vehicle market. However, market competition is brutal, and as Ding Lei said, the traditional business strategy is not suitable for the current internet car-making model, which is the reason for the failure. Can Gaohe be saved by strategy or is there another secret? Can the 3-month turnaround time mentioned by Ding Lei still save Gaohe now? These are worth thinking about, because the problems Gaohe is facing now may be the same problems other car companies will face one day. The Chinese new energy vehicle market is full of opportunities and challenges. Upward development is the only way, but the basic market must not be lost. The pricing of Gaohe models has always been in the high-end range, with prices often reaching hundreds of thousands, which has indeed given it the label of high-end luxury, but also destined its market volume to be not very large. In the fiercely competitive 2023, Gaohe’s annual sales are still less than 10,000 units. Gaohe seems to have realized this, as the price of the third model, Hiphi Y, has already dropped to the 300,000 yuan (41690$) price range, but still encountered a sales slump. “People who have achieved great success in the past must completely bid farewell to their past glory and continue to innovate constantly in the most difficult times.” Maintaining a clear understanding is crucial as a leader of a car company. Ding Lei’s past history is successful, and he will definitely not be willing to see Gaohe fall like this. Come on, and I wish Gaohe good luck. #What is the purpose of Chinese car companies building factories overseas#
Some netizens ask why car companies take the risk of building factories overseas. According to the research report from CITIC Securities, one reason is that domestic car manufacturers can achieve higher profits by going abroad. The increase in overseas prices far exceeds the cost increase of exporting a single vehicle, and it can also extend the lifecycle of the vehicle model, allowing for the reuse of initial investment.
Suddenly thought of a song lyric, “the outside world is wonderful”, going out is definitely the necessary path to become bigger and stronger. The reason is simple, for better development, for a broader market, it’s about enhancing the value of the company, and on a larger scale, it’s about the competitiveness of the entire industry. Chinese car companies going global is no longer just a small matter, the rapid development of new energy vehicles has brought opportunities, expanding into the global market, gaining more influence, and exporting technology, the global expansion of Chinese car companies shows us greater hope and a more brilliant future. The Chinese car market is full of major multinational car groups, European, Japanese, and American car companies are flourishing in the Chinese market, and these companies are making a lot of money. On the other hand, Chinese local car companies could only watch others during “difficult times”. However, such embarrassment is gone, and new energy vehicles have given Chinese car companies the opportunity to surpass once again. Fortunately, they did not waste it, but firmly seized the initiative. The mastery of core technology has given Chinese car companies more confidence, and the fact that companies like BYD can compete with luxury brands in Europe is the best proof. Building factories overseas naturally brings many advantages and benefits. Building factories overseas can effectively reduce costs, establish a full industry chain operation, and provide more localized brand exports. It also benefits car companies in deepening cooperation with local governments, quickly building confidence in the brand among local dealers and consumers, and further enhancing the brand’s influence in the global market. Going global certainly has many benefits, but it still requires a certain level of sales support. Although the “temptation” is great, each car company must also measure its own capabilities and proceed cautiously.
Insiders revealed that Apple has canceled its electric car project and redirected the team towards developing generative artificial intelligence. The company is gradually winding down its decade-long exploration of electric cars. Apple disclosed this news internally on Tuesday, surprising nearly 2,000 employees involved in the project. Chief Operating Officer Jeff Williams and Vice President Kevin Lynch made this decision together.
When did Apple join the car-making army? This used to be a hot topic of discussion, but after much speculation, it ended with Apple stopping car production. After ten years of car-making, Apple finally left with regrets. Was it because of insufficient technology? Or is Apple taking a step back to move forward? Reports suggest that many employees of Apple’s car team will be transferred to the AI department. Does this indicate a major breakthrough for Apple AI? This move by the tech giant is truly intriguing. What does it take to make cars? Simply put, it’s about technology and funding. And looking around the world, it’s hard to find a tech company more suitable to enter the car-making field than Apple. There was a time when Apple was considered one of Tesla’s strongest competitors. Not to mention Apple’s huge and strong funding and research and development investment, the future looks bright. In 2014, Apple publicly announced its exploration project for electric cars, named the “Titan Plan.” The goal of the Titan Plan was to develop a fully automatic electric car with luxurious interior and voice navigation features. Over the past decade, Apple has been investing over $1 billion annually in car development, reaching a scale of over $10 billion. However, Apple has shown a lot of uncertainty about car-making since then, and has stated that the launch of the car will be postponed until 2025. Currently, the market for new energy vehicles is accelerating into a period of capacity elimination, with smaller profit margins. On the other hand, after the pandemic, Apple experienced a softening in sales, with revenue declining for four consecutive quarters in the 2023 fiscal year. With the need for huge investment in the project and no guarantee of future profits, Apple was forced to stop the car-making project. Instead, they are focusing on AI projects. It’s no surprise that the future development of both phones and cars will be inseparable from artificial intelligence. Perhaps Apple’s current approach is the most correct one. #IdealCar 2023 Annual Financial Report#
On February 26, 2023, Ideal Car released its financial report for the fourth quarter and full year of 2023, showing: Net profit for the fourth quarter was 57.5 billion yuan, with a gross profit margin of 23.5% and free cash flow of 146.4 billion yuan. The full-year net profit for 2023 was 118.1 billion yuan. Ideal Car achieved a revenue of over 100 billion yuan and a profit of over 10 billion yuan in 8 years, creating a miracle in the growth of Chinese car brands. As of the end of 2023, the company’s cash reserves were 1036.7 billion yuan.
Ideal’s “Ideal Financial Report” for 2023 can be described as perfect. The performance of Ideal in 2023 was outstanding, with record-breaking revenue, profits, and delivery volume. Annual revenue reached 123.85 billion yuan, marking the first full year of profitability and establishing Ideal as the first Chinese new energy vehicle company to break the curse of losses and achieve profitability, while also demonstrating its strong growth momentum and leading position in the industry. In 2023, Ideal delivered a total of 376,030 vehicles, a year-on-year increase of 182.2%, and achieved operating income of 123.85 billion yuan, a year-on-year increase of 173.5%, making it the first new energy vehicle company in China with annual revenue exceeding 100 billion yuan. It also became the third new energy vehicle company in the world to achieve annual profitability, following Tesla and BYD. Another significant figure is Ideal’s free cash flow in 2023, which reached 44.19 billion yuan, a year-on-year increase of 1,861.8%. By the end of 2023, Ideal’s cash reserves amounted to a high of 103.67 billion yuan. “Having money means being willful,” but this willfulness is not in other aspects, but in the continuous increase in R&D investment. R&D expenses in the fourth quarter of 2023 reached 3.49 billion yuan, a year-on-year increase of 68.6%. Total R&D expenses for the year reached 10.59 billion yuan, reaching a historical high and a year-on-year increase of 56.1%. Li Xiang publicly stated, “We are confident that in 2024, we will challenge Mercedes-Benz, BMW, and Audi in terms of sales in China, and strive to become the top luxury brand in terms of sales in the Chinese market in 2024.” 800,000 vehicles is Ideal’s target for 2024. Based on Ideal’s comprehensive performance, it has firmly secured its position as the leader among domestic new energy vehicle companies. We look forward to seeing what more competitive models Ideal will bring to the market in 2024, meeting the needs of consumers for high-quality, pure electric, intelligent vehicles, while maintaining competitiveness and a leading position. #Rumors about Changan Automobile and GAC Group discussing acquisition#
On February 28th, it was reported that Gaohe is in contact with Chang’an Automobile, possibly discussing a acquisition. Regarding the industry rumors today that “Gaohe Automobile founder Ding Lei visited Chang’an Automobile and met with Chairman Zhu Huarong”, an insider at Gaohe Automobile confirmed, “Gaohe’s visit to Chang’an and test drive is true, and the senior executives of both sides also had friendly communication.”
At a previous meeting of Gaohe car owners, Ding Lei pointed out, “The window for Gaohe’s turnaround is at most only three months. He will actively seek acquisition or investment opportunities, and the next three months will be very difficult.” This proves two points: first, Ding Lei will not simply let Gaohe go down and is actively seeking ways to revive it; second, Gaohe car does not have much time left, so finding a strong company to take over and inject funds to save Gaohe is a more effective solution. From the information disclosed by Gaohe car, it is actively seeking external funds for self-rescue. It can also be boldly speculated that, for example, Yueda Group or even local governments, it is obvious that the fundamental problem is all concentrated in the funds. This seems to bring up Gaohe’s pricing strategy again. The prices of the first two models are quite high, and new energy vehicles cannot be profitable without the support of sales volume. Not to mention the smaller market size of high-end models. Even if the price of HiPhiY is in the 300,000 yuan (41690$) range, this sales volume is still a drop in the bucket for supporting Gaohe car. When it cannot be accepted by more consumers, the problem of the fund chain is also understandable. The time left for Gaohe car has entered a race against time, whether Gaohe car can finally turn around, let time give the answer.
Recently, Mercedes-Benz Group officially released its 2023 financial report. The group’s annual revenue was 153.2 billion euros, a 2% increase year-on-year. A total of 2,491,800 cars and trucks were sold, a 1.5% increase year-on-year, with sales of pure electric vehicles reaching 240,700, a 61% increase year-on-year. Mercedes expects revenue to remain flat in 2024 compared to 2023.
Transformation is the core of Mercedes-Benz in 2024. In 2023, Mercedes-Benz faced strong challenges in certain areas, especially with the decline in the sales profit margin of passenger car business and the investment profit margin of travel business, resulting in increased revenue but not increased profitability. However, Mercedes-Benz still remains strong, with 11.3 billion euros of free cash flow providing ample ammunition for the upcoming transformation. Chairman of the Board of Management of Daimler AG, Ola Källenius, commented on the 2023 performance, stating, “In the 2023 fiscal year, Mercedes-Benz continued to advance the corporate transformation, while expanding the scale of electric products and achieving a robust financial performance. The entire team once again overcame numerous challenges, delivered the EQT all-electric light commercial vehicle and the all-new E-Class. At the same time, we have laid the foundation for the next generation of products and platforms, such as the VAN.EA electric light commercial vehicle platform and the MB.OS operating system, to consolidate our leading position in the industry.” However, this is clearly not enough, as the focus will be on continuing to advance the electrification transformation. It is expected that after 2025, new energy vehicles will account for the highest proportion of Mercedes-Benz’s new car sales, reaching 50%. In terms of digitalization, the in-house developed MB.OS operating system is expected to bring even greater breakthroughs. In addition, there will be greater progress in the field of autonomous driving. Mercedes-Benz has already obtained certification for the SAE Level 3 conditional autonomous driving system for use on highways in Nevada and California, and has obtained a conditional autonomous driving highway road test license in Beijing, China. The first batch of supercharging network sites has also been activated in the Chinese, American, and German markets. It seems that in 2024, Mercedes-Benz is still full of confidence.
Volkswagen and Xiaopeng Motors have signed a joint development technology cooperation agreement for platforms and software. The agreement focuses on the joint development of two Volkswagen brand mid-size cars in the early stages of cooperation, with the first product being an SUV. Through this cooperation, the Volkswagen Group continues to strengthen its “in China, for China” development, to more efficiently meet the needs of Chinese customers and explore new market segments.
The cooperation between Volkswagen and Xiaopeng can be seen as a model of cooperation in the field of new energy. Both parties have shown enough sincerity in their cooperation, but consumers are still more eager to see the “love child” of Xiaopeng and Volkswagen as soon as possible. According to reports, the technology cooperation agreement signed this time focuses on the two Volkswagen brand mid-size cars jointly developed in the early stage of cooperation, with the first product being an SUV model. This is the new progress in the cooperation between the two parties after Volkswagen announced its investment in Xiaopeng in July 2023. Xiaopeng Motors Chairman and CEO He Xiaopeng said, “Based on the long-term perspective of strategic cooperation, both parties have devoted their core strengths and resources to strategic cooperation. The synergistic effect of joint procurement has already begun to materialize. I firmly believe that the strategic partnership between Xiaopeng Motors and Volkswagen Group holds broad prospects, and the two parties will further explore together.” Volkswagen Group China Director Bernd Börger said, “Following the announcement of the strategic partnership last year, the rapid signing of this technology cooperation agreement demonstrates the enormous potential of this cooperation. Currently, the two teams are working at full speed towards a common goal, fully leveraging the strengths of both parties to create intelligent automobile products for customers.” Time is of the essence, and this year’s competition will be even more intense and fierce. While a strong alliance is certainly a good thing, consumers are still hoping to see the real vehicles from the cooperation between the two parties as soon as possible. However, to this day, no more relevant product information has been revealed by the two parties. It is currently known that the first model will be launched in 2026. Will this time frame be slightly delayed? Do you also look forward to the debut of the new car as mentioned in the previous cooperation?