Forced to “high-end”, Weilai can’t compete with Tesla just because of price reduction?


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Wen / PAN Bowen
Source: alpha workshop Research Institute (ID: alpworks)
Belief, scale and ecology are the trilogy running through the lifeline of new energy vehicle development.
At the “NiO day 2019” held in Shenzhen on December 28, 2019, Weilai car owners used a chorus “self cultivation of electric car owners” to express their incomprehension and helplessness of the people around them after purchasing Weilai. They even sang “Chang’an Street lies in the nest, the stock has fallen to more than one piece, the worst person in 2019 needs to tow an oil car to make up electricity” and other self black songs.
In the eyes of the public at that time, Weilai was already at the end of its tether, and the quality of its products did not matter. Whether there would be the next NiO day was their biggest suspense about Weilai.
In 2020, Weilai experienced a 20 fold increase in its share price, a 9-month year-on-year increase in the number of deliveries, a transition from hell to paradise from being on the verge of bankruptcy to leading a new force in Chinese car manufacturing.
On January 9, 2021, Weilai “NiO day 2020” was held in Chengdu. In addition to the joy of rebirth, this NiO day also carries consumers’ expectations for future products.
On the first trading day after the launch of the new car, Weilai closed up 6.42%, once breaking through the 100 billion mark of market value. Weilai also took over the baton of China’s largest auto market value company from BYD.
Behind the booming scene, there are also hidden corners. After the new energy automobile industry has experienced faith, fanaticism and the market returns to rationality, is the market value of 100 billion yuan “overdeveloped” for Weilai? When new energy enters the bayonet time, what will happen to the industry pattern? What role will Wei Lai play in it?
A hundred flowers bloom
From 0 to 1, whether it’s the speculators who get money through “ppt” or the true believers of musk, they are very interested in Tesla( TSLA.US )Our belief is the first driving force for the development of the company
In the face of this new special species, faith is the best cornerstone of pricing when the business model has not been fully confirmed by the market.
Tesla launched its first shot in the new energy market with a pure electric roadster in 2008, attracting the public’s attention with a unique product. At the same time, musk also successfully built itself into a “clean energy developer + space colonist”.
Under the blessing of multiple auras, musk has gained a large number of loyal believers, including a large number of elites and celebrities. Among the founders of new car building forces, Li Bin, he Xiaopeng and Li Xiang were once loyal fans of Tesla, and musk created his own business empire.
Learning from the experience of idols, Li Bin has opened the way of Weilai. Weilai hopes to create a happy life for users, satisfy customers with a series of services such as changing power stations and NiO house, and open up the new energy market.
As time goes on, in 2020, new energy is recognized and promoted by more and more countries and companies. After the transformation of fuel vehicles into new energy has become the certainty of industry development, new energy has become the most suitable target for capital speculation.
Tesla’s share price also began to rise rapidly in April 2020. In the statistical range of the past year, the rise of Tesla’s share price reached 815.58%.
Under the linkage effect of leading enterprises on the whole new energy sector, although many new energy vehicle enterprises may differ from Tesla in terms of product layout and development strategy, they also enjoy the rapid growth of market value brought by the rise of the sector.
In the statistical range of the past year, the stock price of Weilai is highly consistent with that of Tesla, with a range increase of 1459.70%.
Figure: K-line chart of Tesla’s stock price in 2020
Figure: K-line chart of Weilai’s stock price in 2020
As long as it is related to new energy, all of them lead to the pursuit of capital, which also attracts the continuous influx of capital from inside and outside the industry.
This includes traditional car companies with rich genes, as well as enterprises from all walks of life, such as e-commerce, technology giants, and even real estate developers, running into the market, and the track becomes more and more crowded.
A variety of products, consumers and investors also appeared similar to the “aesthetic fatigue” like emotional cooling, which also announced that the market led by faith is coming to an end.
02 scale pricing, leader is king
In addition to new players, traditional and new energy vehicle companies are also accelerating the layout of new energy products. L4 level mass production vehicles such as Volkswagen, Volvo, ideal, BMW, Mercedes Benz, great wall and GAC are expected to be launched around 2022, officially announcing that the new energy war is about to begin.
The intelligent car contains the dual characteristics of the automobile industry and the Internet industry. The two tracks have one thing in common, that is, “the user is the king”.
No product can meet the needs of all people, but how to make the product to grasp the market of the largest user base is the key to the user as king.
The experience of online car hailing, bike sharing and community group buying has taught us that the core competitiveness lies in the products, but also in the price. After all, for most consumers, low price has a fatal attraction.
Musk is well aware of the operation of Internet thinking. In the new energy vehicle track full of smoke, Tesla smelled the beginning of the war and took the lead in reducing the price. During the new year’s day, the domestic model y was launched and will be sold at a price of 160000 yuan, with a starting price of 339900 yuan.
This is not the first time for Tesla to reduce its price. The driving force behind the continuous price reduction strategy is that Tesla has achieved the ultimate in vehicle cost control. In terms of interior decoration and hardware collocation, “Minimalism” has always been the synonym of Tesla. In the future cost compression, Guosen Securities believes that the price of model y still has 100000 yuan to reduce in the future.

Weilai’s company tone and strategy make Weilai move towards a completely different development path. Weilai’s positioning is the independent high-end brand of China’s new energy, becoming the BBA of new energy, and has been committed to achieving the maximum customer satisfaction with its products and services within the scope of its ability.
As a result, we have witnessed Weilai’s sincerity in every car configuration, which also doomed Weilai to be unable to play the price reduction card. Because the price reduction hurts the old users who sincerely support, and the high marketing and operating costs and high hardware costs, Weilai does not have much room for price reduction.
Weilai launched its new flagship car et 7 on NiO day, starting at 448000 yuan without choosing battery rental. Under the high pricing, it is doomed that Weilai’s products of this generation will not be popular.
Tesla left, Weilai right, price reduction and service to the best of its ability, for the public and for the minority, there is no right or wrong in strategy, but the market will give different valuation multiples to the company based on the company’s nature.
Qiu Guolu of Gaoyi asset believes that “investment would rather count the moon than the stars. There are so many stars you can’t count, but there is only one moon
The so-called “Moon” refers to the enterprises that laugh to the end after fierce market competition and industry reshuffle in the industries with high threshold. That is what we often say as oligarchs. The essence of good investment lies in finding the best companies in the industries with the highest threshold.
As a senior investor, Qiu Guolu’s view represents a major trend in the capital market. Affected by the difficulty of understanding and the cost of research, compared with a large number of mediocre companies, the effect of Qiu Guolu’s research is far less effective than that of looking for certainty premium among top companies.
03 software pricing, ecological era
In the global integration of the industry chain, the gap in hardware is bound to be smaller and smaller, which also makes the software defined car industry has become a consensus.
This confirms Tesla’s price reduction logic: first, let consumers benefit from the hardware, popularize electric vehicles through price reduction, and then form an ecological moat through the self-developed ecological closed loop of software and hardware, which has a strong binding relationship with users, and further derive a continuous stream of new products for commercial realization.
Turning software into the profit center of the future and the “apple” of the auto industry represents the final form of Tesla’s development.
From the perspective of Weilai new products, its intelligent development, et 7 hardware configuration is too prominent, but it is ignored in software. From the actual situation, the combination of luxury stackers does not necessarily mean excellent products.
Just as Android mobile phones have surpassed apple in terms of hardware parameters by means of hardware stacking, they still have no one to beat under Apple’s terrible chip performance and software and hardware adaptation.
Then we observe through the most important automatic driving of intelligent vehicles, and the most important thing is the computing power, algorithm and data. The former relies more on hardware devices, and it is not difficult to achieve a substantial improvement of computing power through the stacking of hardware.
The latter two need technology precipitation and cooperation in technology and practice. From the actual situation, the excellent algorithm can achieve the minimum utilization of computing power in the same scene.
Under the trend that software will become the standard of hard power for automobile enterprises, the technology giants represented by apple and Huawei see the opportunity to control the next operating system, and constantly release the news of overweight in the car building track.
On the one hand, the leading companies have already carried out software related layout, on the other hand, the technology giants have entered the market, which is genetically doomed that they will not lose to Weilai in this respect. Under heavy encirclement and suppression, how will Wei Lai deal with it?
With the rapid development of new energy, we are very pleased to see that China’s automobile industry has the opportunity to stand on the same starting line with multinational automobile giants with a history of more than 100 years. We also see the rise of independent brands in the capital market.
Belief, scale and ecology have become the trilogy running through the lifeline of new energy development.
At the moment when all the good moves are made and the market enthusiasm is high, whether the market value of growing Weilai has been in the state of “overdevelopment” needs Weilai to give an answer, and can only witness the results in the future.
(statement: This article only represents the author’s point of view, not Sina’s position.)