Ten billions of financing to save Weilai! JAC OEM's new EC6, will Geely invest US$300 million in shares? Is there still a chance?

On February 25, NIO officially signed a cooperation agreement with the Hefei Municipal Government. NIO's China headquarters will be located in Hefei and the NIO EC6 mass production project will be launched. New cars will continue to be manufactured by JAC. In addition, the Hefei Municipal Government also stated that this cooperation plans to raise more than 10 billion yuan, which may alleviate Weilai's "money crunch" problem.

◆? NIO has always been short of money

Since NIO was founded, there have been controversies over its capital, such as its establishment of the NIO electric formula team, Spending 80 million yuan on new car launches, opening NIO Houses in bustling centers of major cities, etc. These large expenditures are definitely considered extravagant for a brand-new brand that was only established in 2014.

In addition, Weilai is obviously different from many new car-making forces in that the former does not build its own factory, but chooses to use Jianghuai Automobile, which has average strength, as an OEM. This move is inconsistent with its usual practice. The inconsistent behavior of burning large sums of money once made the outside world full of doubts about the strength of its products. On the other hand, there are endless news about new car-making forces "making money". It can be seen that both its own high-profile behavior and external pressure have made NIO extremely controversial.

After successive large-scale spending, NIO’s capital flow began to turn red in 2019. NIO released its 2018 financial report in March last year. The data showed that NIO achieved revenue of 4.951 billion yuan and a net loss of 23.328 billion yuan that year. Therefore, the official also announced in the financial report that it would terminate the plan to build a factory in Shanghai and continue to move forward. OEM route.

It is worth mentioning that NIO’s global headquarters is located in Shanghai. Originally, the Shanghai government intended to support NIO’s development, but later chose to support Tesla. In the end, NIO had to run around looking for financing. Among them, there were also scandals with Beijing and Zhejiang.

In May last year, Weilai signed a framework agreement with Beijing Yizhuang International Investment Development Co., Ltd., claiming that it would receive 10 billion yuan in financing. At the same time, it announced that after entering Beijing, it would implement a "dual headquarters strategy" with the Shanghai company. , but later there was no new progress between the two parties; in October, it was reported online that Weilai was negotiating a financing intention of more than 5 billion yuan with the Wuxing District Government of Huzhou City, Zhejiang Province, but in the end it came to nothing.

With the difficulty of attracting external investment, NIO’s cash flow problems are also reflected in its stock price. In October last year, it hit the lowest price in history since its listing - US$1.19 per share, a decrease of 1.19 US dollars per share in one year. Up to 91%. At the same time, NIO began to cut back on food and clothing, first selling the NIO E-Formula team, then slowing down the expansion plan of NIO House, and instead promoting NIO Space covering an area of ??100 to 200 square meters. This shows that NIO’s self-rescue operation is quite urgent. .

◆? The Hefei Municipal Government has become Weilai’s backer

The essence of frugality is to save money. However, if Weilai wants to survive, it can only continue to raise funds. Not long ago, the official announced the completion of two Qin Lihong, co-president of Weilai, commented on the cumulative US$200 million in convertible bond financing projects, "This US$200 million is just to supplement short-term cash flow and ensure that the company will not die suddenly in the cold winter." Therefore, we are looking for long-term and stable financing projects. Investors have become the focus of Weilai recently.

It was earlier reported that GAC Group would invest US$1 billion in Weilai, but the former quickly clarified that even if it participates, the total investment capital will not exceed US$150 million. Such an amount is inconsistent with the rumors. There is a huge difference between US$1 billion and it can be basically concluded that there will be no follow-up between Weilai and GAC.

It has since been reported that Geely will invest US$300 million in NIO and may integrate the latter's production capacity. However, less than a week after the rumor started, NIO signed a contract with the Hefei Municipal Government, announcing that NIO's China headquarters would be located in Hefei, and NIO's EC6 mass production project was launched. Obviously NIO chose the latter between car companies and government capital. .

On the day of the signing, Hefei local media published two pages of reports on the matter. The first page had a more clear explanation of the cooperation between the two parties, including "NIO expects revenue this year to reach 14.8 billion yuan; It is planned to launch 6 to 8 models in 2024, with revenue reaching 120 billion yuan; plans to land on the Science and Technology Innovation Board before 2025" and other contents, but this version was quickly deleted, and the subsequent second version only briefly mentioned this The project plans to raise more than 10 billion yuan and build a leading enterprise with an output value of 100 billion yuan within 5 years. The statement is quite vague.

According to the first page report, it can be seen that if Weilai wants to continue to obtain the support of Hefei, it also needs to have significant development in revenue. It can be said that there may be a gambling agreement between Weilai and the Hefei government. Regarding the need to blur the content of the first version in the future, the reason is probably that the current NIO and Hefei signed is only a framework agreement, and there are still variables in the specific details, so it is not appropriate to publish specific figures.

However, in the short term, with NIO’s EC6 determined to continue to be manufactured by Jianghuai, the interests of NIO and Hefei will be strongly tied, so NIO’s short-term capital flow will probably not be a problem. In addition, NIO wrote in this press release that the Anhui Provincial Party Committee Secretary and other leaders *** witnessed the launch of the EC6 mass production project. This shows that the specifications of this cooperation are high. This move can also be said to give NIO confidence in its development. endorsement.

◆? Is it possible for Geely to enter the game?

After completing the contract with the Hefei Municipal Government, Weilai began to speak out about Geely's investment. Li Bin still said cryptically, "We never make any comments on rumors, and we still focus on announcements. We often They are all rumored." As for Qin Lihong, he said, "When it reaches the stage of disclosure, we will disclose it through announcements. We cannot and cannot say anything in advance at the moment, and we will not exclude other financings, nor will they be mutually exclusive. ." This statement leaves some room for discussion on Geely's investment.

On the other hand, from Geely’s perspective, it is reported that after the failure of the acquisition of Aston Martin, it needs new projects to improve its strategic layout. Therefore, it is indeed interested in investing in Weilai, but whether it will ultimately succeed remains to be seen. Hard to say. In addition, Geely has not officially expressed its position so far, probably because Hefei’s strong entry into NIO has complicated the whole situation.

The reason why Geely considers investing in Weilai is that it must recognize its value. Although Weilai has a lot of controversies, it has indeed created high-end brand recognition by promoting high-end brands, such as ES6 , ES8 can achieve good sales performance in their respective levels, and capture the recognition of many high-end users. This is probably the envy of many traditional car brands at present.

In addition, from a practical perspective, although Geely has launched a new Geometry brand to enter the pure electric vehicle market, and has launched Geometry A, and a new Geometry C will also be launched, it is not difficult to distinguish from the appearance. Geometry A It is based on the Emgrand GL, while the Geometry C is modified from the Emgrand GSe. Neither of these two products can effectively support the Geometry brand.

As for the PMA pure electric architecture jointly developed with Volvo, referring to the previous application order of the CMA architecture, Lynk & Co and Volvo were the first to be used, and it was Geely’s turn to launch CMA architecture models last. This order The reduction may be due to the PMA structure, which will inevitably drag down the development of the Geometry brand. Therefore, how to quickly fill the vacancies of high-end models of the Geometry brand has become Geely's top priority.

Referring to GAC NIO’s previous practices, GAC rebranded and adjusted the design of its Aion LX pure electric SUV, turning it into GAC NIO HYCAN 007. On the other hand, Geely can introduce NIO ES6/ES8 into the Geometry brand through equity cooperation. In addition to supporting the brand's height, it can also produce and integrate with NIO, thereby helping the latter reduce production costs.

It is worth mentioning that Qin Lihong has said in the past that "the pure electric chassis and platform formed by NIO ES8 can be copied and used by cooperative car companies." It can be seen that NIO has already Plan to share the platform with partners*. Furthermore, Li Bin mentioned in his internal letter at the beginning of this year that the gross profit margin should be increased as soon as possible. Obviously, NIO's cooperation with Geely, which has more negotiation power in the supply chain, or even a shared platform are worthy of consideration.

Looking further, in the first version of the report that has been deleted by Hefei media, the "plan to land on the Science and Technology Innovation Board before 2025" is also full of imagination. Weilai is currently listed in the United States. If it wants to return to the Science and Technology Innovation Board, it will need to complete privatization first. This will inevitably require strong capital to provide support, so the role of external investors is indispensable.

Considering Geely’s ability to make good use of capital over the years, as long as Li Bin is willing to compromise on control, Geely may help NIO complete the privatization and then bring it back to the Science and Technology Innovation Board to achieve higher market capitalization. Of course, these are all things for later. When Li Bin talked about returning to the Science and Technology Innovation Board, he simply responded, "Those are all planning things." How NIO will choose in the future and whether Li Bin can still seize the right to choose, these are still unclear. It depends on whether Weilai can successfully survive by relying on its own "blood production".

This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.