Profits are gouged. Fixed Focus One dingjiaoone Original Author: I hope I can help you.
Profits are gouged.
Fixed Focus One dingjiaoone Original
Author: I hope you can help me.
I hope you can help me.
On March 10th, the new car maker Zero Run released its latest quarterly financial report, revealing the answer to the much-anticipated profitability riddle. Zero Run’s annual revenue in 2024 was 32.16 billion yuan, with a net loss of 2.82 billion yuan, 1.4 billion yuan less than that of the previous year, of which the fourth quarter touched the threshold of profitability, realizing a net profit of 80 million yuan.
When a lot of new forces are still making profitability military orders and waiting for financing to renew their lives, no one would have thought that the loss king Zero Run, which plummeted 35 percent on its first day of listing on the Hong Kong stock market in 2022, would have used three years to make a comeback to become the second new force to make a profit, and the progress of the profitability is later than the ideal, and earlier than that of Azure Roc.
In 2022, Zero Run was still Sell a car, lose 46,000 yuan , in 2023, it broke the gross profit margin from 15 4 to a positive number, in 2024, deliveries doubled year-on-year to 290,000 vehicles, gross profit margin pulled up to 8 .
This car company, once labeled as a grassroots, small and transparent company, is profitable, so who’s the lesson? Is its profit earned or saved? FocusOne tries to find the answer by dissecting Zerodan’s financial report. Let’s start with the conclusion
Zero Run’s sales rose to a monthly average of 40,000 units in the fourth quarter, and its gross profit margin rose to 13 3, squeezing out a net profit of 80 million dollars, proving the feasibility of the mass-market strategy of thin profits and high sales.
Zero Run’s full-year loss reduction is the result of a two-pronged approach of revenue growth crushing expense growth and extreme cost-cutting.
Single-car revenue fell from 116.2 million to 109.5 million, and sales growth rate income growth rate Single-car revenue growth rate, indicating that the zero run the existence of price for volume.
Market value predicament As of press time, Zero Run’s stock price was reported at HK$41.5, with a market value of HK$55.5 billion, which was still left behind by Xiaopeng’s HK$169.6 billion and Ulai’s HK$72.4 billion, indicating that the market does not quite buy this story of hard-earned money.
R & D expense ratio long-term control in 7 10, zero run need to smash money as soon as possible to make up for the short board of intelligent driving.
Thin profit margins and high sales. 9,000 per unit.
The lifeblood of the revenue of the new car-making forces also depends on the sale of cars.
Zero Run delivered 293,700 vehicles in 2024, ranking steadily in the top three of the new forces. Doubling sales supported the revenue chassis , Zero Run’s annual revenue of 32.16 billion yuan, compared with 16.75 billion yuan in 2023, an increase of 92.
This revenue volume is equivalent to the level of Xiaopeng in 2023 and Ideal in 2021 and Ulai in 2021, respectively.
By business, for the full year of 2024, Zero Run’s revenue from car sales was 31.63 billion yuan, accounting for 98 3 , and service revenue grew 52 times but the base was still small, at 0.53 billion yuan.
On average, Zero Run’s revenue per car fell to $109.5 million from $116.2 million in 2023. Sales growth rate of 103 8 Revenue growth rate of 92 Single-vehicle revenue growth rate of 5 8, indicating the existence of Zero Run price for volume.
Zero Run did rely on the micro car T03 priced at 59,900,000 to take the volume, sell a loss of 20, but in 2023, T03 pushed to the overseas market, rely on exports to digest the low gross profit models, but also does not affect the domestic brand tone. However, the current export sales accounted for a small percentage, the impact on the average selling price is limited. According to the financial report, T03 and C10 cumulative export 13,700 units.
In 2024, Zero Run’s product structure was adjusted more thoroughly, and the C series, which mainly pushes the 10 200,000 range in China, was affected by the price war and had to reduce the price. For example, the terminal transaction price of the Zero Run C10 C11 fell by more than 12 year-on-year.
In the year 2024 of the crazy involution, terminal concessions to protect sales is a routine operation, but focus on the new energy automobile market investors Li Shu said, zero run models continue to reduce prices space is not big, the future challenge is to maintain growth while improving gross profit margins, to avoid falling into the price war quagmire.
Compared to the head of the new forces, Zero Run’s gross profit margin is still a gap. Ideal Xiaopeng Ulai 2024 third quarter gross profit rate were 20 9 15 3 10 7 2024 financial reports have not yet been published , Zero Run gross profit rate for the same period is 8 1 .
In the fourth quarter of 2024, due to the optimization of the product structure, an increase in the proportion of the C series and sales growth, such as the C10 selling nearly 10,000 units per month in the fourth quarter, the gross profit margin of Zeropeng rose to 13 3, driving the annual gross profit margin from 0 5 in 2023 to 84. For the whole year of 2024, the C series of Zeropeng accounted for more than 77% of the total number of units sold.
Zheng Qi, a new energy vehicle practitioner, told FocusOne that Zeroplan’s gross margin performance, while still a losing proposition in front of BYD Tesla, demonstrates the feasibility of the mass-market strategy of thin profit margins and high sales.
Zero Run’s gross profit per vehicle increased from about $555 in 2023 to $9,163, a 16-fold increase. Together with the gross profit of $2.61 billion from doubled sales, Zero Run turned a positive net profit of 80 million yuan in the fourth quarter, although it still had a net loss of $2.82 billion for the full year of 2024.
Excluding share-based payments, Zero Run’s adjusted net loss for 2024 was $2.35 billion, narrowing from $3.52 billion in 2023 by $1.17 billion.
This shows that Zero Run’s losses are decreasing, especially in the fourth quarter when it started to make a profit , becoming the second of the new forces to make a profit in a single quarter.
Overall, the core logic of Zero Run is to exchange volume for profit through cost-effective models, such as the C series, to quickly capture the market, and use the scale effect to amortize the cost of 2024 sales growth of 103 8, ranking in the top three of the new forces, with a growth rate far exceeding that of Azera 39 Xiaopeng 34 Ideal 33.
2025 is the real life and death game. Li Shu said that the gross margin of Zero Run’s room for improvement lies in raising the premium through the high-end model B series and globalization of the European market. If the B series for the mainstream market and the globalization channel 550 outlets in 2025 are successfully promoted, the annual profit can be expected.
Zheng Qi added that Zero Run has once again verified that the survival threshold of new energy vehicle enterprises is the annual sales of 300,000 units, more than this volume in order to cover the research and development, factory depreciation and other fixed costs, to achieve break-even. Referring to the ideal 2023 with 376,000 units across the threshold after profit normalization, Zeropeng 2024 sales close to the threshold. And Azure 222,000 units Xiaopeng 19,010,000 units failed to meet the target and still lost money.
Desperately trying to save money
Technology to cut costs scale amortization costs
Zero Run’s profitability is a full-year loss reduction, with a net income of 80 million in the fourth quarter, is the bottom of the profitability earned or saved?
The key to narrowing the annual loss of zero run is the gross profit growth rate crushed the increase in expenses, gross profit from 80 million to 2.69 billion, hard to compress the operating loss from 4.38 billion in 2023 to 3.17 billion.
Of course, behind such a large gross profit margin improvement, neither the product suddenly price increases, nor the brand suddenly high-end, but a whole set of cost reduction means.
Let’s start with the most hardcore province annual cost of goods sold 29.47 billion, up 76 8 compared to 2023, lower than the revenue growth rate of 92, that is, every extra dollar invested in the cost of income increased by 1 2 yuan.
The reduction in inventory impairment provisions further lowered costs. in 2024, Zero Run’s inventory impairment provisions were cut directly 77 . Inventory consists of cars and parts that are for sale, and if the cars don’t sell or the price goes down, the company needs to estimate the potential loss of this inventory in advance and set aside funds. That is to say, Zero Run used to set aside 150 million to deal with the risk of depreciation of the inventory of cars, but now feel that the car is better to sell, directly put the money back into the pocket This alone is an additional 120 million profit, more than the net profit in the fourth quarter.
Source Zero Run Auto official microblogging
Zeropeng’s tighter control of daily operating expenses has also laid the groundwork for a turnaround. in 2023, its operating expense ratio stood at 27 3 , far lower than Xiaopeng’s 38 58 and Ulai’s 47 35 , and higher than Ideal’s 16 35. in 2024, it will continue to control sales and marketing expenses by controlling its sales and marketing activities. In 2024, it will continue to control sales expenses and management expenses to reduce its operating expense ratio to 19 22, which is on the low side of the industry.
Chen Yuan, an automotive supply chain source, said that Zero Run adheres to a low expense ratio in all three segments of the R&D, production and supply chain. For example, when friends in the pile of material race in the inner volume, zero run core three electric battery pack electric drive electronic control are self-research, according to the late LatePost reports, the total investment of about 3.6 billion yuan, far lower than other new forces.
Relying on money saving can not save the second profitable new car-making forces, zero run to reverse the loss is the income growth rate crushing expense growth rate extreme key cost double-pronged results. But to sit on the second chair of the new forces, Zero Run has to accelerate in the technology track to overtake the car.
It is important to note that Zero Run’s 2024 R&D investment has increased by 51 percent, but at 2.9 billion dollars, it is still lower than that of the top players. Ideal Ulai Xiaopeng 2023 R & D expenses are 10.6 billion 13.4 billion 5.3 billion respectively.
Control of R & D expenses can accelerate the reversal of losses, but the price is that Zero Run’s Smart Driving function lags behind the head players Huawei Xiaopeng and so on 18 months, the city NOA has not yet landed, and the pressure of future technological competition is great.
After the loss situation has improved, Zero Run’s cash flow situation has improved significantly and is sufficient to support subsequent R&D. By the end of 2024, Zero Run had $6.378 billion in cash reserves on its books, down from $11.731 billion in the same period a year earlier, but with increased earning power, $8.47 billion in operating cash flow, and free cash flow that turned from negative to $6.32 billion for the first time, indicating that the company is no longer burning through money and is starting to make real money from selling cars and value-added services.
A lesson for whom?
Zero run profit, for those who are still burning money to build a car players to provide some ideas to solve the problem, but also stepped on the pain points of many car companies.
First, the scale effect is not burned out, you can borrow arrows from a straw boat.
When friends for the sales of crazy money to burn advertising, zero run rely on two strokes, with a lower rate of sales expenses from 10 8 down to 6 7 in exchange for a doubling of sales!
In the sinking market, the rapid expansion of the dealer model, as of the end of 2024, the sales of 695 stores target 800, the coverage capacity is far more than the direct mode of car companies, the investment is far lower than peers In the overseas market, a joint venture with Stellantis to build channels, using each other ready-made network to save the cost of overseas pioneering.
Secondly, we will never outsource if we can build it by ourselves, and we will not seek the latest chips but the highest reusability in self-research technology.
Zero Run has always claimed that the entire field of self-research, but the R & D expenditure rate has long been controlled at 7 10, much lower than the azure small reason generally more than 15, but the proportion of self-research is as high as 60 electric drive battery EE architecture.
For example, the battery module only purchases the electric core, eliminating the cost of traditional battery pack structure parts, reducing the weight by 20 kilograms, and saving nearly one thousand dollars per vehicle.
When friends in the laser radar supercomputing chip on the crazy pile of material, it used Lego-style car building to prove that the core weapon is technology reuse.
For example, a set of architecture, a fish eat more than one C series models 80 parts generalization rate, means that the C10 and C16 can share the chassis, lights, seats and other core components, the development of the second car only need to add 20 30 costs.
Third, there are low-cost shortcuts to the electrification transition of traditional automakers.
Zero Run’s self-developed four-leaf clover architecture, the core of which is to use IT thinking to transform the car Through the minimalist design of one SOC and one MCU, the BOM cost is reduced by nearly 1,000 yuan, and the reuse rate of the chip is increased by 30%.
In layman’s terms, with a brain and a deputy, to achieve centralized control of the entire car’s intelligent system, the original dispersed hardware and functions packaged into a standardized module, which can not only reduce the cost of a single car, but also quickly adapt to the needs of different models, and with the expansion of the scale, the marginal cost is further diluted.
Fourth, the ultimate supply chain management is not to tie up the leader and not to raise heavy assets.
Zero Run’s supply chain management is very rational, the most typical manifestation is the decentralization of battery suppliers and suppliers of joint ventures to build factories.
At the battery segment, which is a gold-digging beast, its strategy is to de-Ningdezhenize the second-tier vendors to compete for bids. As the head supplier, Ningde Times’ pricing has a direct impact on the profits of automakers. However, Zero Run almost did not buy the battery of Ningde Times, the procurement ratio is only 0.1, and turn to introduce AVIC lithium cell energy and other second-tier manufacturers, creating price competition, hard to press the cost of the battery pack to 65 cents Wh, cheaper than the industry average price of 75 cents by a large margin.
Zero Run has adopted the asset-light model of leasing joint ventures in its plant and parts supply chain to reduce fixed costs. The production base of the car, such as the Jinhua Qiantang factory, the arithmetic resources required for intelligent driving training, are mainly used in the leasing mode, and the parts, such as door panels and seats, are also built in joint ventures with suppliers, so that they can be operated as light assets as possible.
To sum up, when other new forces are still in the high-end labeling internal consumption, zero run with the reversal of losses to prove that the key to survive, is not chasing the wind mouth do not engage in gimmicks, the money spent on the knife edge. After all, in the new energy elimination race, the one who can walk to the finish line with a smile on his face is always the one who knows how to save bullets the most.
But when the new energy vehicle industry entered the second half of the intelligent, zero run if not as soon as possible to make up for the short board of intelligent driving, may not be able to carry BYD Huawei and other head players of the scale of the scale of the double blow of technology downgrade. Zero run current market value of 55.5 billion Hong Kong dollars, less than Peng 169.6 billion Hong Kong dollars 1 3, by the Azure 72.4 billion Hong Kong dollars left behind, also shows that investors are not too buy this mode of making hard money by saving costs.
What Zero Run wants to do now is not to celebrate the profitability of a single quarter, but to prove that in addition to saving money, it can also arm wrestle with the head players in the Smart Driving Supercharging Network.
The title image comes from the official microblog of Zero Run Auto . At the request of the interviewee, Li Shu Zheng Qi Chen Yuan is a pseudonym in the text.
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