Nezha , can it still "make waves" this time?
1 turmoil continues
Nezha Automobile’s recent troubles are one after another.
First, salary reduction.
Starting from October 15, 2024, many users have posted on social platforms saying that Nezha Automobile did not pay employees’ salaries for September on time.
On October 29, there was another news that Nezha Automobile will start to reduce wages in September. Depending on the annual salary income, the reduction ranges from 5% to 30%. Among them, employees with an annual salary of more than 1 million yuan will have their salaries reduced. up to 30%.
In response to this, Nezha Automobile’s response is: the company has officially launched an equity incentive plan for all employees, and will allocate 5% of the shares (valued at about 2 billion yuan) to all employees as equity incentives. At the same time, it has announced internally the salary and New approach to performance appraisal.
So, this is a wave of salary cuts and another big pie?
The second is layoffs.
The news of salary cuts has not yet dissipated. On November 7, Nezha Automobile was reported to have laid off a large proportion of employees, with the highest proportion possibly reaching 70%.
An insider from Nezha Auto revealed to the media, "It is indeed a large-scale layoff, and the layoff ratio in some departments has indeed reached 70%." "The compensation plan heard so far is n+1, and the compensation will be paid within 60 working days. Implemented within ”
.Regarding this news, Nezha Automobile did not make a formal disclosure, but only gave some vague responses: The company is building a more centralized and efficient organizational structure through measures such as streamlining business, focusing on core, organizational optimization, and salary and performance reform. Departments are integrated according to business requirements and future development needs.
The third is debt.
On November 8, Evert issued an announcement stating that because Hezhong New Energy Yichun Branch (referred to as "Yichun Hezhong") defaulted on contract payments of approximately 48.1954 million yuan, the company had sued Yichun Hezhong in court and requested payment of the arrears. payment and compensation for late payment losses. At the same time, Eft also listed Yichun Hezhong’s parent company Hezhong New Energy (owner of Nezha Automobile) as the second defendant, requiring it to assume supplementary repayment liability for the above-mentioned arrears.
According to the announcement, Evert provided Nezha Automobile with a body shop equipment general contracting project, automated welding line and other project construction projects from 2020 to 2022. All inspections and acceptances were completed as agreed, but Yichun Hezhong has not paid the remaining price of the contract overdue. Payment totaled 48.195 million yuan.
The supplier took Nezha Auto to court due to debt issues, which also shows that there are indeed some problems in Nezha Auto’s capital chain. I just don’t know how many more “Efters” are on the way?
It’s not just suppliers who are worried, but also prospective car owners. In the comment section of Nezha Auto’s official Weibo, people are constantly urging the car to be delivered. Information shows that Nezha l and Nezha s hunting equipment are the "hardest hit areas" for delayed delivery.
It’s understandable that everyone is worried. After all, these days, the biggest fear is running into a “bad car”.
2 The fall of the “dark horse”
How did Nezha Auto get to where it is today?
Before answering this question, let’s take a look at the previous “records” of this car company.
Nezha Automobile’s parent company is called Hezhong New Energy. It was established in October 2014, earlier than Wei Xiaoli, the “new force” in car manufacturing, and can be said to be one of the earliest new energy car companies.
It was also a "dark horse" for a time. Data shows that in 2022, Nezha Automobile delivered a total of 152,100 vehicles, a year-on-year increase of 118%, and has maintained year-on-year growth for 29 consecutive months, ranking first among new car-making forces in terms of delivery volume.
During the same period, the ideal delivery volume was 133,000 vehicles, NIO was 122,000 vehicles, and Nezha is the well-deserved big brother.
But this scenery did not last long.
In 2023, Nezha Automobile delivered a total of 127,500 vehicles, a year-on-year decrease of approximately 16%, and only completed 51% of the annual target of 250,000 vehicles.
This data ranks only sixth among the new car-making forces, and it is also the only leading new energy car company with declining sales.
By 2024, Nezha Automobile has set a sales target of 300,000 vehicles, but the cumulative delivery in the first nine months was only 85,900 vehicles, completing only 28.63% of the full-year target.
This decline continues. The latest retail sales data released by the Passenger Car Association shows that sales of new energy narrow passenger vehicles in October this year were 1.196 million units, a year-on-year increase of 56.7% and a month-on-month increase of 6.4%.
Among the manufacturers whose monthly wholesale sales of new energy vehicles exceeded 10,000 units in October announced by the Passenger Car Association, Nezha Automobile was not seen.
In the eyes of the outside world, this is a sign of another "stall" for Nezha.
It only took Nezha less than 2 years to go from being the champion of new car manufacturers to falling out of the mainstream list.
People are more curious about how much money Nezha has made after building cars for so many years?
3 Cumulative losses of 18.3 billion in three years
Nezha Automobile’s prospectus gives the answer.
In June this year, Hezhong New Energy, the parent company of Nezha Automobile, submitted a listing application to the Hong Kong Stock Exchange. According to the prospectus, Nezha Automobile has completed 10 rounds of financing since 2017, with a total financing amount of 22.844 billion yuan.
I have to say that Nezha Automobile’s financing capabilities are still acceptable. Who is putting money into it?
data shows that its top five shareholders include Yichun entities, Hezhong New Energy Chairman Fang Yunzhou and controlling entities, Nanning Fund, Huading Capital and 360 Security. In addition, Tongxiang, Hefei, Jiaxing and other government funds also appear on the list of shareholders.
Among them, the more well-known is 360 Investment. In May 2021, Nezha received an investment of 2.9 billion yuan from the Internet giant 360 Group, making 360 the second largest shareholder of Nezha Automobile. After that, 360 founder Zhou Hongyi also continued to build a platform for Nezha Auto, which brought a lot of attention.
Investors are very powerful, but Nezha Automobile’s losses are staggering.
The prospectus shows that from 2021 to 2023, Nezha Auto achieved revenue of 5.087 billion yuan, 13.050 billion yuan and 13.555 billion yuan respectively, with net losses of 4.84 billion yuan, 6.666 billion yuan and 6.867 billion yuan respectively:
Cumulative losses in three years 18.373 billion yuan.
Someone calculated that during the same period, the cumulative sales of Nezha cars were less than 400,000 units. Calculated as follows:
On average, if you sell one car, you will lose more than 40,000 yuan.
Investors can’t stand it if they continue to lose money like this. 360’s previously announced financial report data showed that its investment loss in Hezhong Automobile in 2023 reached 687 million yuan. No wonder Zhou Hongyi often criticizes Nezha. The eldest brother’s money is not brought by strong winds.
Moreover, Nezha Automobile has many local government shareholders. Once the losses continue, will it be suspected of the loss of state-owned assets?
What’s more interesting is that after losing so much money, the salary of Nezha Automobile executives is not low. The
prospectus shows that Nezha Auto CEO Zhang Yong’s total salary in 2023 is 30.994 million yuan, and Nezha founder and chairman Fang Yunzhou’s salary is as high as 47.675 million yuan.
I wonder what the investors think?
4End
Nezha Automobile’s situation is also a microcosm of the industry.
Wall Street Journal data shows that in 2018, there were more than 487 electric vehicle manufacturers in China. But by 2023, there will only be more than 40 new energy car companies that can operate normally, and nearly 90% of them have disappeared.
Some netizens created a "life and death book" for new energy vehicles. Data shows that from 2020 to February 2024 alone, 24 automakers went bankrupt or exited, and about 6 million car owners were affected after sales.
Among them, well-known brands include Aiways, Byton, Bojun, Changpu, Hengchi, Red Star, Land Ark, Greenchi, Min'an, Yujie, Singularity, Qiantu, Yangtze ev, Zhengdao, Sai Lin, Shitong Electric, Tianji Auto, Zhidou , Ziyoujia, Weimar, etc. Gaohe, Salon, and Yundu are also not optimistic.
This is not the end yet. According to Musk’s statement to the media, he believes that only the 10 best automobile companies will be able to survive in the fierce competition in the future.
Thinking back to those days, attracted by the surge in policy support and subsidies, the new energy vehicle industry expanded rapidly, and many "new forces" flocked in. Under the craze, chaos also emerged. PPT car building, money-burning wars, strategic disputes...now there is only a piece of chicken feathers left.
Those who can stay on the field are basically "roll kings". Volume prices, volume configurations, volume traffic, volume bosses...you can't imagine it, but you can't get it without them.
The industry reshuffle continues. We will wait and see whether Nezha Auto can turn the tide. Nezha , can it still "make waves" this time? 1 turmoil continues Nezha Automobile’s recent troubles are one after another. First, salary reduction. Starting from October 15, 2024, many users have posted on social platforms saying that Nezha Automobile did not pay employees’ salaries for September on time. On October 29, there was another news that Nezha Automobile will start to reduce wages in September. Depending on the annual salary income, the reduction ranges from 5% to 30%. Among them, employees with an annual salary of more than 1 million yuan will have their salaries reduced. up to 30%. In response to this, Nezha Automobile’s response is: the company has officially launched an equity incentive plan for all employees, and will allocate 5% of the shares (valued at about 2 billion yuan) to all employees as equity incentives. At the same time, it has announced internally the salary and New approach to performance appraisal. So, this is a wave of salary cuts and another big pie? The second is layoffs. The news of salary cuts has not yet dissipated. On November 7, Nezha Automobile was reported to have laid off a large proportion of employees, with the highest proportion possibly reaching 70%. An insider from Nezha Auto revealed to the media, "It is indeed a large-scale layoff, and the layoff ratio in some departments has indeed reached 70%." "The compensation plan heard so far is n+1, and the compensation will be paid within 60 working days. Implemented within ” Regarding this news, Nezha Automobile did not make a formal disclosure, but only gave some vague responses: The company is building a more centralized and efficient organizational structure through measures such as streamlining business, focusing on core, organizational optimization, and salary and performance reform. Departments are integrated according to business requirements and future development needs. The third is debt. On November 8, Evert issued an announcement stating that because Hezhong New Energy Yichun Branch (referred to as "Yichun Hezhong") defaulted on contract payments of approximately 48.1954 million yuan, the company had sued Yichun Hezhong in court and requested payment of the arrears. payment and compensation for late payment losses. At the same time, Eft also listed Yichun Hezhong’s parent company Hezhong New Energy (owner of Nezha Automobile) as the second defendant, requiring it to assume supplementary repayment liability for the above-mentioned arrears. According to the announcement, Evert provided Nezha Automobile with a body shop equipment general contracting project, automated welding line and other project construction projects from 2020 to 2022. All inspections and acceptances were completed as agreed, but Yichun Hezhong has not paid the remaining price of the contract overdue. Payment totaled 48.195 million yuan. The supplier took Nezha Auto to court due to debt issues, which also shows that there are indeed some problems in Nezha Auto’s capital chain. I just don’t know how many more “Efters” are on the way? It’s not just suppliers who are worried, but also prospective car owners. In the comment section of Nezha Auto’s official Weibo, people are constantly urging the car to be delivered. Information shows that Nezha l and Nezha s hunting equipment are the "hardest hit areas" for delayed delivery. It’s understandable that everyone is worried. After all, these days, the biggest fear is running into a “bad car”. 2 The fall of the “dark horse” How did Nezha Auto get to where it is today? Before answering this question, let’s take a look at the previous “records” of this car company. Nezha Automobile’s parent company is called Hezhong New Energy. It was established in October 2014, earlier than Wei Xiaoli, the “new force” in car manufacturing, and can be said to be one of the earliest new energy car companies. It was also a "dark horse" for a time. Data shows that in 2022, Nezha Automobile delivered a total of 152,100 vehicles, a year-on-year increase of 118%, and has maintained year-on-year growth for 29 consecutive months, ranking first among new car-making forces in terms of delivery volume. During the same period, the ideal delivery volume was 133,000 vehicles, NIO was 122,000 vehicles, and Nezha is the well-deserved big brother. But this scenery did not last long. In 2023, Nezha Automobile delivered a total of 127,500 vehicles, a year-on-year decrease of approximately 16%, and only completed 51% of the annual target of 250,000 vehicles. This data ranks only sixth among the new car-making forces, and it is also the only leading new energy car company with declining sales. By 2024, Nezha Automobile has set a sales target of 300,000 vehicles, but the cumulative delivery in the first nine months was only 85,900 vehicles, completing only 28.63% of the full-year target. This decline continues. The latest retail sales data released by the Passenger Car Association shows that sales of new energy narrow passenger vehicles in October this year were 1.196 million units, a year-on-year increase of 56.7% and a month-on-month increase of 6.4%. Among the manufacturers whose monthly wholesale sales of new energy vehicles exceeded 10,000 units in October announced by the Passenger Car Association, Nezha Automobile was not seen. In the eyes of the outside world, this is a sign of another "stall" for Nezha. It only took Nezha less than 2 years to go from being the champion of new car manufacturers to falling out of the mainstream list. People are more curious about how much money Nezha has made after building cars for so many years? 3 Cumulative losses of 18.3 billion in three years Nezha Automobile’s prospectus gives the answer. In June this year, Hezhong New Energy, the parent company of Nezha Automobile, submitted a listing application to the Hong Kong Stock Exchange. According to the prospectus, Nezha Automobile has completed 10 rounds of financing since 2017, with a total financing amount of 22.844 billion yuan. I have to say that Nezha Automobile’s financing capabilities are still acceptable. Who is putting money into it? data shows that its top five shareholders include Yichun entities, Hezhong New Energy Chairman Fang Yunzhou and controlling entities, Nanning Fund, Huading Capital and 360 Security. In addition, Tongxiang, Hefei, Jiaxing and other government funds also appear on the list of shareholders. Among them, the more well-known is 360 Investment. In May 2021, Nezha received an investment of 2.9 billion yuan from the Internet giant 360 Group, making 360 the second largest shareholder of Nezha Automobile. After that, 360 founder Zhou Hongyi also continued to build a platform for Nezha Auto, which brought a lot of attention. Investors are very powerful, but Nezha Automobile’s losses are staggering. The prospectus shows that from 2021 to 2023, Nezha Auto achieved revenue of 5.087 billion yuan, 13.050 billion yuan and 13.555 billion yuan respectively, with net losses of 4.84 billion yuan, 6.666 billion yuan and 6.867 billion yuan respectively: Cumulative losses in three years 18.373 billion yuan. Someone calculated that during the same period, the cumulative sales of Nezha cars were less than 400,000 units. Calculated as follows: On average, if you sell one car, you will lose more than 40,000 yuan. Investors can’t stand it if they continue to lose money like this. 360’s previously announced financial report data showed that its investment loss in Hezhong Automobile in 2023 reached 687 million yuan. No wonder Zhou Hongyi often criticizes Nezha. The eldest brother’s money is not brought by strong winds. Moreover, Nezha Automobile has many local government shareholders. Once the losses continue, will it be suspected of the loss of state-owned assets? What’s more interesting is that after losing so much money, the salary of Nezha Automobile executives is not low. The prospectus shows that Nezha Auto CEO Zhang Yong’s total salary in 2023 is 30.994 million yuan, and Nezha founder and chairman Fang Yunzhou’s salary is as high as 47.675 million yuan. I wonder what the investors think? 4End Nezha Automobile’s situation is also a microcosm of the industry. Wall Street Journal data shows that in 2018, there were more than 487 electric vehicle manufacturers in China. But by 2023, there will only be more than 40 new energy car companies that can operate normally, and nearly 90% of them have disappeared. Some netizens created a "life and death book" for new energy vehicles. Data shows that from 2020 to February 2024 alone, 24 automakers went bankrupt or exited, and about 6 million car owners were affected after sales. Among them, well-known brands include Aiways, Byton, Bojun, Changpu, Hengchi, Red Star, Land Ark, Greenchi, Min'an, Yujie, Singularity, Qiantu, Yangtze ev, Zhengdao, Sai Lin, Shitong Electric, Tianji Auto, Zhidou , Ziyoujia, Weimar, etc. Gaohe, Salon, and Yundu are also not optimistic. This is not the end yet. According to Musk’s statement to the media, he believes that only the 10 best automobile companies will be able to survive in the fierce competition in the future. Thinking back to those days, attracted by the surge in policy support and subsidies, the new energy vehicle industry expanded rapidly, and many "new forces" flocked in. Under the craze, chaos also emerged. PPT car building, money-burning wars, strategic disputes...now there is only a piece of chicken feathers left. Those who can stay on the field are basically "roll kings". Volume prices, volume configurations, volume traffic, volume bosses...you can't imagine it, but you can't get it without them. The industry reshuffle continues. We will wait and see whether Nezha Auto can turn the tide.
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