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Just a few days ago, before the U.S. stock market closed, Azalea announced its Q2 2020 results, with gross margins turning positive for the first time! The six-year-old Azalea will finally walk on its own, and its elderly father Li Bin is finally waiting.
This can be those who have been singing the downside of the Azalea people see is a stunned, after all, Azalea is the most criticized is that it can not stop losses, gross profit margins turn positive although it does not mean that stop losses, but at least let us see the Azalea from the ability to make blood, the virtuous cycle effect has been initially apparent.
We lost tens of billions of dollars last year, and a quick search on the Internet reveals pessimistic headlines such as "No future for Azure" and "Azure can survive for a few more months". But in 2020, even if the world is full of malice, it will not be easy for both Azalea and Li Bin.
Just looking at sales performance in the first half of the year, Azalea became the only company to go head-to-head with Tesla in the premium pure electric model segment in the first half of the year. Tesla's sales in the first half of the year crushed almost all new energy vehicles, releasing demand for 46,000 domestic Model 3s in one fell swoop.
As a latecomer, Azera also delivered 12,000 ES6s and more than 2,000 ES8s during the same period, which, despite the gap, is the best result among Chinese automakers in the new-energy vehicle market at a price point of more than 300,000 yuan.
However, this is a year when the clock is ticking for Azera. Azera raised a cumulative $435 million in February and March, and in an agreement with Hefei in April, strategic investors will invest 7 billion yuan in Azera China, and Azera will invest 4.26 billion yuan in Azera China (4.8 billion yuan injected by the strategic investors, and 2.556 billion yuan injected by Azera ?), for a combined total of 7.356 billion yuan. , a total capital injection of 7.356 billion yuan), and in June issued about $500 million more.
Last month, Azalea held a signing ceremony for the Azalea China Bank-Enterprise Strategic Cooperation with six banks, including the Anhui branch of China Construction Bank. They will provide up to 10.4 billion yuan in consolidated credit to support the operation and development of Azera China's business. The agreement also includes cooperation between Azera China and the banks in the areas of corporate account system construction, supply chain finance, auto finance and other business areas.
So far, Azalea has completed nearly $935 million (about 6.5 billion yuan) in financing this year, and according to the 4.8 billion yuan planned for June 29 from strategic investors, Azalea has accumulated tens of billions of dollars of financial support in more than half a year.
It's this kind of continuous good news that keeps stimulating the stock price while also pulling Azalea back from the ghost gate.
From "PPT" to real products, and then to the complete company system, product and service system, after rounds of doubt, bumps in the road, this to be the "user satisfaction" of the highest of the new car company has been slowly out of the "intensive care unit".
And this is known as the most miserable person in 2019, but now has become the most "floating" person in 2020. The smile on Libin's face is gradually coming back.
The good Li Bin
As a second-rate media person who has always been on the fringe of the automobile circle, my articles seldom analyze the products and technologies, and it is not difficult to find out that I have recently become obsessed with writing about the startup stories of the automobile circle's bigwigs. (unprofessionally) evaluate them and their products. For example, Li Mingshan of Lifan, Li Xiang of Ideal, Wei Jianjun of Great Wall, and so on.
Maybe I've always felt that it's more important to focus on the people themselves than the products, especially those car companies that are y marked by their founders. Sometimes, from them, we can get a glimpse of a company's trajectory and direction.
So let's talk about Li Bin for a moment, and maybe after you get to know him, you'll be able to understand his company better. Below, I'll briefly summarize in a few words.
As the central figure of Azalea,? Li Bin, the first impression is a word "handsome" ah, of course, with the market now there is no way to compare with the fresh meat, but take a look at his youthful photos, you will certainly understand why he is so good with the opposite sex, but ultimately he married the former CCTV anchor Wang Yi Zhi.
The second keyword is "good," and good people are good and have a good reputation. Li Bin provides the best place for Azera users to experience the car and the most impeccable service. He also likes to fly to different places to drink tea and chat with users, and users' questions about the product can also get his timely feedback.
I once read a random interview with an Azera owner, who used positive words like easy-going, sincere, trustworthy and self-disciplined to describe the tireless "Bin".
If you're one of his employees, you're in for a treat (if you've been laid off, forget it). I heard that the space and treatment he gives his employees is a notch higher than many traditional OEMs, and each employee has a travel fund of three to four thousand dollars per year, earmarked for the purpose, and interns get 300 bucks per day. (Late I heard a slight reduction, but I think the boss has this heart is very touching).
From eCar to eXin, ? From Mobay to Azure,? Li Bin has switched freely between the roles of founder and steering wheel. As a neighbor's "other people's children", friends of the mouth of Mr. good, to now become a reliable youth in the hearts of some investors. I think there is not enough trust, there will not be so many investors to come forward.
The third keyword is "inspirational", this is a cattle herder child on the Peking University to change the fate of the story, indeed inspiring, but think about it, that generation of "creators", who do not have so a story or two to cry about it. Now worth 90 billion yuan of car maniac Li Shufu was also a cattle herder it, they seized the era, with hard work and luck to the spotlight.
When faced with a major choice in life, he gave up the so-called clear path pointed out by his parents - secondary school, but chose an uncertain path - high school, according to my later understanding of the discovery that, in those days, reading a secondary school means that the probability of graduating from school assigned a job; and secondly, ? rural hukou would also be transferred to urban hukou,? short time,? quick results.
If we follow this path, Li Bin might have become a member of some grain station, and he wouldn't have been able to go to Peking University and become one of Robin Li,? Li Guoqing's brother, "travel godfather" story will be rewritten, but I believe that even if it is not Li Bin, there must be Wang Bin, Liu Bin out to write the story of travel.
But in terms of character, Li Bin should be the only one, twenty years ago, Li Bin founded e-car network. Shortly after that due to the ripple effect of the bursting of the Internet bubble in Silicon Valley, investors decided to divest from eCar,? All of a sudden the company's funding gap is as high as ?400? more than a million dollars, ? The company was on the verge of bankruptcy. Li Bin, however, decided to raise his own debt to acquire the investor's shares,? Transfer the debt of eCar to himself,? let investors exit peacefully.
Perhaps it is such fearlessness coupled with rationality and down-to-earth, so on the road of entrepreneurship, can in time to turn danger into safety, as we later learned, easy car in ?2010? year to get a fairy tale ending, ? Easy car in the United States NASDAQ listing,? It became the first automobile Internet company listed overseas,? market capitalization of more than ?1?billion dollars.
This luck continued until the founding of Azera in 2014? Li Bin had the idea,? want to enter the Internet car-making field,? led the creation of Azalea,? he staked his entrepreneurial credit endorsement.
The most admirable point is that Li Bin, as a successful serial entrepreneur, the angel round is his own real money to pay money to subscribe to the shares, that like the other founders are in the capacity of the founder of the direct holdings of dry shares, this point on the other VCs have a lot of lethal force. On the basis of this 150 million, you can hardly say that people are big fools, right, after all, in this business, there are people with PPT to build a car.
From the process of financing Azalea can be seen, he is the new car-making forces in the most attractive entrepreneurs to investors, there is no one. If Li wants to be lucky to meet the nobleman Wang Xing, then you look at the back of Li Bin, whether it is Liu Qiangdong, or not optimistic about the car industry Lei Jun, or Ma Huateng, Yu Minhong, have invested in large sums of money.
Boots on the ground, finally in the ?2018? year ?9? month ?12? day, ? Azure went to the U.S. to ring the bell, becoming the second pure electric car company listed in the U.S. after Tesla. Since then, Li Bin has devoted most of his time and energy to it alone.
So. How is Azera, so beloved by Li Bin, really doing?
Why people don't look favorably on Azalea
First of all, from the market to analyze, Azalea car walks a dangerous road.
If you ask yourself if you are willing to spend 400,000 to 500,000 dollars on a domestic tram, you are not being too "pioneering".
It is well known that the brand high-end? has been the growth of Chinese automobile enterprises facing the ceiling, and Azalea is in the adolescence, although in the intelligent pure electric car track, Azalea in capital, technology and thinking have certain advantages. technology and thinking have certain advantages, but the idea of breaking the monopoly of western car brands on the high-end market is still too naive.
The 350,000 car is a hurdle in the heart of the domestic independent brand, a heart disease. And 500,000 cars, in fact, has been the general independent brand dare not touch the forbidden area (except Red Flag, he is not general).
Because 35 to 500,000 cars, is in and BBA to grab business, ordinary independent brands, see the BBA, like the CBA meets the NBA, the ball has not played, they have been scared of the soft half. Think about it is difficult ah, this level of car, you spell brand completely lose, pile of equipment no one recognized, spell technology no technology, spell design soil fat round.
Alas, in short, this market has almost become a self-contained no-go area, all those who think they have common sense, industry experience of the big executives have come to a seemingly very correct conclusion, our own brand or first efforts to toss the 200,000 range of the market, go to the 500,000 place is equal to suicide.
Bias Li Bin does not believe in this evil, you say he is ignorant and fearless, the sword to go off the beaten track, with a group of seemingly quite do not understand the car capital (pre-investment in Azalea are basically the head of the TMT class in these years, VC) with 30 billion so rushed in.
The way of playing is strange and straight to the 500,000 theme. I can be sure of one thing, on the day when Azalea first started to run wild, none of the traditional OEMs should have been optimistic about Azalea.
And this lack of optimism and contempt culminated in 2019 when Azalea began to spontaneously combust. You say it's okay for rich people to play a little excitement to impact the high-end market, but if the quality of the product is still not good, then it's not reasonable.
Last year, the Azera ES8 suffered three spontaneous combustion incidents within two months. In those dark days, the car was really on fire, at least in the spontaneous combustion world. Then Azera launched a massive recall, the first of its kind by a new domestic carmaker.
The massive recall of problematic vehicles not only resulted in huge wasted costs, but also dealt a considerable blow to Azera's reputation, and many consumers were deterred.
And then secondly, it's the financial data that investors are most concerned about, and naturally the books keep losing money, and in 2019, Azure Auto had a net loss of 11.296 billion yuan for the year. Because of the previous gross margin has been negative, Azalea has always been stuck in is to sell a car loss a car in the circle.
Of course, people who understand the new energy car-making will not think that the loss is a big thing, this is the electric car dominant Tesla has also gone through the old road, but consumers will not think so, they think is Azalea these years, the financial situation is so bad, so loss, in case of closure of the after-sales service to look for who?
And the other thing that's unsettling is that Azalea is kind of mired in negative news about layoffs and a serious brain drain. Indeed, for most companies, big layoffs often look like a sign of financial crisis.
Of course, the last one is, and Azera owners are the most vocal about this, is that it's burning too much money. High manufacturing costs, high service costs, high marketing costs. So the owners who have been touting Azalea are themselves afraid to buy Azalea stock, and that's the bloody reality.
What's more, anyone who's driven an Azera car won't be too picky about the product itself - the design, workmanship and quality of Azera's cars are all worthy of their price.
"Brembo's brake calipers, ThyssenKrupp's steering, Bosch's four-wheel-drive system, Novelis' aluminum body materials, Mobileye's vision chips, KDDI's voice interactions, Fuyao's double-layered laminated glass, and so on". I won't talk about any more hardcore technology, I don't understand it.
The cost of service and marketing is obvious to everyone now.
Li Bin once said, "Some self media reviews of Azera claptrap, but users who have bought Azera cars have very high ratings. Of course. We don't usually have negative things to say about the people who give us candy, do we?
It is understood that every Azera owner has an exclusive WeChat group, 24-hour personal service, problems on the road, the Azera team rushed to the first time, not to mention those thousands of miles to send electricity "nanny car", as if five-star hotel butler service.
More than that, a three to five hundred thousand dollar electric car is the equivalent of a ticket to a high-end club, joining a circle of elegant lifestyle services such as golf, rock climbing and mountaineering. All year round, all kinds of activities, ball games and parties.
I don't object to Azera going for an emotional experience, trading service for brand reputation, which is naturally joyful for owners. However, what is the cost?
And, although Li Bin is a relatively low-key person, Azalea's marketing is unusually high-profile. On the day of the official launch of the Azalea ES8, it chartered the entire Wukesong venue and some of the surrounding venues, eight airplanes, 60 high-speed rail cars and 160 buses. In addition, Azalea also invited the Grammy-winning rock band Imagine?Dragons to sit in on the event, which alone cost nearly 10 million RMB.
Another money-spinner is the construction of NIO?Houses, which are located in some of the city's busiest commercial centers. Beijing's Azera Center in Wangfujing Oriental Plaza, with a reported annual rent of 80 million yuan, and Hangzhou's Azera Center, next to the east shore of West Lake, are the only NIO?Houses located in world-class scenic spots.
Even if Azera's shareholders are big players, such as Tencent, Baidu, Lenovo, Xiaomi and other tech giants, the company won't be able to withstand this kind of consumption.
I can understand how Azera, as a startup, would want to quickly drive a high-end electric car brand into the mind of its customers, trading money for time and making money at a loss. Although this approach has gained a number of loyal fans, the speed at which it has been spent has also eroded the confidence of a number of investors.
Fortunately, Azera has been thinking about these issues lately. For Azalea to afford as much applause in the spotlight, it needs to pay the price of equal growth.
Today's Azera seems to be on the verge of a springtime, and there's a lot less buzz in the marketplace, but that doesn't mean there's a bright future for the company.
The big jump in Azera's stock price doesn't have much to do with whether it's going to work or not. At best, it proves that Azalea has money again, and that it has the backing of its owners to stay at the "poker table.
This time, the gross margin has turned positive, crossing the line of life and death, but Li Bin still can not and dare not take it lightly, the challenge will only get bigger and bigger in the future, and Azure will need to be more cautious in every step.
Car Talk's observation
I have always felt that capital has eyes, and it can make rational choices. Despite the fact that there are a lot of people who don't look favorably on Azalea, the capital still favors it. As a person who is not black and not pink, there are a few two facts and some points of view about Azalea that I can share.
One of them is that power exchange has always been a trump card for Azera to differentiate itself from other new energy vehicle manufacturers. It's like Ideal has a hybrid technology with an add-on program.
Before Azalea, BAIC had been promoting power switching, but mostly in the public sector, such as cabs, buses, etc., and Azalea, which focuses on power switching for private cars, is still the only one.
The technology, in short, means that the battery will be replaced by a fully charged battery of the same standard at the power station. The whole process takes almost three minutes, and the replenishment time is closest to refueling a fuel car.
In such a fast-paced era, it's already hard to imagine still needing to spend half an hour charging, and apartments with charging piles have not been popularized. Combined with the current development of China's electric vehicles, a quick battery change has become a rigid demand.
However, the biggest strategic significance of the battery exchange for Azera never lies in the replenishment of energy, but rather in implementing the concept of separation of vehicle and electricity, separating the value of the vehicle frame from the value of the battery, and implementing Baas (Battery?as?a?service) to make a standard for this aspect of the business of battery management.
The most direct advantage of separating the car from the battery is that it dramatically reduces the amount of money that the buyer has to pay for the battery. If consumers choose to lease a car from Azure Electric, they can save 100,000 yuan on the purchase price, and the battery can be used to make monthly payments with no interest.
Another important reason why new energy vehicles can't compete with fuel vehicles is that they have a low value retention rate, and the relative and absolute depreciation of batteries leads to the depreciation of the entire vehicle, which is a difficult problem that all potential buyers can't overcome. Power switching, on the other hand, solves the problem of battery degradation at its root.
If the battery fades, the owner can always go to a replacement station and get a replacement battery that meets the standards, with maintenance, depreciation, and updates covered by Azera. And when a longer range battery is released, the owner can update their pack as well. So I think in a way the swap provides an ongoing hardware upgrade.
It's been said that third-rate companies make products, second-rate companies make brands, and first-rate companies make standards, and Baas is Li Bin's move to lay out an industry standard. The framework of the story is very moving, but to tell the story well there are several issues that need to be resolved.
One is that standards cannot be unified at this stage. Battery standards are not the same across car companies, with a wide range of battery models, and different battery specifications and sizes. Battery technology is still exploring and developing, and there will not be an absolute leader in a short time, let alone a unified standard.
Secondly, the demand scenario for private car power exchange is too small to support the network effect. The investment in the power exchange station is large, and if there is no high-frequency scenario, it is impossible to calculate the account. BAIC has been promoting the public power exchange station is not unreasonable.
The daily driving distance of cab drivers may be close to the mileage limit of the battery, and power exchange will be the preferred and fastest way to replenish the energy of the masters.
Private car drivers, on the other hand, travel more commuting distance every day, and don't have the need for a power swap. And with Azera's small market share in the overall new energy vehicle market and the dispersal of car owners by region, it's even harder to achieve scale and set standards.
One of the most difficult things to solve is the cost issue. You know, the construction cost of a power station is up to millions of dollars, and Azalea has invested more than 500 million yuan in power stations, and so far only 139 power stations have been built.
The most realistic is the construction capital problem. In addition to the large initial investment, the power exchange mode of the payback cycle is also a real problem for Azalea, Azalea's power exchange station is only for Azalea's own models, and Azalea's user base is only about 50,000, to return to the capital in three to five years is obviously impossible.
So all in all, money, sales and effect are complementary relationships, and it is very difficult for Azalea to vigorously implement power exchange at present.
Secondly, it's time to talk about Azera's submarine service. I'm not sure how much I'm going to be able to say about it, but I think it's a good idea to talk about the service.
All of Azera's policies and services are formulated from the user's point of view, allowing the user to form a sense of "his own people", thus establishing a proactive and strong relationship between people and the brand.
If the brand maintains users in the early stages, then users who have bought cars are already protecting the brand on their own. Many Azera owners have taken it upon themselves to share the virtues of Azera online, and when there's negative news about Azera, they've rallied to the cause, with some users renting billboards for Azera out of their own pockets.
If you open up the Azera app and browse through the owner's comments, the community culture is no worse than that of a B-station. This "family culture" has also been a sweet spot for Azera. During the epidemic, 69 percent of orders came from repeat users.
Geely's Li Shufu once described the "car is not just four wheels plus two sofas", like the car friends certainly do not agree, but you can also see that the early national understanding of the car is still hardware-based, so what is the future of the car?
I think it will be an Internet device, we will spend more time with the car, just like our cell phones, live into a part of our lives. So the competition in the car industry in the future is definitely not about hardware, but about systems and data, about scenarios, about our needs themselves.
Ideal product, Peng heavy R & D, Azure heavy user, differentiated competition, who will be better? We can only leave it to the market to test.
Standing at this point in time, Li Bin's situation is still far from "cool", outside the Tesla tiger and wolf division, inside the new car-making forces struggling, Azera's situation is also, as he said in a recent appearance, just "from the intensive care unit to the general ward! "
But for Li Bin and Azalea, the future of the company is becoming clearer with the support of capital. As for whether it's a success or a failure, a winner or a loser, we can't really make a definitive conclusion at this point, and we'll see what happens in about a decade's time.
*Photos in this article are partly from the Internet
This article comes from the author of the automotive home, and does not represent the views of the automotive home position.