High-End New Energy Vehicle Brands From Mainstream Chinese Automakers Reveal New Funding Efforts

In recent years, traditional automakers in China have taken turns creating a new brand of premium electric vehicles, as the segment experiences substantial growth in the world’s largest auto market and new startups are springing up to grab more market share in smart vehicles. the era of electric vehicles.

And now the new brands seem to be accelerating their progress. In just one month, four high-end new-energy vehicle brands from traditional Chinese automakers revealed new funding efforts.

Photo credit: GAC AION

On July 18, GAC AION announced the start of a new capital increase. On the first day of August, IM Motors, backed by SAIC Motor, announced that it had signed the Series A equity financing agreement, with its valuation reaching RMB 30 billion. A day later, AVATR Technology, backed by Changan Automobile, CATL and Huawei, announced the completion of its Series A financing round. And also on August 2, Dongfeng’s VOYAH unveiled its first capital raising plan. for external investors.

One of the reasons for the new financing plans is that even though the new brands are backed by traditional automaker giants, the smart electric vehicle industry requires long-term and continuous investment, which makes it difficult only for established automakers, which also have many units to finance, are pouring money incessantly.

High-End New Energy Vehicle Brands From Mainstream Chinese Automakers Reveal New Funding Efforts

These four emerging brands themselves are also not currently generating profits, even though they all have vehicles on the market. Comparatively, GAC Group’s AION has reached a certain scale of production and sales. With five models released, namely the AION Y, AION S PLUS, AION S, AION V PLUS and AION LX PLUS, the brand delivered 25,033 vehicles in July 2022, far more than the respective deliveries of local startups, such as XPeng, NIO and Li Auto. In the first seven months of 2022, its deliveries more than doubled year-on-year to 125,284 units.

Despite the increasing delivery performance, AION was unable to turn around. Its annual net loss was RMB 621 million in 2019, RMB 688 million in 2020 and RMB 1.389 billion in 2021. Last month, Zeng Qinghong, chairman of GAC Group, said that all vehicle manufacturers in new energy, with the exception of Tesla, have not broken even.

High-End New Energy Vehicle Brands From Mainstream Chinese Automakers Reveal New Funding Efforts

Photo credit: VOYAH

Apart from GAC AION, IM Motors and VOYAH are slow to expand their production and sales scale. SAIC Motor data showed that as of the end of July, IM Motors, which currently has only one model for sale, had delivered 1,051 IM L7s since the model began delivery. VOYAH delivered 1,793 vehicles in July, including the VOYAH Free and the VOYAH Dreamer.

High-End New Energy Vehicle Brands From Mainstream Chinese Automakers Reveal New Funding Efforts

Photo credit: AVATR

The AVATR 11 just hit the market earlier this month with a price range ranging from 349,000 RMB to 409,000 RMB. Deliveries of the long-range versions of the new model will begin in December while the ultra-long-range version is expected to start shipping from the first quarter of next year. Apparently, the brands above still have a long way to go before they become profitable.

In addition, over the past two years, soaring raw material prices and automotive chip supply shortages have also reduced automakers’ profits and slowed vehicle production, slowing the development of new automotive brands’ progress. .

High-End New Energy Vehicle Brands From Mainstream Chinese Automakers Reveal New Funding Efforts

Photo credit: IM Motors

Apart from alleviating capital pressure on the established automakers behind these brands, bringing in external funds before the IPO can also help increase market value. For example, the market valuation of IM Motors stood at RMB 30 billion after its first round of funding.

Also, fundraising means more than new investments. “We can find strategic partners in the intelligent electric vehicle segment, the whole industrial chain and the ecosystem through the capital market,” said An Conghui, CEO of Geely’s ZEEKR brand after the round. pre-A of 500 million mark, which listed Intel Capital Corporation, CATL. , Cathay Fortune Corporation, Bilibili and Boyu Capital as new investors. After the round, ZEEKR got a market value of RMB 8.928 billion.

Meanwhile, An Conghui also pointed out that the purpose of obtaining capital market support is to be more powerful in the industry, but capital market efforts do not mean that ZEEKR will fully rely on the capital market to achieve its development.

The promising market for new energy vehicles will encourage these brands to move fast. According to the China Passenger Car Association, retail sales of locally produced new energy passenger vehicles (NEPVs) totaled 2.733 million units in the first seven months of this year, up 121.5 percent from last year. one year ago. And the strong momentum in June and July suggested that market demand exceeded supply.

The association noted that, if the industry can continue to improve its supply capacity, average monthly NEPV sales may reach 600,000 vehicles in the remaining five months of 2022. Thus, the association raised the outlook segment sales for this year from 500,000 to 6 million units. In such a segment with high potential, all players will certainly redouble their efforts. We’ll wait and see who comes out on top.

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