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BYD and Daimler's joint venture "DENZA momentum" new energy vehicle brand, which has failed to make a profit for nine years, has been maintained by continuous capital increases and blood transfusions by both shareholders. On January 21, BYD announced that it would once again increase its capital to the Tengli brand, the amount of which reached 350 million yuan.

According to the announcement, BYD's board of directors agreed to the company's holding subsidiary BYD Automotive Industry Co., Ltd. to increase the capital of Tengli New Energy by RMB 350 million. After the capital increase is completed, the proportion of shares held by the company through its holding subsidiary BYD Automotive Industry Co., Ltd. will remain at 50%.

According to the regulations, the other shareholder, Daimler Greater China, also increased its capital by 350 million yuan at the same time, maintaining a 50% stake in 50% of the company, which means that the brand has received a total of 700 million yuan this time.

BYD also said that Tencent is a joint venture focused on domestic high-end electric vehicles, and the capital increase by both shareholders is mainly used to replenish working capital and support its follow-up business development. In the future, with the close cooperation and strong support of both shareholders, Tengli will also launch brand-new models with more superior performance according to market demand, and formulate sales strategies in line with product positioning, so as to promote the gradual improvement of sales volume. And then promote their own profitability.

According to public reports, Tengli lost 1.3 billion yuan in 2016, 477 million yuan in 2017 and 888 million yuan in 2018, while the loss from January to November 2019 was 1.01 billion yuan, and it has lost more than 4.5 billion yuan in the past six years. As a result, momentum has been sustained by continuous capital transfusions by BYD and Daimler for years.

Shenzhen Tengli New Energy Automobile Co., Ltd. was established on February 16, 2011. BYD Automotive Industry and Daimler Greater China Investment Co., Ltd. each hold a 50% stake. The first product, Tengli 300, went on sale in 2014 and was positioned as a high-end commercial electric vehicle, which sold for as much as 369000 to 399000 yuan before the subsidy. After upgrading, it went public with momentum 400 in 2017 and 500 in 2018, and the mileage was improved, but it could not solve the situation of low brand awareness and unrecognized products, resulting in low sales volume.

Data show that in the four years from 2015 to 2018, Tengli sold only 11774 vehicles, of which only 1974 were sold in 2018, down 58.12% from the same period last year.

In 2019, with the strong support of shareholders of both sides, Tengli obtained continuous working capital, the new car Tengli X was listed on the market, and connected to the sales channels of Mercedes-Benz dealers for sales.

Tengli X is the brand's second product. The new car is based on BYD Tang EV600 and went on sale on November 22, 2019. The price of the pure electric model is 31.98-357800 yuan, and that of the plug-in hybrid model is 28.98-319800 yuan. The new car design is more likely to be accepted by the market and sold at Mercedes-Benz dealerships, or further increase the brand premium.

Since July 1, 2019, Beijing Mercedes-Benz sales and Service Co., Ltd. is officially responsible for the operation of some business of Tengli, including sales, marketing and brand communication, customer service, network development and so on. Some Mercedes-Benz dealers are responsible for customer service such as sales, maintenance and repair of Tengli X. at present, there are 88 dealers in 44 cities.

Many netizens said that a Mercedes-Benz standard horse is a big seller. The side shows that even if the momentum is sold in Mercedes-Benz dealers, low brand awareness is indeed the biggest obstacle. Now that the growth rate of the new energy vehicle market is slowing down, subsidies are sloping sharply, and momentum has missed the period of rapid growth, brand promotion will become more and more difficult. At present, only by increasing shareholders' capital and transfusion can not be sustained for a long time. To achieve self-hematopoiesis can survive.

BYD's technology, sold by Mercedes-Benz dealers, can the brand be saved with this new car?

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