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Changan Automobile (000625.SZ) issued an announcement at noon that Changan Lilai New Energy Automotive Technology Co., Ltd., the company's holding subsidiary, has officially changed its name to Avita Technology Co., Ltd. ("Avita Technology"). In the information announcement, it is pointed out that Avita Technology will work with Changan Automobile, Huawei, and Ningde era to create an intelligent electric network car platform. Combined with the news that Huawei wants to build a high-end electric car brand AB with Changan two days ago, Avita Technology is the company that has been specifically implemented, and NIO has also been removed from the name of the new company, which also means that the traces of this cooperation between Changan and NIO have been completely erased.

At the end of last year, Zhu Huarong, chairman of Changan Automobile, revealed for the first time that Changan Automobile would join hands with Huawei and Ningde era to create a new high-end smart car brand. Recently, Tan Benhong, executive vice president of Changan Automobile, said that a new brand AB will be established with Huawei. Changan New Energy and AB Automobile are two independent operating companies, of which Changan New Energy is the carrier of the new energy business of the Changan automobile brand, and the AB brand is a high-end smart electric vehicle brand jointly created with third-party resources. AB refers to the Avita technology announced today.

Changan Automobile has a long history of cooperation with Ningde era, according to the "Progress announcement on the disposal of transactional Financial assets" released by Changan Automobile on October 30 last year. From July 1 to October 30 last year, the company sold about 23 million shares of the Ningde era through centralized bidding, accounting for 0.99% of the current total equity of the Ningde era, with a cumulative transaction value of about 4.26 billion yuan. After deducting the relevant investment costs and taxes, the net profit of investing in Changan Automobile in Ningde era is about 1.971 billion yuan.

The partner NIO, which was erased from the original name Changan NIO, is a different scene. Changan Lulai New Energy Automotive Technology Co., Ltd. was once regarded as the landing of Changan high-end brand. Data show that Changan Lai is a 50% joint venture between Changan Automobile and Lulai Motor in July 2018, and Li Bin, founder of Lulai Automobile, who is good at appearing in the public, serves as chairman of the company. But only this time, there was not much news about the progress of Changan Lai. In June 2020, Changan Automobile began to increase its capital to Changan NIO. After the capital increase was completed, it changed from the equity sharing structure to Changan Automobile holding 95.38%. NIO held 4.62%. NIO immediately became a minority shareholder, Li Bin stepped down as chairman of the company, and Changan NIO former directors Li Wei and Zhang Yang also quit. Tan Benhong, executive vice president of Changan Automobile, served as chairman, and this adjustment means that the future of Changan NIO has been determined.

NIO's own position is to create a high-end positioning, and the previous assumption should be that Changan tried to use this methodology to bring up the Changan high-end electric car brand. Since 2017, NIO has started a multi-point blasting model, including Changan NIO, which cooperates with Changan, and GAC NIO, which cooperates with Guangzhou Automobile, in which it also tries to cooperate with SAIC, which is limited by the "regulations on Investment Management of Automobile Industry". It is required that the provinces where the new independent pure electric vehicle enterprises invest projects should meet the following conditions: (1) the utilization rate of automobile capacity in the last two years is higher than the average level of the same product category industry. (2) the existing investment projects of new independent pure electric vehicle enterprises in the same product category have been completed and the annual output has reached the construction scale. On the other hand, Shanghai has decided to introduce a project with a production capacity planning of 250000 vehicles to be built solely by Tesla, which has to wait and failed to make the trip. In 2018, Xilai barely completed the delivery of 10, 000 vehicles, resulting in an annual loss of 9.639 billion yuan. under such circumstances, it is naturally impossible to take into account a number of cooperative projects. Take Guang Qi NIO as an example. On December 27, 2019, Guangzhou Automobile NIO released its first new car 007 in the name of "HYCAN Co-creation", with annual sales of less than 1,000 units, and these investments may also be a burden. On the last day of 2020, GAC Weiwei announced that GAC Lai was the first Chinese car company to accept payment in bitcoin, which is not a legal tender in China and cannot be used as a means of payment.

Xilai decisively issued Weibo to clarify the relationship with GAC. In February 2021, GAC also began to increase its capital. Lailai did not follow suit, and its stake was also substantially diluted.

In these cooperation, car companies need the interaction of partners and produce practical results. It is a fact that NIO has completed the pricing of its own products, but if it can take volume, it will not lead to these partners, because it itself is in the rising stage of the market, which itself is a bit of conflict. Huawei is trying to use the advantages of car system and network distribution to promote cooperation with car companies, and a number of Internet companies are also trying to cut into the growing market from this point of view.

Xiaopeng's latest financial report suggests the idea of these new powers of cars, and the way car companies are valued is changing dramatically. Xiaopeng confirmed XPILOT software revenue for the first time in the first quarter of this year, totaling about 80 million yuan, including 50 million for 2020 and 30 million for the first quarter of this year. Xiaopeng said that the cumulative payment rate of XPILOT 3.0 exceeded 20% and reached 25% in March this year. Xiaopeng XPILOT's one-time payment price is 20, 000 yuan, and the three-year installment price is 36000. This will become a continuing source of income and profit in addition to vehicle sales. The monthly rent of NIO's self-driving is 680 yuan, which continues to generate a steady stream of income for these new forces during the 5-6-year use cycle. You know, these renewal services are extremely exclusive, and once they start paying, they are unlikely to switch to other software, and the revenue of these software is higher than that of traditional car sellers.

Selling cars does not make money. According to the financial report in 2020, the net profit of Changan Automobile is only 1600 yuan, and the profit reduction caused by double points in Changan is about 4000 yuan in 2020. With public announcements, Mercedes-Benz, BMW and Audi among luxury car companies generally maintain high profits, with long-term bicycle profits above 20, 000 yuan, American brand net profits at about 8000 yuan, and Korean brands at 4000-7000 yuan. Software revenue is obviously very important. Internet companies Xiaomi, 360 and Huawei are using their familiar commercial gameplay to enter a larger blue ocean market, so will traditional car companies benefit from it?

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