AutoBeta(AutoBeta.net)12/25 Report--

On December 24, BYD also announced that its holding subsidiaries BYD Automotive Industry and Daimler have respectively increased their capital by 1 billion yuan in currency to Shenzhen Tengli New Energy Automobile Co., Ltd. (hereinafter referred to as "Tengli"). After the capital increase of the shareholders of both sides is completed, BYD Automotive Industry and Daimler will each continue to hold 50 per cent of Teng Teng New Energy.

It is worth mentioning that on the day BYD issued the capital increase announcement, BYD also announced that it had signed an equity transfer agreement with Daimler to adjust the momentum, and the two sides planned to transfer the Tengli stake. After the completion of the transfer, the shares held by Daimler and BYD have been adjusted to 10% and 90%, and the related matters are scheduled to be completed by mid-2022.

Momentum grew up with a golden key, and whether it is BYD or Daimler, its position in the automotive industry is obvious to all. On March 1, 2010, Chinese independent brand BYD and German car giant Daimler jointly signed a memorandum of understanding in Stuttgart, the two sides agreed to jointly fund the construction of a high-end new energy vehicle brand, DENZA momentum brand was born. On February 16, 2011, Shenzhen Teng Teng New Energy vehicle Co., Ltd. was officially established. At the beginning of the brand's birth, Wang Chuanfu, chairman of BYD, said: "as the child of Daimler and BYD, momentum is a brand born on the shoulders of giants."

Although the momentum grew up on the shoulders of giants, the process was not smooth. The first concept car was unveiled at the 2012 Beijing Auto Show, and the mass production version of Tencent 300 was launched at the 2014 Beijing Auto Show and officially went on sale in September of that year, priced at 36.9-399000 yuan.

From the point of view of the time of development, Tengli is one of the earliest car brands with pure electric layout. Why would you say that? In 2014, Li Bin, chairman of Yi Auto, has just led a team to set up Xilai Automobile, while Tesla of the United States has just landed on Nasdaq under the leadership of Musk.

However, fast layout does not mean good development. The sales volume of Tengli 300, which sells for up to 300000 yuan, is not optimistic. Although it has been upgraded many times since then, it has launched Tengli 400,500 and so on, but it is still unable to reverse the market. Public data show that Tengli sold 2800 vehicles, 2287 vehicles, 4713 vehicles, 1974 vehicles and 2089 vehicles respectively from 2015 to 2019, with a cumulative sales volume of 13863 vehicles in four years and a cumulative loss of more than 3.5 billion yuan over five years.

In the past five years, both BYD and Daimler have been laying out new energy vehicles, such as BYD's dynasty series and Daimler's EQ series, which do not focus on momentum, but provide financial support for development. Data show that in May 2017, May 2018, February 2019, May 2019 and January 2020, BYD and Daimler increased their capital to Tengli by 1 billion yuan, 800 million yuan, 400 million yuan, 300 million yuan and 350 million yuan respectively, and gained a total of 5.4 billion yuan in shareholder capital increase over a three-year period.

Of course, in order to reverse the booming market situation, BYD and Daimler have also made efforts. Beijing Mercedes-Benz sales and Service Co., Ltd. is directly responsible for the operation of the brand, including sales, marketing and brand communication, customer service, etc., while BYD is in charge of production. At the Guangzhou Auto Show held in November 2019, Tengli X, the second model of Tengli, was officially put on the market, with a price of 31.98-357800 yuan for pure electric models and 28.98-319800 yuan for mixed models. In terms of appearance, Tengli X incorporates a large number of Mercedes-Benz design languages and is sold at Mercedes-Benz dealers to enhance brand awareness. However, Tengli X still failed to reverse the disadvantage, with cumulative sales of only 4175 vehicles in 2020, due to the fact that Tengli X is based on BYD Tang EV600, although it is integrated into the design of many Mercedes-Benz, but the foundation is still BYD.

In February this year, Kang Linsong, CEO of Daimler Group, said publicly, "the success of the new Tengli X will determine the future of the brand. Daimler's cash investment in Teng Teng has been completed, and we will continue to monitor its development before making a decision." In April, several media reported that Daimler wanted to end the momentum project and no longer invest in the project, but the news was not confirmed. From the current point of view, this capital increase or the final support of both BYD and Daimler for Tengli, if Tengli's shares are transferred, then BYD will be responsible for the future development of Tengli.

Prior to this, Daimler Greater China Chairman Tang Shikai said: "Daimler's new energy products will adhere to the two-track development path, BAIC and BYD are two parallel lines." But our biggest partner in China is still BAIC, and we have invested 5 billion euros to develop new energy products under the Mercedes-Benz brand.

In 2019, Mercedes-Benz's first domestic pure electric EQC officially went on sale, and the current price is 49.98-579800 yuan. This year, Mercedes-Benz launched two more domestic pure electric cars, priced at 365800 yuan for the EQA and 437800 yuan for the EQB. On December 17th, Mercedes-Benz EQS announced a price range of 107.96-1.5186 million yuan, which will be officially put on the market early next year. In addition, domestic EQE will also be listed next year. Mercedes-Benz has made a rapid progress in the layout of the EQ family during the year, and these moves confirm Tang Shikai's remarks from the side that Daimler will speed up its cooperation with BAIC instead of focusing on the booming brand.

The momentum made by BYD and Daimler once grabbed a favorable position in the market at the first time, but today, 10 years later, it is facing the dilemma of unsalable sales. Cui Dongshu, secretary general of the Federation of passengers, believes that today's momentum brand is a portrayal of "strength is different-determined to be of one mind, development and internal friction coexist." Although the momentum is jointly funded by BYD and Daimler, aimed at high-end brands, BYD's dynasty series models have gone to the high end, with the flagship sedan Han selling more than 27000 cars in the first quarter of 2021. Daimler-Mercedes-Benz has gone from a blank sheet of electric cars to EQC, EQA, EQB, EQS and other products.

While the momentum is in deep trouble, NIO, Xiaopeng, ideal and other previously slow-growing new power companies have achieved good results in the past year, proving that the combination of power and power is not king. Standing on the shoulders of giants, growing with the golden key is not the support for the long-term development of the brand.

In response to the equity change, Daimler said BYD would give greater operational support to promote its success in the future. At the same time, Daimler will continue to support the continued development of momentum as a shareholder. Daimler and BYD will also continue to promote their long-term partnership in areas such as battery supply.

However, at present, BYD has a lot of product camps, such as Dynasty, Ocean Network, e-Network, and will also launch new high-end brands next year. At the same time, a joint venture has been set up with Toyota, and the first model will be launched next year. In this context, BYD has been too busy to take care of itself, and how to re-lead the momentum development?

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