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Recently, Li Bin of Xilai Automobile said in an interview with the media: "car building requires a reserve capital threshold. I said 20 billion a few years ago, but now it may not be possible to do it without 40 billion."

"I think the threshold of the automobile industry is much higher than we thought, and today may be different from that of a few years ago," Li Bin said. At this point in time today, I think the threshold for investment in research and development, service system and infrastructure has actually become higher. " In Li Bin's view, the high investment in the automobile industry is not only in terms of fixed assets, but also in R & D and service system.

As for the saying that it takes 40 billion to build a car today, Li Bin explained that 40 billion is not an accurate number, but an intuitive judgment. "it is not that there is no chance (less than 40 billion). I will never say such a thing, but the risk will be much higher," it said. 40 billion refers to the financial reserves needed to truly become a competitive, sustainable and risk-resistant enterprise. If you don't reserve so much money, you have to take a lot of risk.

Li Bin said bluntly, "this is not to scare entrepreneurs. I am also an entrepreneur myself. We are still losing money today, so why lose money?" Because we have to invest in the future. If I don't invest, I can make a profit quickly, but what's the point? It is likely to fall off a cliff in two years. "

As we all know, Li Bin once said a sentence widely spread in the industry: don't build a car without 20 billion. At the 2016 Global New Energy Automobile Conference, Li Bin said bluntly that building cars is a very expensive thing, so startups want to build cars, at least need more than 20 billion of capital preparation, otherwise they will not be able to do a good job. In addition, there is a need to improve the efficiency of the use of funds, that is, even with 20 billion of the funds prepared, the money still has to be saved. Because the industrial chain of car building is very long, if any link fails to control the cost, it will lead to the high cost of mass production, which will lead to the loss of market competitiveness.

When Li Bin said, "Don't build a car without 20 billion yuan" in 2016, there was no model on the market. The first product, ES8, launched in December 2017, launched on the New York Stock Exchange in September 2018, and the second model, ES6, officially launched in December of the same year. Since then, NIO, as a new power leader, began to attract the attention of the market, falling into huge losses in 2019. Li Bin was even called "the worst person in 2019", and netizens once commented that "as early as this year, the slowest next year".

NIO in 2019 has a particularly deep memory for Li Bin. At that time, the funds of Lulai Automobile was in an emergency, and its share price plummeted under the influence of the recall caused by product spontaneous combustion, layoffs and cost cuts, and the departure of all the high-end companies. In October 2019, Xilai shares peaked at $1.19, close to the $1 delisting red line. At that time, in order to alleviate the financial problem, NIO actively sought financing, including Beijing Yizhuang State Investment, Zhejiang Huzhou Wuxing District Government and other financing issues, but all of them have failed.

In 2020, the first half of the year still showed a sluggish development under the influence of the epidemic, but with the financial support of Anhui Municipal Government, its funding problem was alleviated. After the second half of 2020, under the tuyere of new energy vehicles, the share price of NIO, as the first new power company to distribute new energy, once soared. So far, NIO has a total market capitalization of US $48.54 billion, ranking 14th in the global market.

At the beginning of the year, Li Bin lamented in an interview with CCTV that NIO laid off 30% of its staff in 2019, the stock price also fell to a freezing point, and many people thought that NIO was going to be delisted. Of course, we all know that the capital market will not talk about feelings, and sometimes we have to thank the capital for not saving, because if the rescue comes at that time, there will certainly be a lot of conditions. Of course, for NIO at that time, any conditions will be agreed, after all, if NIO falls down, there will be nothing.

From the current point of view, although the future development of NIO is still uncertain, it has gained a foothold. However, the current NIO is still in a state of loss, when to achieve self-hematopoiesis is still unknown. According to the third-quarter results of Lulai, the total revenue in the third quarter was 9.8053 billion yuan, an increase of 116.6% over the same period last year, and the net loss was 835.3 million yuan, a decrease of 20.2% compared with the same period last year and an increase of 42.3% over the previous quarter. The net loss belonging to the company's common shareholders was 2.8589 billion yuan, an increase of 140.7% compared with the same period last year.

However, in 2019, Li Bin also said publicly that it may take ten years for NIO to make a profit. NIO is only a four-year-old child, so don't think about a four-year-old child making money for milk powder. In an interview with the media, Li Bin also said that now NIO is Tesla four years ago. At that time, Tesla sold 100000 cars around the world and lost 2.2 billion US dollars.

How to evaluate "Don't build a car without 40 billion"? The automobile industry is concerned that, according to the current market competition trend, 40 billion is not an accurate figure, but the threshold for building cars is indeed rising, which stems from the improvement of consumers' consumption ideas. pay more attention to product quality, brand image, sales services and so on. In March this year, Xiaomi Group officially entered the bureau to build cars, with an initial investment of 10 billion yuan and an estimated investment of US $10 billion in the next 10 years. Not long ago, Volkswagen announced a new electrification transformation plan that will invest 89 billion euros ($101 billion) over the next five years. Toyota President Akio Toyoda said on December 14 that he plans to spend $35 billion on developing electric cars. Toyota is expected to launch 30 pure electric vehicles worldwide by 2030, with the ultimate goal of selling 3.5 million vehicles worldwide by 2030.

Various signs show that the layout of new energy needs a lot of financial support, such as product research and development, infrastructure construction, store laying, production qualifications and so on. Of course, a large amount of capital investment does not guarantee success. Evergrande, which has been equipped with new energy since 2017, has lost more than 15 billion yuan in the first half of the year, but Hengchi's new car has not yet been mass-produced, and its future is bleak. However, as Li Bin said, more money means less risk. After all, if you have money, you can do more, and if you have no money, you can only delist.

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