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On June 16, Li Bin, CEO of Xilai, said at a user communication meeting that Xilai was speeding up the research and development of models worth more than 200,000 yuan. At present, an agreement has been signed with the Hefei municipal government for the second phase of the Xinqiao plant to produce new brand models with a price of 200000 for the mass market, with a planned production capacity of 500000 vehicles. It is understood that the project covers an area of 1860 mu and is scheduled to be completed and put into production in 2024. This time, Li Bin also revealed that the new brand will offer a replacement version of the model, which will be 10 per cent cheaper than Tesla in terms of price for the Standard Tesla Model 3Unix Y.

In fact, there was a clue to the launch of a new brand by Xilai as early as last year. In March last year, Jianghuai Motors said it had signed a letter of intent for a joint venture with Xilai Motor, and the two sides planned to set up Jianglai Advanced Manufacturing Technology (Anhui) Co., Ltd. in Hefei, China. The business purpose of the joint venture company is to lead the manufacturing by innovation-driven, promote the transformation and upgrading of the automobile industry, and explore to create an innovative business model through in-depth cooperation in the field of advanced manufacturing technology and services. The registered capital of the joint venture company is proposed to be 500 million yuan, Jianghuai Motor plans to subscribe 51%, and Lulai Motor plans to subscribe 49%. On May 10, 2021, Jianghuai Automobile issued a tender announcement for the flexible technical transformation of the Gemini model production line, the final chassis assembly AGV transformation project, with a planned annual production capacity of 60, 000 vehicles.

Li Bin also said at the earnings meeting that the general rule of the automobile industry is that the models and prices that a brand can support are limited, so Xilai will choose to use new brands to enter the market of $30, 000 to $50, 000. It said that there is still a large market for the $30, 000 to $50, 000 market, and the premise is to enter the market without sacrificing gross profit and setting a reasonable gross margin range.

It is worth noting that at this communication meeting, Li Bin also said about the recent sales ranking: "cars are long-distance running, we never look at temporary gains and losses, and a month's ranking doesn't mean anything to us."

According to relevant data, 7024 cars were delivered in May, a small increase compared with the same period last year. NIO said demand for orders continued to be strong in May and production was expected to resume in June as supply chain companies returned to work and delivery of models, including the ET7, was expected to accelerate. After entering 2022, the ranking of Ulai is basically at the tail, and the previous sales king seems to be gone forever. In addition, from the first quarter results released by NIO, the situation of NIO is not optimistic. According to the financial report, the operating loss of NIO in the first quarter was 2.189 billion yuan, an increase of 639.7 percent over the same period last year, and a net loss of 1.783 billion yuan, an increase of 295.3 percent over the same period last year. The gross profit margin of Lulai vehicle sales in the first quarter was 18.1 percent, and the overall gross profit margin was 14.6 percent.

Xilai said that the year-on-year decline in vehicle gross profit margin was mainly due to changes in the proportion of the company's product portfolio, which led to a decline in average selling prices, which was mainly due to an increase in the cost of bicycle batteries. Li Bin pointed out: "the industry is facing rising prices of batteries, raw materials and chips, and our vehicle gross profit margin has also been affected." In order to ease the pressure of rising costs, Xilai Motor has previously announced that it will adjust the price of its products, but most of the price-adjusted products began to be delivered in the third quarter, so the gross profit margin in the second quarter of this year will still face greater challenges.

As for when the gross profit margin will resume growth, Li Bin said that the linkage between battery prices and raw material prices is basically determined by last month's raw material prices. The increase in battery costs in the second quarter is much higher than that in the first quarter, although there is a certain decline in May compared with April, but it is true that the gross profit pressure is relatively large in the second quarter. The cars with price increases will not be delivered until the third quarter, and the orders delivered now are basically before the price increases, while the increase in product prices will be reflected in the gross profit margin of cars in the third quarter, which is expected to rebound from the third quarter.

Xilai Automobile is the car company with the most product planning among the new car-building companies, but its sales data are not the most. According to the relevant data: the first quarter sales of Lulai car was 25768. With regard to the plan for the second quarter, Xilai said it would deliver 23000 to 25000 new cars, an increase of 5% to 14.2% over the same period last year, and total revenue is expected to reach between 93.4 and 10.09 billion yuan, an increase of 10.6% over the same period last year.

With regard to the longer-term new car planning, Li Bin said that according to the plan, the delivery of brand-new models will begin in the second half of 2024, and the price of the main products will be in the range of 20-300000 yuan. The model will be equipped with third-generation NT3.0 technology, power exchange architecture, and equipped with self-made battery packs. For the time being, all the models under NIO are positioned as high-end models, and the price of the products is not less than 350000 yuan. The launch of a new 200000 model with a lower positioning can complement the existing product system of NIO. This may also help NIO to further increase the scale of sales and seize more market share.

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