AutoBeta(AutoBeta.net)11/03 Report--

Impulse at the end of the year is a common practice for carmakers, and after November, a number of car companies have launched price cuts to hit sales.

On the evening of November 2nd, Zero Auto official announced that the price of all its models was reduced, with a financial discount of up to 10000 yuan per Taiwan. Zero car said that from November 1 to November 30, zero run T03, zero run C01, zero run C11, zero run C01 super extended range, zero run C11 super extended range can enjoy financial discount, optional funds, and so on.

This is not the first time that the prices of zero-running cars have been cut this year. In August, Zero announced two C11 models and three C01 models, with a maximum drop of 20,000 yuan. As for the reasons for the price reduction, Zero cars said that the purpose of the price reduction was to increase the sales of high-end models and optimize the product structure. "as the gross profit space of the high-end model itself is relatively large, so the price reduction will not affect the follow-up improvement of the gross margin of zero-running cars."

On October 16th, Zero released its third-quarter results. According to the financial report, in the third quarter of this year, zero-running cars achieved an operating income of 5.656 billion yuan, an increase of 31.9 percent over the same period last year; a net loss of about 986 million yuan, compared with a net loss of 1.34 billion yuan in the same period last year, and a gross profit margin of 1.2 percent, realizing a positive gross profit margin for the first time, becoming the second car company with a positive gross profit margin among the new forces.

At the earnings call, Zero said that the conversion of gross profit margin was mainly due to the reduction of production costs due to technology cost reduction and sales growth, including a reduction of 30,000 yuan per car on the material side, the reduction in cost efficiency and the decline in battery prices. On the manufacturing side, the cost of each car has been reduced by more than 1,000 yuan through the optimization of the car-building process.

Zhu Jiangming, founder, chairman and CEO of Zero Motor, said at the earnings briefing: "with the continued cost reduction measures and the growth of sales, the manufacturing cost of Zero cars still has room to decline, and the gross profit margin in the fourth quarter is expected to be higher than that in the third quarter." As for the longer-term goal, Zero says it hopes to achieve a gross profit margin of 5% per cent next year.

So far, zero-running cars on sale include C01 extended range, C11 extended range, C01, C11, T03, S01 a total of six models. The latest data show that 18202 zero-running cars were delivered in October, an increase of 15.20 per cent month-on-month and 159.06 per cent year-on-year, a record high again. A total of 107029 vehicles were delivered during the year, an increase of 13.11 per cent over the same period last year, and 53.51 per cent of the annual sales target of 200000 vehicles had been achieved in the previous October. According to the current sales growth rate of zero-running cars, it is still a long way to go for zero-running cars to achieve the annual sales target.

Recently, zero-running cars move very frequently. On Oct. 26, Zero announced a strategic cooperation agreement with Stellantis Group, which invested about 1.5 billion euros (11.6 billion yuan) to acquire a 20% stake in Zero. In addition, the two sides will also set up a "zero running international" joint venture with a share ratio of 51:49. At the Munich auto show in September, Zero launched the global product C10, which will make its domestic debut at the Guangzhou auto show and will be listed in China and pre-sold before the end of the year, and pure electricity and extended range will be listed at the same time. Zero-running cars are expected to sell 30,000 cars a month next year.

Nowadays, the "price war" of new energy vehicles has become white-hot. The day before Zero Guan announced the price reduction of the whole series, on November 1, BYD announced that it included destroyer 07, frigate 05 champion version, dolphin, seal champion version and Song PLUS champion version, with discounts ranging from 0.5 yuan to 18000 yuan. In addition, Qin PLUS EV 2023 champion version can also enjoy a cash discount of 10,000 yuan. On the same day, Lectra also announced that it would complete the lock order of its 08 model in November and pick up the car before the end of the year, with a subsidy of 6000 yuan and a free NOA service for five years. After the discount, the price range of Lectra 08 is 202800-282000 yuan. In addition, Euler Lightning Cat also joined the price reduction on October 31. After the discount, the starting price of the model was reduced to about 150000 yuan, while the price of the dark version was 176300-241300 yuan.

November is the off-season for sales in the car market, and the end of the year is also a key period for auto companies to hit the annual KPI. The industry believes that this new round of price cuts is a key period for car companies to increase profits and increase sales, and it does not rule out that more car companies will join the year-end "price war" in the follow-up.

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