In 2022, it was the most glorious year for Nezha Auto since its establishment eight years ago.
Relying on two quite competitive models, the Nezha U and Nezha V, Nezha achieved an annual sales volume of 152,000 vehicles, outperforming well – known brands like NIO and Li Auto and topping the sales list among new – energy vehicle startups in 2022.
At that time, Nezha’s slogan was “Build cars for the people”. Everyone thought that this company would become the “Pinduoduo” in the automotive industry, firmly occupying the low – to – mid – end market in this era where cost – effectiveness reigns supreme.
Even with hindsight, Nezha at that time deserved its market position.
Because it maximized the strategy of “low price, high configuration” in the price range where consumers care most about cost – effectiveness.
Let’s start with the Nezha V, which was the most crucial model for Nezha’s take – off.
Although its selling price was only between 70,000 and 90,000 yuan, the Nezha V had a wheelbase of 2,420 millimeters and a length of over 4 meters, making it a genuine compact SUV. Most of the products in the same price range at that time were micro – cars like the Changan Benben and Chery Ant.
This was really smart.
Now all car companies claim that their products offer extreme cost – effectiveness, but some models sell well while others don’t.
In my opinion, those models that don’t sell well fail to understand the concept of “cost – effectiveness” thoroughly enough.
Consumers in different price ranges and different customer groups have different understandings of cost – effectiveness.
In the price range around 300,000 yuan, even with high – end configurations, without features like a refrigerator, a large color TV, a comfortable sofa, and zero – gravity seats, the cost – effectiveness is considered insufficient.
In the price range around 200,000 yuan, even with strong performance and fast acceleration, if a high – level intelligent driving system is not standard, consumers will feel that something is missing.
When it comes to the price range around 100,000 yuan, all cost – effectiveness boils down to one thing:
Space, space, and damn it, still space.
The Nezha V targeted this very demand.
In 2020, Nezha launched the Nezha V, a proper SUV. By using a large – car – against – small – car misaligned competition strategy, it outperformed the so – called “old – man’s joy” vehicles in the same price range and achieved a sales take – off.
The other model, the Nezha U, followed a similar path.
Although its price reached the mainstream range of 110,000 to 160,000 yuan, the Nezha U didn’t have “tech – savvy” designs such as frameless doors and hidden door handles, which are standard in electric vehicles. It also chose low – end configurations for intelligent features and the in – car infotainment system. However, its rear – seat space far exceeded that of vehicles in the same class.
For the vast majority of ordinary Chinese consumers, a family usually has only one car, and the price is likely to be around 100,000 yuan.
In such a market, the most important thing for a car is not how long its strong points are, but that it should have no weak points. Whether it’s for family rides or cargo storage, space is king.
Nezha accurately grasped this point. Relying on its superiority in space, it became the sales champion among new – energy vehicle startups and was extremely popular for a while.
If Nezha’s glorious moment was accumulated through one – by – one sales, then WM Motor had a halo over its head from the very first day of its establishment.
WM Motor’s founder, Shen Hui, worked at BorgWarner, the world’s largest automotive parts supplier, in his early years. He turned the company’s Chinese factory from the verge of bankruptcy into a major taxpayer in Ningbo.
Later, he switched to Fiat and participated in the joint venture between Fiat and GAC. During the 2008 financial crisis, he led Fiat China to achieve counter – cyclical growth.
His most brilliant battle in his career was joining Geely in 2009 and leading the acquisition of Volvo. Thanks to this largest acquisition in the history of the Chinese automotive industry, Shen Hui became a legend. Later, as the chairman of Volvo China, he established two vehicle manufacturing plants in China and turned the company around to profitability two years after the acquisition.
Since then, Shen Hui has been known as “the first person in the globalization of the Chinese automotive industry”.
In 2015, after working as a senior executive for half a lifetime, Shen Hui chose to start his own business at the age of 45, and WM Motor was founded.
True to expectations, in 2018, WM Motor launched its first product, the EX5. By the next year, its sales volume reached 16,800 units, helping WM Motor become the second – best – selling brand among new – energy vehicle startups, only after NIO.
Interestingly, different from NIO, XPeng, and Li Auto, WM Motor bears more imprints of the traditional automotive industry.
For example, it chose to build its own factories instead of using contract manufacturing. In 2016, it established a vehicle manufacturing base in Wenzhou and later built a second base in Huanggang.
Also, WM Motor was not only favored by Internet capital and venture capital such as Tencent, Baidu, and Sequoia, but also received a significant amount of investment from local governments in the early stage.
It can be said that among new – energy vehicle startups, WM Motor represents another path for Chinese new – energy vehicle startups besides the “Internet – led car – building” model.
However, even someone as outstanding as Shen Hui is not the most well – connected founder among new – energy vehicle startups.
Because the founder of HiPhi has a higher profile.
Founder Ding Lei joined SAIC Volkswagen in 1988. In this year, Shen Hui had just gone to the University of California, Los Angeles (UCLA) in the United States for his freshman year. He Xiaopeng and Li Bin were still in middle school, and the post – 80s Li Xiang was in the second grade in Shijiazhuang.
Later, Ding Lei successively served as the general manager of SAIC – GM and the vice – president of SAIC, leading SAIC into the “one – million – sales” era. In 2013, Ding Lei even entered the political arena and served as the deputy head of Shanghai Pudong New Area.
During his tenure as the deputy head, Ding Lei led the construction of the largest overseas super – charging station at that time (with 50 charging piles). To some extent, it laid the early foundation for Tesla’s super – project to settle in Pudong.
It can be said that Ding Lei is a real automotive godfather.
In 2017, Mr. Ding started his own business and founded HiPhi Motors. Right from the start, it targeted the 600,000 – 800,000 – yuan market.
In 2020, when the first mass – produced model, the super – car SUV HiPhi X, was launched, it really shocked its peers.
Firstly, its configuration was truly luxurious. It was not only equipped with HiPhi’s patented NT wing – opening doors, programmable intelligent headlights, and full – leather seats throughout the car, but also had extremely exquisite workmanship. The refrigerator had three – level temperature adjustment, the cost of the headlights exceeded 100,000 yuan, and the sound system was tuned in the UK before the car was shipped back to China.
Secondly, the price was really astonishing, ranging from 570,000 to 800,000 yuan, easily outperforming NIO, which was positioned as a luxury brand at that time. Even now, brands like Zeekr and Yangwang are in this price range or even higher. However, for an independent brand without the support of a large – scale enterprise, targeting the ultra – luxury market alone is still very risky.
Finally, there’s the sales volume. In 2020, it sold more than 4,200 units, and in 2021, it sold more than 4,300 units. Although the absolute number was not large, in an era when the annual sales champion among new – energy vehicle startups only sold 40,000 – 50,000 units, it was still quite considerable. Moreover, the price of a HiPhi car was equivalent to two or three cars of other brands, so the sales volume had high value.
In those years, HiPhi was regarded as the most special, most individual, and most likely brand among second – tier new – energy vehicle startups to challenge the dominance of BBA and even Porsche.
During the years when new – energy vehicle startups were emerging and the penetration rate of new – energy vehicles in China began to increase rapidly, Nezha, WM Motor, and HiPhi undoubtedly had their own glorious moments.
Although they had different origins and different positioning, at certain moments, their popularity was no less than that of NIO, XPeng, and Li Auto, and they could even challenge the status of the so – called “Big Three” among new – energy vehicle startups.
So, what caused their glory not to last?
How did these once – glorious new – energy vehicle startup brands like HiPhi, Nezha, and WM Motor end up in a situation where they can only be rumored to be “resurrected”?
Today, let’s talk about the losers among new – energy vehicle startups.
If we consider 2014 as the first year of new – energy vehicle startups, then from 2014 to 2019, it was a chaotic period. There were once more than a hundred new – energy vehicle startups in the market at the same time. Just in 2017, more than 60 new automotive brands emerged.
However, only a few have survived until now and still have some influence in the industry.
The other more than a hundred companies died on this cruel car – building path for various reasons.
Coincidentally, HiPhi, Nezha, and WM Motor represent three of the most typical ways of failure.
Let’s start with HiPhi.
The most interesting thing about HiPhi is that its strategy is an exact copy of Tesla’s.
What is Tesla’s strategy? You can read Elon Musk’s 2006 article, “The Secret Tesla Motors Master Plan”. In it, he outlined a series of top – down strategies for Tesla.
Among them, the two high – end flagship models, the Model S and Model X, were crucial steps for the company to enter the market and establish its high – end luxury positioning.
There’s no need to elaborate on how successful these two models have been, especially in the high – end market, where many business and entertainment celebrities have bought them.
HiPhi clearly copied the “dual – flagship” strategy. Two years after the launch of the HiPhi X, HiPhi launched its second flagship, the coupe – style HiPhi Z, which features a cyber – mecha warrior design style and is equipped with a self – developed in – car system and intelligent driving system.
As sci – fi as its appearance, the price of the HiPhi Z is also high, over 600,000 yuan, still outperforming other new – energy vehicle startups.
HiPhi undoubtedly hoped that the HiPhi Z could continue the success of the HiPhi X and firmly establish the company in the ultra – high – end price range with these two heavy – weight flagships.
To achieve this, HiPhi spent two years and a large amount of funds recovered by the HiPhi X to polish this mecha warrior. To support the Z, HiPhi doubled its staff size within two years and opened more than 300 new stores across the country after its launch, sparing no expense.
However, things didn’t go as HiPhi wished. The HiPhi Z was a flop. Only about 1,000 units were sold in the four months after its launch. Later, HiPhi even stopped publishing the sales data of the HiPhi Z, presumably because the sales were negligible.
The failure of the Z was predictable. After all, the X was positioned as a super – car SUV and was not known for its space and practicality. Now, launching another coupe, the two models overlap too much in terms of price and positioning. The customer group that HiPhi can reach is limited. Many people who bought the X won’t buy the Z.
This alone is not fatal to the company.
What’s really fatal is that the intensity of competition in the new – energy vehicle market increased exponentially during the two years when HiPhi was polishing the HiPhi Z.
In 2022 alone, Li Auto launched three models, the L9, L8, and L7, solidifying its position as the king of extended – range vehicles and the godfather for family men, and also lowered its product price range.
NIO launched its second – generation platform and completed listings in Hong Kong and Singapore successively, preparing for the subsequent fierce competition in terms of capital and products.
Although XPeng experienced a setback with the G9, the company carried out a major personnel change by bringing in senior executives from the GAC Group and introduced Wang Fengying as the general manager, conducting drastic reforms in the corporate organization. And the financing continued.
It can be said that while HiPhi was patiently polishing the HiPhi Z, thinking it could achieve a one – shot victory, other companies realized that the competition in the new – energy vehicle market was a long – term battle and there was no possibility of achieving success in one go. So they all chose to stockpile resources for the long – term and stepped up the arms race.
As a result, we can see that HiPhi wasted these two years.
In 2023, realizing its mistake, HiPhi hurriedly launched its third “life – saving car”, the HiPhi Y, priced in the 300,000 – yuan range. It is a genuine mainstream SUV, taking a more approachable route compared to its previous products.
However, in fact, the HiPhi Y still didn’t deviate from the overall strategy and was still following Tesla’s successful strategy. In HiPhi’s plan, it would, like the Model Y, support the entire company’s fate on its own.
Unfortunately, this didn’t happen.
After all, when the first – generation domestic Model Y was launched, NIO was still dreaming about the market above 400,000 yuan, XPeng only had the low – priced G3, and the Li ONE was in a completely different market segment from the Model Y.
During the years when the Model Y dominated the domestic market, there were almost no decent competitors.
But by the time the HiPhi Y was launched, almost all competitive car companies had already made arrangements in the 300,000 – yuan SUV market segment. HiPhi wanted to increase sales in the lower – end market but found that it was already a red – ocean market with no room for growth.
It’s predictable that after the launch of the HiPhi Y, its monthly delivery volume only reached more than a thousand units.
Subsequently, HiPhi defaulted on its payments to suppliers. Many suppliers stopped supplying parts to HiPhi, and HiPhi could no longer deliver cars. After that came lay – offs, salary disputes, and production halts. In early 2024, HiPhi completely shut down, and in the eyes of consumers, this car company was effectively dead.
The most direct reason for HiPhi’s failure is that the company ignored the domestic competitive environment and blindly copied Tesla’s strategy, thinking it could become the “Chinese Tesla”.
HiPhi is not the only company dragged down by a wrong strategy.
Nezha is also one.
In 2022, the success of the Nezha U and Nezha V once pushed Nezha to the top position among new – energy vehicle startups in terms of sales.
However, Nezha didn’t hold this throne firmly.
Firstly, the unit price and gross profit of Nezha cars were very low. By selling cheap cars at a loss, its sales volume was only two or three thousand units more than that of NIO, XPeng, and Li Auto. This sales champion title was somewhat unworthy.
该文观点仅代表作者本人，36氪平台仅提供信息存储空间服务。
36kr Europe (eu.36kr.com) delivers global business and markets news, data, analysis, and video to the world, dedicated to building value and providing business service for companies’ global expansion.
© 2024 36kr.com. All rights reserved.

source