"Avatr strives to achieve break-even in the third and fourth quarters of 2025."

@TechNewKnowledge Original

With net losses exceeding 7.1 billion yuan in two and a half years, Avatr, backed by three major investors, has a clear IPO plan for 2026!

Recently, the Shanghai United Assets and Equity Exchange posted on its official Weibo account to promote the capital increase project of Avatr Technology (Chongqing) Co., Ltd. (hereinafter referred to as Avatr), stating that Avatr has a "clear plan to go public in 2026" when introducing investment highlights.

Founded in 2018, Avatr was formerly known as Changan NIO, a joint venture between Changan Automobile and NIO Inc. In August 2020, Changan Automobile increased its investment in Avatr, raising its shareholding to 95.38%, and Li Bin (founder of NIO) stepped down as chairman. In May 2021, it was renamed Avatr and jointly developed by Changan Automobile, Huawei, and CATL. It is a high-end new energy vehicle brand under Changan Automobile. Prior to this, Changan Automobile had repeatedly stated that Avatr had independent listing plans but had not given a specific timeline.

During the recently concluded "golden September and silver October" period, Avatr's monthly sales exceeded 10,000 units for the first time, reaching 10,056 units. Now, it has revealed plans to knock on the door of IPO in 2026.

Previously, Chen Zhuo, President of Avatr, said, "IPO is a solution to financing issues, but we also want to improve the corporate governance structure through listing and management requirements, making it more compliant and standardized. This is our primary goal." He also revealed that Avatr strives to achieve break-even in the third and fourth quarters of 2025.

01

Losses exceeding 7 billion in two and a half years

On October 11, Chen Zhuo, President of Avatr, revealed at a key supplier partner communication meeting that Avatr is currently conducting its C-round financing, raising funds of 10 billion yuan, with a post-investment valuation exceeding 30 billion yuan.

It is reported that in November 2021, Avatr completed its first round of strategic financing of 2.42 billion yuan. In August 2022, it completed its A-round financing of 2.547 billion yuan. In August 2023, it obtained 3 billion yuan in B-round financing. With these three rounds of financing, Avatr's total financing amounted to nearly 8 billion yuan, with a valuation of nearly 20 billion yuan.

An asset management analyst told a reporter from "Yangtze Business Daily" that after Avatr's C-round financing, it can alleviate the pressure of high debt ratio, enhance cash reserve capacity, and the company is trying to achieve profitability before the IPO. "These are all positive trends."

Zhu Huarong, Chairman of Changan Automobile and Chairman of Avatr Technology, has publicly stated multiple times, "As long as Avatr needs it, Changan Automobile will fully support it, providing funds, personnel, and technology as needed." This shows that Changan Automobile has high hopes for the high-end Avatr.

However, Avatr, which has only been established for three years, has not performed ideally in the past.

In 2023, Avatr's sales target was 100,000 units, but the actual annual sales were only 23,500 units, achieving only 23.5% of the sales target. In 2024, Avatr lowered its annual sales target to 84,000 units. However, even so, in the first nine months of 2024, Avatr's cumulative sales were only 40,900 units, achieving only 40.9% of the annual sales target.

At the same time, Avatr's financial situation is also under tremendous pressure.

It is understood that in 2022, Avatr's revenue was only 28.34 million yuan, with a net loss of up to 2.015 billion yuan. In 2023, Avatr's revenue increased to 5.645 billion yuan, but the net loss for the year further expanded to a staggering 3.693 billion yuan. In the 2024 semi-annual report, Changan Automobile disclosed that Avatr's operating revenue reached 6.152 billion yuan, with a net loss of 1.395 billion yuan.

This means that in the past two and a half years, Avatr's cumulative net profit loss has reached 7.103 billion yuan. As of the end of the first half of 2024, Avatr's total assets reached 12.746 billion yuan, with net assets of 706 million yuan and a debt ratio of 94.46%.

02

Betting on extended-range models

To solve the sales dilemma, Avatr has begun to expand into the extended-range market. The mid-size SUV Avatr 07, launched at the end of September, is the brand's first extended-range pure electric dual-power model.

According to data from the China Passenger Car Association, in the 200,000-300,000 yuan range, the penetration rate of pure electric vehicles is as high as 36%, but in the 300,000-400,000 yuan range, this ratio drops sharply to only 15.9%. In contrast, sales of extended-range models increased by nearly 90% year-on-year in September, with a growth rate far exceeding that of pure electric vehicles.

Compared to the previously launched Avatr 11 and Avatr 12 models, the Avatr 07 has a lower price, starting at 219,900 yuan, and also adds an extended-range version. October this year was the first full delivery month for the Avatr 07 and a crucial moment when Avatr's sales exceeded 10,000 units for the first time, doubling both year-on-year and month-on-month. As of the end of October, Avatr had achieved 60% of its annual sales target.

To ensure the achievement of the annual sales target of 84,000 units, Avatr needs to achieve sales of at least 16,500 units per month in the next two months.

Chen Zhuo previously revealed that Avatr aims to achieve monthly sales of 20,000 units in December this year, supported by multiple models, including the extended-range version of Avatr 12 and the extended-range version of Avatr 11. The extended-range technology route has become a key "trump card" for Avatr to achieve its annual sales target.

It is worth mentioning that in August this year, Avatr announced that it would officially invest in Huawei's subsidiary, Shenzhen Yinwang Intelligent Technology Co., Ltd., with a 10% stake and a transaction amount of 11.5 billion yuan. On October 16, Avatr completed the first payment of 2.3 billion yuan to Huawei using its own funds. In the capital market, such related investments help enhance Avatr's valuation.

Whether extended-range models can help Avatr successfully achieve its annual sales target this year remains to be seen. With a clear roadmap to achieve break-even next year and sprint towards an IPO in 2026, Avatr's next steps are evident. Only by achieving these goals can it lead Changan Group to fulfill its grand vision of brand upgrading.