In recent years, the field of new energy vehicles has been in turmoil, with frequent changes in the direction of capital markets. Over the past month, JAC Motor has risen by 66% cumulatively, with a market value exceeding 100 billion yuan. The "catalyst" for this surge was the news revealed by Yu Chengdong: the new model "Zunjie" jointly developed by Huawei Intelligence and JAC Motor will be launched in the spring of next year. This news has inevitably reminded the market of Thalys' "turnaround" with the support of AITO.

However, we need to calmly analyze whether such expectations are overly optimistic. Although Zunjie relies on Huawei, there are still many variables as to whether it can replicate Thalys' miracle. The nature of the automotive industry is long-cycle and heavy investment, and high growth requires solid R&D and supply chain capabilities as support. Additionally, market trends often come with overheating bubbles. As investment master Howard Marks said, "In investing, optimism is a luxury, and caution is the way to survive."

1. Does JAC Motor have a chance in its big bet with Huawei?

JAC Motor is in a "contradictory state." Fundamentally, it is hard to be optimistic about this company. In the first three quarters of this year, JAC Motor achieved operating revenue of 32.271 billion yuan, a year-on-year decrease of 5.02%, with a non-recurring net profit loss of 231 million yuan. Looking back at longer-term data, such performance is not accidental: from 2017 to 2023, JAC Motor's non-recurring net profit has consistently been in the red, which has become a "routine."

During the years of losses, JAC Motor mainly relied on government subsidies to "stay alive." Data shows that from 2021 to 2023, the amount of government subsidies included in JAC Motor's current profit and loss was 2.005 billion yuan, 1.205 billion yuan, and 1.341 billion yuan, respectively, accounting for more than 70% of the company's loss amount. It can be said that JAC Motor's ability to "survive" on its financial statements relies more on external transfusions rather than its own hematopoiesis (internal growth).

Nevertheless, a company with fundamental issues that "frequently raise red flags" has repeatedly achieved excellent results in the capital market. Over the past month, JAC Motor's share price has risen by 66% cumulatively, with a market value exceeding 100 billion yuan, even surpassing that of the established automaker Guangzhou Automobile Group. What ignited the market's expectations for JAC Motor?

The answer points to a key event. On October 17, Huawei executive Yu Chengdong revealed that the new model "Zunjie," jointly launched by Huawei Select and JAC Motor, will officially go on sale in the spring of next year. This news undoubtedly served as a "catalyst" for JAC Motor's soaring share price. More importantly, this event reminded investors of Thalys' comeback.

Before Huawei chose to cooperate with Thalys, Thalys' fate was also precarious. In 2022, Thalys suffered a loss of up to 5.2 billion yuan, with a single-year loss even exceeding the total losses of JAC Motor over the past three years. However, relying solely on the AITO series, Thalys quickly turned the tide. From January to September this year, Thalys' new energy vehicle sales (M5/M7/M9, etc.) totaled 316,713 units, a year-on-year increase of 364%.

The explosion in sales not only led to a surge in revenue but also completely changed Thalys' profitability. In the first three quarters of this year, Thalys' revenue increased by 539.2% year-on-year, and its net profit increased by 224.8% year-on-year. This series of impressive data directly drove a revaluation of Thalys' value in the capital market, with its share price surging fourfold in the past year and a half, outpacing even traditional automaker BYD and multiple new-energy automakers in growth rate.

Now, the upcoming "Zunjie" has given the market new expectations for JAC Motor. Investors hope that this model can become JAC Motor's "AITO" and replicate Thalys' path to success. However, behind the optimism lie many questions:

First, does JAC Motor have the capability to support Zunjie's supply chain and manufacturing system? Compared to Thalys, JAC Motor's brand premium ability and market appeal are weaker. Secondly, Huawei's cooperation experience with Thalys may not necessarily be directly replicable on JAC Motor. Success often has its unique timing and market environment, and whether JAC Motor can achieve a turnaround with Zunjie still needs time to verify.

Market speculation is often accompanied by risks. For investors, rational judgment and risk management are the keys to navigating market trends. As capital chases the next "Thalys," it is perhaps more important to remember: not every "fish" can leap over the Dragon Gate.

2. Why is it difficult for Zunjie to replicate AITO's success?

Thalys' rise is a miracle in the new energy vehicle industry. With the sales explosion of AITO and the boost from the robot concept, the market value of this once near-bankrupt company soared to second place, trailing only BYD and competing with Li Auto for the second position in the industry. However, upon closer examination of Thalys' success model, it is not difficult to find that the core supporting its value is the rapid growth in sales rather than "macro narratives" such as the robot concept.

This also means that for JAC Motor, whether it can become the "next Thalys" hinges on whether Zunjie can achieve similar market performance to AITO. However, based on the information currently available, it is almost hopeless for Zunjie to replicate AITO's success.

AITO's success is inseparable from its strong sales performance. In the first 10 months of this year, AITO's cumulative sales reached 353,000 units, second only to Li Auto's 393,000 units and far ahead of NIO's 170,000 units and XPeng's 122,000 units. Nowadays, AITO has become Thalys' core model, accounting for over 95% of its total sales.

In contrast, Zunjie's market potential appears limited. Its first model is positioned as a high-performance vehicle priced at over 1 million yuan, destined not to sell in large volumes like AITO. Data shows that the domestic market share for cars priced at over 1 million yuan only accounts for 1% of the overall market. Even the "sales champion" in this market, the Mercedes-Benz S-Class, only sells a little over a thousand units per month. This means that Zunjie's monthly sales ceiling is likely around a thousand units, contributing less than 3% to JAC Motor's overall sales.

In addition to limited sales, Zunjie also faces challenges in competitiveness in the million-yuan luxury car market. In this segment, consumers' purchasing decisions often prioritize brand power and identity. In other words, the brand aura of luxury cars is the key factor that high-end consumers are willing to pay for. However, JAC Motor's brand tone obviously lacks sufficient appeal, making it difficult to tap into this high-end market.

Reviewing the performance of new energy automakers in the high-end market also provides insight. BYD's million-yuan luxury car brand "AITO" achieved monthly sales of over a thousand units shortly after its launch but saw its sales plummet to only 282 units in October. This case once again confirms the embarrassing situation of new energy luxury cars, which start high but then decline.

Of course, as Zunjie's partner, Huawei's brand influence may bring a certain incremental effect to Zunjie. AITO's sales explosion is inseparable from the support of Huawei fans. However, in the million-yuan market, the effect of the Huawei aura may be greatly diminished. On the one hand, the luxury car market has limited capacity; on the other hand, high-end consumers' expectations for brands far exceed the scope of technical performance or fan sentiment.

If Zunjie wants to improve its market performance, relying solely on the Huawei aura or the limited demand in the luxury car market is clearly insufficient. A more practical strategy might be to expand downward by launching more affordable models with a broader positioning, driving an overall value revaluation through increased sales. This can not only cover a larger consumer base but also align more closely with JAC Motor's brand DNA.

3. Why must Zunjie expand downward?

'The higher you climb, the harder you fall.' In the automotive market, the glory of luxury brands is often accompanied by enormous survival pressure.

Yu Chengdong once boldly declared that Zunjie will "far surpass Maybach and Rolls-Royce Phantom" and comprehensively outperform these top luxury cars in terms of luxury and comfort. Whether this "big-mouthed" marketing is exaggerated aside, this positioning does clarify Zunjie's goal: to target Maybach's market segment. However, from both a historical and realistic perspective, such a positioning is full of challenges.

Maybach's development provides important reference significance for Zunjie. As an independent luxury car brand, Maybach attempted to gain a foothold in the market with a top-tier luxury positioning, but high R&D costs and extremely limited market demand eventually led to its bankruptcy. It was only after being acquired by Mercedes-Benz that Maybach was able to "come back to life" and share R&D and manufacturing costs through integration into Mercedes-Benz's production system.

Maybach is not an exception. Rolls-Royce has long been owned by BMW, while Bentley is controlled by the Volkswagen Group. This trend indicates that super luxury car brands find it difficult to operate independently, mainly because their limited market size cannot cover the high costs of model iterations. Incorporating luxury cars into the production systems of mass automakers and sharing platforms and costs can achieve sustained profitability.

For Zunjie, if it focuses solely on million-yuan models, its market capacity is destined to be difficult to support its operating costs. Data shows that domestic luxury cars priced at over 1 million yuan account for only 1% of overall car sales. Even the "sales champion" in this segment, the Mercedes-Benz S-Class, only sells a little over a thousand units per month. This means that if Zunjie does not expand downward, its business logic may be difficult to sustain.

It is worth noting that Zunjie's product planning is not solely positioned in the ultra-luxury market. In the future, Zunjie also plans to launch a series of high-end sedans, SUVs, and MPVs, and may further reduce prices to cover a larger market space. From a business strategy perspective, this direction is clearly more pragmatic, but "sinking" does not equate to success.

The current performance of Huawei Select models serves as a wake-up call for Zunjie. Among Huawei's four "Jie" series models, only AITO has achieved true success. As of now, AITO's sales account for over 90% of HarmonyOS Intelligent Auto Ecosystem sales. In contrast, other models like Zhijie S7 and Xiangjie S9 have performed unsatisfactorily. The mediocre performance of these models shows that even with Huawei's technological ecosystem, market performance may not reach AITO's heights.

Why is it difficult for other "Jie" models to replicate AITO's success?

First, market positioning is the core issue. AITO M9 is positioned in the 500,000-yuan SUV market, a segment with virtually no competition from new forces. Therefore, AITO could quickly capture the untapped market with Huawei's brand appeal. However, Zhijie and Xiangjie are different. Their prices highly overlap with those of new forces like NIO and XPeng, leading to intense competition. In the absence of significantly superior performance, Huawei Select models also face "cooperation friction costs." The joint development model between automakers and Huawei prolongs the development cycle and raises production costs, thereby weakening overall cost-effectiveness.

In this environment, the launch of Zunjie is more like a big bet. Relying solely on Huawei's brand aura and high-end positioning, it may be difficult to ensure a sales explosion. As Huawei's failures with other "Jie" series models have shown, the Smart Selection model does not guarantee a "win." Zunjie's future must rely on the improvement of its product system and a broader market layout.

For JAC Motor and Zunjie, winning market validation in the short term is far more important than shouting about "surpassing Maybach." By expanding downward, Zunjie may find market opportunities on a larger scale, but whether it can succeed ultimately requires more patience and market feedback. Currently, Zunjie may not lack ambition, but what it needs most is a practical business logic and solid market execution.