Without the "Windfire Wheels," can Nezha still "ride the waves" in the automotive sea?

By She Zongming

Has the year's first "crash" already arrived?

Following Geyue, is it now Nezha's turn?

Can Nezha still "ride the waves" in the automotive sea?

...

After Nezha Automobile's official website went down, too many people hastily penned its obituary.

Many netizens were also prepared to add the "demon child's" name to the joke: "I drive a HiPhi, my wife drives a Jiyue, and my dad drives a Zotye. They all laugh at me, saying we're all from the same family, but we're fighting among ourselves."

But Nezha Automobile clearly doesn't intend to accept the script written for it by many.

On the afternoon of January 6, Nezha Automobile officially stated that the official website had been restored to normal, and screenshots had been taken as evidence against the rumors of bankruptcy circulating online.

"Debunking rumors" is also self-evident: I'm still alive.

For many media outlets, it's easy to change the title from a death sentence to an assertion that "time is running out for XXX."

But for Nezha Automobile, to break through its predicament, it needs the rebellious spirit of Nezha himself.

01

"Nezha Automobile's equity frozen for another 1 billion yuan"

"No one is receiving customers at Nezha Automobile dealerships"

After Nezha Automobile's official website became inaccessible for a time, the hot search topics related to Nezha Automobile all had a gloomy tone.

Good news always comes slowly, while bad news always comes in pairs.

It's not that people don't hesitate to use the worst intentions to divine Nezha Automobile's fate; it's just that Nezha Automobile fits too well into the "endangered species" model.

As everyone knows, the elimination race among new energy vehicles is in full swing right now.

When the elimination race becomes a topic of public conversation, it inevitably leads to a guessing game of "who will be next?"

The basis for public judgment often includes: whether the company has laid off a large number of employees, whether employees have been owed wages or social security contributions, and whether suppliers have resorted to public confrontations to demand payment...

After all, the prelude to an automaker's exit is often fixed: a crisis in the capital chain leads to difficulties in paying employee salaries, which leads to suppliers concentrating on debt collection, which leads to rumors of bankruptcy intensifying, which leads to the official website being inaccessible...

Nezha Automobile hit almost all of these points.

▲Nezha Automobile's official website experienced an anomaly for a time but has since been restored to normal.

From February last year to the present, Nezha Automobile has been beset by negative news such as delivery difficulties, delayed year-end bonuses, unpaid wages, and debt collection from multiple suppliers.

The red-clad uncle transformed into a white knight to save the day, nourishing Nezha Automobile with traffic, which did extend its life to some extent.

However, setbacks on the IPO path and the dismissal of former CEO Zhang Yong both indicate that the Band-Aid handed out by Zhou Hongyi is also difficult to stop the bleeding of Nezha Automobile.

Nezha Automobile's founder Fang Yunzhou was ready to embark on a "second entrepreneurial journey," already pointing east with his whip.

However, Jiyue Automobile's flash crash demonstrated how quickly a new energy automaker can go from being alive to being in the ICU, effectively blocking Nezha Automobile's path to rebirth.

Many people wanted to believe in Nezha Automobile again, but a "flash crash warning" rang in their ears.

And the "inopportune" anomaly on the official website only fueled those negative imaginings.

02

Entrepreneurship inevitably involves trial and error.

To date, regardless of success or failure, almost every new energy automaker has accumulated a thick collection of wrong answers.

But public opinion always follows the historical view of "the victors write the history, and the vanquished are forgotten".

If you succeed, all problems are not problems, but stepping stones.

If you fail, many will use an empiricist rearview mirror to scrutinize every detail of your past.

Nezha Automobile is no exception to this rule.

After falling into a crisis, many will review the various problems of Nezha Automobile.

For example, Nezha Automobile has failed to establish a differentiated mindset.

Although it started around the same time as NIO, XPeng, and Li Auto, it hasn't left a unique mindset: When NIO is mentioned, many think of its service (including battery swapping); when XPeng is mentioned, many think of its intelligent driving; when Li Auto is mentioned, many think of its extended-range route... Even when Zero Run is mentioned, many think of it as a "half-price Li Auto".

But when Nezha Automobile is mentioned, what comes to mind? Zhou Hongyi?

For example, Nezha Automobile's market positioning is unreasonable.

Taking the "rural surrounding the city" approach, it relied on B-end travel platforms and the online car-hailing industry to open up the market during its initial stage, obscuring branding issues.

It's easy for high-end brands to dive down; it's hard for low-end brands to soar up. When BYD and others enter the 100,000 yuan price range, Nezha Automobile's past comfort zone turns into a meat grinder of a price war, leaving it with no way to fight back.

For example, Nezha Automobile's product line planning is chaotic.

It has pure electric vehicles, extended-range vehicles, sedans, SUVs, and even sports cars... But which one has become a representative of its category? None.

It's worth noting that in May 2024, one month after its launch, the Nezha L surpassed 30,000 cumulative orders. However, instead of capitalizing on this momentum, Nezha Automobile chose to launch another mid-to-large SUV model, the Nezha S Shooting Brake, which diverted its focus. As a result, both models became heavily affected by delayed deliveries, sparking outrage from customers who had placed deposits.

With its short strengths and many weaknesses, could it avoid a crisis?

For example, Nezha Automobile's marketing efforts are insufficient.

In March last year, when Zhang Yong brought Zhou Hongyi to a construction site for a live stream, Zhou Hongyi criticized Nezha Automobile for having problems from marketing to product planning, not understanding anything, and "always being self-indulgent".

And so on, the list goes on.

03

Do these problems really exist?

Indeed, some of them do.

Even Zhang Yong reflected early last year, "There was no good connection between the switch from old to new products, and the rhythm was chaotic; the pricing of new products was too high when they were launched, and although adjustments were made in the second half of the year, the first-mover advantage was lost; product lines with losses had their production volumes significantly reduced; the communication methods were outdated, good things couldn't be conveyed, and the marketing headquarters was centralized with weak management."

When an automaker falls into difficulty, problems can basically be found in all aspects such as products, technology, marketing, and capital chains.

Nezha Automobile is no exception. Looking back, it's a chain of problems.

But it would be inappropriate to say that its management didn't realize these problems.

A closer look reveals that Nezha Automobile has also tried to solve its difficulties.

However, as scholar Wang Dongyue said, every process of humans solving problems is also a step in accumulating bigger problems.

Take the issue of positioning, for example. Nezha Automobile launched the sedan Nezha S (priced at 199,800-338,800 yuan) in July last year to "reach for the high end," aiming to knock on the door of the high-end market and avoid being trapped in the "outside the Fifth Ring Road" market.

▲For automakers' attempts to "reach for the high end," public opinion is accustomed to "conclusion-oriented" judgments.

But "reaching for the high end" is very, very difficult.

If you succeed, you're Xiaomi.

If you fail, you become a laughingstock.

Nezha Automobile's attempt to reach for the high end ultimately didn't become the "one in a hundred" success story.

Regarding the issue of marketing, Zhang Yong also tried to establish an entrepreneur IP.

But there are many Zhou Hongyis between him and marketing god Lei Jun.

Many of these problems are not due to "the onlooker sees more clearly than the player," but rather "the player also sees clearly, but their abilities fall short".

There are many reasons why abilities fall short.

There may be insufficient strength or unsupported conditions.

04

Having problems in and of itself is not a problem. Failing after having problems is the biggest problem.

If Nezha Automobile succeeds, those bugs will be medals of honor.

But reality doesn't allow for so many "ifs".

Upon closer inspection, some of the pitfalls Nezha Automobile has stepped into have also been stepped into by other new energy automakers.

But the timing of stepping into these pitfalls is crucial.

Over the years, new energy automakers have never lacked "darkest moments," and even strong players like Tesla, NIO, XPeng, and Li Auto are no exception.

NIO was on the brink in 2019, and XPeng was on the brink in 2023.

But they ultimately crossed the line between life and death.

It's not to say that Nezha Automobile, standing on the brink, has the same strength as NIO, XPeng, and Li Auto. It's just that if time were pushed back a few years, Nezha would have had more room for maneuver.

A few years ago, the qualifying rounds for new energy vehicles hadn't reached their cruelest stage yet.

Even if Nezha Automobile made mistakes, it could start over from scratch.

At that time, what was important was not making mistakes, but the efficiency of correcting them and the ability to do so. More introspection and maintaining strategic focus might have led to a miraculous recovery.

A few years ago, the financing environment for new energy vehicles was also not like it is now.

At that time, as an emerging sector, new energy vehicles could always attract VC funding to alleviate the capital shortage.

"Money is not a problem; the problem is not having money," but there was always hot money willing to help new energy automakers solve their problems.

But times have changed, and the "golden period" is ultimately over.

The most direct impact is that the margin for error for new energy automakers in the overall environment has become smaller.

In the past, you could make ten mistakes and still stay in the game. Now, you might be out after just one or two mistakes.

He Xiaopeng previously said, "2024 is the first year of 'bloody' competition for Chinese automotive brands, the first year of the elimination race. In the next ten years, there will only be seven Chinese automotive brands left."

Against the background of the automotive industry's great escape combined with unfavorable external environmental factors, issues that may not have been fatal to automakers in the past, such as lack of funds, may now cause them to collapse suddenly.

According to media statistics, there were over 487 domestic new energy automakers in 2018. But by the end of 2023, only 40-plus were still operating normally.

New energy automakers that can survive into 2024 are already the cream of the crop.

But the great escape hasn't reached the point of calling "cut" yet.

▲Nezha Automobile needs to break through the siege.

At a dinner party in April 2020, Zhang Yong, then CEO of Nezha, joked to Li Bin, "NIO is in a tough spot, but at least it has a reputation. We've been in a tough spot all along, and no one knows about it."

Nezha Automobile is in a tough spot, but at least it was once in the second or third tier after NIO, XPeng, and Li Auto, and it did eventually win the title of the sales champion among new forces in 2022 (even though Nezha Automobile formed a large inventory of pre-registered vehicles to boost sales at the time, laying the groundwork for future problems). What about automakers that have never had much presence from start to finish?

From the perspective of the history of the automotive industry, the bloody great escape is inevitable for capacity clearance.

But from the perspective of automakers that can't escape, this game is ultimately too cruel.

The phrase "industry reshuffle" is simple to say, but the resulting changes will ultimately have to be paid for by someone, including automakers' employees and suppliers.

They are easily among those swallowed up by the dust storm.

It's quite disheartening to think about it. At least, I can't say "I told you so" with schadenfreude.

05

Right now, Nezha Automobile has lost its "Windfire Wheels".

Some are waiting to mourn it as a "tear of the times".

But it's still trying to break through.

In an internal letter in December 2024, Fang Yunzhou stated that Nezha Automobile's future strategy would focus on its business and expand into overseas markets. It would compete moderately domestically while looking abroad, striving to create a few globally popular models. "In the next 2-3 years, we aim to achieve half of our sales domestically and half overseas, turn our overall gross margin positive by 2025, and achieve overall company profitability by 2026."

It's clear that Nezha Automobile doesn't want to quietly enter the book of life and death.

From the standpoint of hoping the company will survive, I hope it can make it through - of course, it will have to face many challenges to break through.

In the movie "Nezha: Birth of the Demon Child," Nezha says, "My fate is in my own hands, not in the hands of heaven."

Nezha Automobile strives to take charge of its own destiny.

However, a voice echoes in its mind, reminding it, "One must be mindful of the current times."