He Xiaopeng’s second dream

From pathfinder to chaser.

Among the new car-making forces, Xiaopeng is the latest to land in US stocks. However, it has been listed on the New York Stock Exchange for less than a year, and it has completed its “dual primary listing.”

On July 7th, Xiaopeng Motors landed on the Hong Kong Stock Exchange, opened up 1.82%, the issue price was 165 Hong Kong dollars, the highest stock price was 168 Hong Kong dollars, and the total market value was 284.2 billion Hong Kong dollars. Xiaopeng rushed to run “the first stock of smart electric vehicles in Hong Kong stocks”, which is likely to set off a trend of new car manufacturers returning to Hong Kong for listing.

Xiaopeng Motors He Xiaopeng, with his second dream, continued to dive into the deep water of the new car.

On June 11, 2014, Alibaba acquired UC for US$4.35 billion in cash and equity, setting a record for mergers and acquisitions in the history of domestic mobile Internet. After becoming a wholly-owned subsidiary of Ali, UC was merged into the Ali system.

A full decade after the founder of UC to achieve financial freedom Xiaopeng, with Yu Yongfu together to join Ali, this year, Ma is China’s richest man.

After joining Alibaba, He Xiaopeng served as the CEO of UC. A year later he became the president of Alibaba’s mobile business group. Later he was transferred to the chairman of Alibaba Games. In 2017, he became president of Tudou.com.

But He Xiaopeng’s dream of entrepreneurship is still buried deep in his heart , waiting to be activated. Perhaps he hadn’t noticed it himself, the seed had been planted as early as when he got out of the bus alone.

In 1999, South China University of Technology ushered in the graduation season. He Xiaopeng and two other classmates got on a bus and followed their instructors to interviews with different companies, including two state-owned enterprises and one private enterprise.

The bus stopped in front of this private company named ” AsiaInfo Technology”, and only He Xiaopeng got out of the car. In that era, few people were willing to give up the iron rice bowl of state-owned enterprises. But He Xiaopeng’s thinking is very different. His wish is to achieve financial freedom before the age of 40 and then retire.

No one can predict the future, and the way destiny favors the lucky is full of drama.

Tian Shuoning, the founder of AsiaInfo Technology, was later the well-known “Mr. Internet”, and AsiaInfo was the “architect of the Chinese Internet”. However, this is something to be said.

After graduation, He Xiaopeng formally entered the AsiaInfo Guangzhou office and started as a software test engineer.

While working at AsiaInfo, He Xiaopeng met fellow senior brother Liang Jie. Liang Jie has strong technical strength and is good at writing code. The two of them worked in the same R&D team and worked very well together to jointly develop a large-capacity mail system, which became the company’s flagship product.

In 2000, AsiaInfo was listed on the Nasdaq. He Xiaopeng has been employed for a full year and has 1,500 shares. At a listed stock price of US$20, it is equivalent to US$30,000. When his leader gave him the equity agreement, he said, “As soon as you come to the company, you will have a house.”

But in 2004, He Xiaopeng felt that he could not achieve financial freedom with thousands of dollars a month, so he resigned and started a business, following the emerging trend of the mobile Internet, and co-founded UC with Liang Jie.

At that time, China’s Internet industry had just entered its first decade. He Xiaopeng and Liang Jie were the first to use mobile phones to “surf the Internet”, and they were the first to discover the entrepreneurial opportunities of the mobile Internet.

In the early days of its business, UC developed two products: UC Mail and UC Web. UC stands for You Can, which means “you can send and receive emails and access the Internet (anytime).”

He Xiaopeng's second dream

However, limited by the popularity of mobile Internet and hardware devices, users have not yet developed the habit of sending and receiving emails with mobile phones, but this product has attracted Ding Lei’s attention. Ding Lei also started as a mailbox and is very sensitive to similar products on the market.

Coincidentally, Chen Leihua, one of the developers of NetEase Mail, was a classmate of He Xiaopeng. He matched the bridge and the two met.

At the wine table, Ding Lei heard that the UC team could not even rent an office. First, he borrowed 800,000 yuan, and then lent his office to He Xiaopeng. This office, once again, why Xiaopeng opened the door of luck.

The UC team moved into Ding Lei’s office, and next door was Li Xueling, the editor-in-chief of NetEase. Li Xueling later resigned to start a business and was the founder of YY. In 2006, Li Xueling introduced He Xiaopeng to Yu Yongfu, the vice president of Legend Capital (now Legend Capital). Yu Yongfu wanted to invest in UC very much, but the project was not approved because of one vote.

Yu Yongfu was not reconciled. He had been in UC for half a year and was very optimistic about this project. So, on the night when the investment decision-making meeting ended, Yu Yongfu met Lei Jun in a bar on the streets of Beijing, and Lei Jun only said one sentence after listening: “You go to UC, and I will vote.”

As a result, Yu Yongfu resigned from the position of vice president of Lenovo Investment, became chairman and CEO of UC, and quickly completed a 4 million yuan financing for UC, of ​​which 2 million was given by Lei Jun.

He Xiaopeng's second dream

Later, after Lei Jun left Jinshan, he also served as chairman of UC. He is a fellow of He Xiaopeng’s Hubei province and an investor in He Xiaopeng’s two ventures.

Time goes back to June 13, 2014. The day after UC was merged into Ali, the butterflies on the other side of the ocean flapped their wings. Musk announced that Tesla would adopt an “open source model”. Subsequently, the new car building force “Wei Xiao” “Li” was established one after another.

In the same year, Musk came to China and delivered the first batch of Tesla cars to domestic users. He Xiaopeng was the first batch of users. He has mentioned more than once that after sitting on Tesla, “The first feeling is that the world is about to change, and the auto industry is changing.”

He Xiaopeng mentioned in a self-report, “After Ali integrated UC in 2014, I proposed to build a car in the Ali system, and was ruthlessly rejected. I like cars and believe in the future of smart cars, but I may face more when building cars by myself. Responsibility, anxiety and pressure may be better as an investor.”

At that time, 37-year-old He Xiaopeng completed his goal of financial freedom three years in advance, but his first thought was not about retirement, but the pain, emptiness and confusion after financial freedom.

As a result, He Xiaopeng began to initiate and promote car-building projects as an investor.

Among this car-building team is Xia Heng, who was born in automotive engineering at Tsinghua University. He joined GAC Trumpchi when it was first established and participated in the entire process of Trumpchi’s birth.

Xia Heng was very excited about the idea of ​​building a “China Tesla”, so he resolutely left GAC.

Before founding Xiaopeng, Xia Heng was the head of the control section of the GAC New Energy Center, where he was responsible for the development of control systems for a variety of new energy vehicles and smart cars.

He Tao, the other founder of Xiaopeng Motors, is Xia Heng’s younger brother and colleague. After graduating in 2010, he joined the Guangzhou Automobile Research Institute and engaged in the research and development of new energy vehicle control systems. Due to his strong technical ability, He Tao then coordinated the advancement of GAC’s unmanned driving project as a project manager.

He Xiaopeng's second dream

(He Tao, He Xiaopeng, Xia Heng)

After the establishment of the start-up team of Xiaopeng Motors, it was still a phone call away from when He Xiaopeng changed from an investor to a founder.

On February 16, 2017, He Xiaopeng’s child was born. Just a few minutes after he held it, he received a call. This call came from being ridiculed by him as the “bad guy who prompted me to start a business”-Fu Jixun, managing partner of GGV Jiyuan Capital.

“The upgrading of the manufacturing industry and the upgrading of the travel industry have become the general trend. You have to come out as soon as possible. If you don’t come out again, this Windows (window period) will be gone.”

According to He Xiaopeng’s memories, since forming the car team as an investor, he has always had the idea of ​​starting a business and building a car again. Until the moment of receiving the call, a strong emotion suddenly developed in his heart: to do something to prove Show it to my son.

This call officially activated He Xiaopeng’s entrepreneurial dream.

Six months later, on UC’s 13th birthday, He Xiaopeng officially left Ali. Yu Yongfu, then chairman and CEO of Ali Culture and Entertainment Group, said in an internal letter that He Xiaopeng would officially “retire” and “start his own new journey of dreaming.”

On that day, He Xiaopeng sent a circle of friends: a cycle of entrepreneurship, bitter, sweet and salty, and still a teenager when he returned.

Before He Xiaopeng officially joined, Xiaopeng Motors’ car-building plan has begun to advance, including obtaining Pre-A round of financing and 2.2 billion yuan of A round of financing, releasing the beta version of the first mass-produced car, and setting up a tens of billions of production base in the urban area of ​​Zhaoqing , Obtain sales qualifications, etc. The joining of He Xiaopeng has brought entrepreneurial experience and a broad network of contacts. Within one year of joining, Xiaopeng Motors completed a 2 billion financing, with shareholders including investment giants such as Ali, Foxconn , and IDG. At the same time, He Xiaopeng also recruited a number of technical executives to supplement the team’s talents. On October 12, 2017, more than two months after He Xiaopeng joined Xiaopeng Motors, Xiaopeng Motors’ first mass-produced model officially rolled off the assembly line, becoming the first to achieve mass production among new car manufacturers. On January 10, 2018, Xiaopeng Motors G3 made its world premiere at the CES International Consumer Electronics Show in the United States. In China, Xiaopeng Motors G3 appeared at the booth of the Geek Park Innovation Festival. In the same month, Xiaopeng Motors delivered the first batch of 39 new cars. In March 2018, Xiaopeng Motors 1.0 mass-produced model was awarded the first new energy license plate for the production of vehicles by the new force of Chinese car manufacturers.

However, what followed was Xiaopeng’s slowdown. The first batch of Xiaopeng Motors’ products did not go on sale, but to continue driving tests for employees in different scenarios. He Xiaopeng’s attitude is very resolute: “Consumers should never be our first users.” Until December 12, 2018, Xiaopeng Motors announced the official launch of G3 and started delivery at the same time. The new cars are divided into G3 520 and G3 400. Model, after comprehensive subsidies, the national unified selling price range is 143,800 to 196,800 yuan, and more than 10,000 vehicles were sold in the first batch. But this time, Xiao-Peng car on the delivery level has been Wei car to catch up. Entering 2019, Xiaopeng Motors’ development plan mentioned that 200 super charging stations will be built in the front end, an increase of 50%; the mid-range Xiaopeng Motors will expand the company to 5,000 employees, an increase of 40%; the back end Zhaoqing The factory will start construction and deliver 40,000 new cars, an increase of more than 7563%. As a result, Xiaopeng Motors began to build the VIE structure, and then the news of launching an IPO in the United States came out, but the drastic changes in the new energy market were caught off guard. In March 2019, relevant departments issued the “Notice on Further Improving the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles”. By the end of June, the state subsidy for new energy vehicles will be halved and the land subsidy will disappear directly.

Subsequently, the new energy vehicle market encountered a cold for the first time.

“At present, Xiaopeng Motors has no plan for the time and location of the IPO.” He Xiaopeng announced on March 28. In addition to market fluctuations and IPOs that have not yet been included in the plan, Xiaopeng Motors has also begun to encounter users’ doubts. In July 2019, Xiaopeng Motors launched the G3 2020 model, but it quickly caused strong dissatisfaction from the old owners of Xiaopeng Motors. Compared with the 2019 G3, the new model not only has improved battery life, but also has a lower price than the old model.

On July 13, Xiaopeng Motors encountered the biggest crisis. A large wave of car owners ran to the headquarters of Xiaopeng Motors and service centers in various cities to accuse Xiaopeng Motors of suspicion of consumer fraud.

In desperation, Xiaopeng Motors gave a compensation plan: When an old car owner purchases any other model of Xiaopeng Motors within 3 years, he will enjoy an extra 10,000 yuan exclusive on the basis of all the rights and benefits of the current promotion policy for the new car to be purchased. Subsidy rights.

More than a month later, He Xiaopeng sighed in an interview with the media, “In the automotive industry, besides physical and mental fatigue, there is also a heart fatigue.” In his words, he entered the “hardship zone” of the automobile circle from the “comfort zone” of the Internet circle.

In fact, from 2018 to mid-2020, He Xiaopeng repeatedly expressed negative emotions.

He used to be full of pain for delivery: “I used to think that R&D and manufacturing were difficult, and delivery was not difficult, but now I find that the difficulty of delivery is much higher than that of building hundreds of units. In order to deliver, there needs to be a reservation and sales link. To build a huge CRM (customer relationship management system), dozens of information systems. In order to sell, we need to open more than 40 companies across the country, because every place has to be delivered and invoices. We are in every place There must be a charging station, how to do after-sales, how to do maintenance… I think the current pain will last for two years, until 2020.”

By 2020, the pain will continue. In June of this year, He Xiaopeng posted a group photo on Weibo . In the photo, He Xiaopeng, Li Bin, and Li Xiang are sitting next to each other. Li Bin’s hands are intimately placed on the shoulders of the two nearby. He Xiaopeng wrote: “Three hardships, remembering hard work and thinking about change…”

He Xiaopeng's second dream

Fortunately, “hardship” will not bring down an industry, especially new energy vehicles, which are destined to rise.

In July 2020, Xiaopeng Motors released the second production model P7 smart coupe. The P7 is compliant with the domestically produced Tesla Model 3, with a cruising range of 706 kilometers, and the price is about 230,000 yuan after subsidies.

The biggest “difficulty” for the new car-building forces is to build their own factories, but the Zhaoqing factory, which invested 2 billion in construction at the time, has begun to reap results, and the P7 is produced by the Zhaoqing factory.

The monthly delivery volume urges He Xiaopeng to keep moving forward, but in this battlefield where “burning money” has become a consensus, financing issues have been plagued by various players in the circle.

Due to the demand for mass production, the capital requirements for car building are extremely high, and 20 billion is only the threshold for entry. He Xiaopeng’s own investment of 300 million US dollars is like a drizzle. Xiaopeng Motors has accumulated more than 18 billion yuan in 10 rounds of financing. In addition to old friends Alibaba and Xiaomi Group, investors also have Sequoia, Hillhouse, Foxconn and IDG capital.

At this time, Weilai Automobile has become the leader among the three carmakers. It was listed on the New York Stock Exchange on September 12, 2018 and raised US$1 billion; Li Xiang’s ideal car followed closely behind in 2020. It was listed on the Nasdaq in the United States on July 30, 2007 and raised US$1.05 billion.

On August 27, Xiaopeng Motors landed on the New York Stock Exchange and raised US$1.5 billion.

Xiaopeng Motors will soon be listed on the Hong Kong stock market and complete the “dual primary listing”.

Because it is less than one year after the listing on the New York Stock Exchange, unlike a group of Chinese concept stocks that went to Hong Kong for secondary listings such as JD.com , Baidu and Bilibili , Xiaopeng Motors could not satisfy the Hong Kong Stock Exchange’s “two fiscal years”. The only way to go to Hong Kong to raise funds is to choose the “dual primary market” method.

At the same time, Weilai and Ideal also revealed their willingness to go public in Hong Kong.

The urgent need for listing reflects the development status of the new energy automobile industry: the desire for funds and the recognition of the capital market complement each other; and the appointment to return to Hong Kong for listing also reflects the quiet change in the core market of new energy vehicles from the side.

In the capital market, the imagination of the new energy automobile industry continues to nourish the stock prices of new forces.

Tesla has become the car company with the highest market value, and Wei Xiaoli’s market value has surpassed many century-old car companies. However, from the perspective of sales volume, the gap between the two parties is still large.

Just entering July this year, new car manufacturers can’t wait to show their June sales report card. Among them, Weilai continued to lead with 8,083 vehicles delivered, ideally ranked second with 7713 vehicles, and Xiaopeng delivered 6,565 vehicles, ranking third.

Since 2021, the scale of the new energy automobile industry has been steadily expanding. Weilai, which has the highest delivery volume, is hitting the annual sales of 100,000 vehicles. Ideal and Xiaopeng have the opportunity to hit the annual sales of 80,000 vehicles.

However, monthly deliveries in thousands are still niche in the car market with millions of shipments. This is a limitation caused by production capacity and a room for expansion of imagination.

Thanks to the increase in shipments, Xiaopeng Motors’ revenue and gross profit have grown simultaneously, and it has begun to narrow the distance with its peers. According to its prospectus, Xiaopeng Motors achieved a total revenue of 2.951 billion yuan in the first quarter of 2021, an increase of 616.1% year-on-year from 412 million yuan in 2020. The growth rate exceeds 481.8% of Weilai Automobile and 319.8% of Ideal Automobile. However, during the same period, Weilai Automobile’s revenue was 7.98 billion yuan, and Ideal Auto’s revenue was 3.58 billion yuan.

In addition, Xiaopeng Motors has begun to enter the capacity ramp-up phase. The prospectus shows that the utilization rate of Xiaopeng’s production line is close to 40%. The capacity utilization rate of the Haima plant has increased from 6.4% in 2018 to 40.6%, and the capacity utilization rate of the new plant in Zhaoqing has also reached 38.5%, which is close to that of Chinese passenger cars. 40% average capacity utilization rate.

However, Xiaopeng Motors still has not escaped its loss. Xiaopeng warned of risks in the prospectus. The company is still generating losses and negative operating cash flow. This situation may continue for some time.

The financial report shows that Xiaopeng has accumulated losses of over 7.8 billion yuan in the past three years. From January to March 2021, Xiaopeng’s net loss was 786.6 million yuan, a further increase from 649.8 million yuan in the same period last year. The main reason for the loss was the high investment in R&D expenses, marketing promotion and advertising expenses, of which R&D expenses reached 5.351 100 million yuan.

Among the three giants of new car-making forces, NIO takes the lead in brand positioning and service system, Ideal Automobile likes to tell the story of electric power anxiety behind the extended-range technology, and Xiaopeng Motor’s moat built for itself is “smart”.

In the prospectus, Xiaopeng Motors also stated that its most critical core competitiveness is intelligence, that is, all software and core hardware are independently developed. Unlike other OEMs, Xiaopeng steam car of independent design and development of a full-stack automated driving technologies and operating systems, and that is the first self-developed software autopilot and commercializing new applications repairer Power company.

Taking technology as the core is determined by the genes of the founding team of Xiaopeng Motors. In addition to the technical backgrounds of the two co-founders, there are nearly 40% of R&D positions. The prospectus mentioned that as of March 31, 2021, Xiaopeng Motors has a total of 6,132 employees worldwide, of which 39.8% are R&D positions, including three categories: automotive design and engineering, autonomous driving and intelligent operating systems.

After the “dual main listing”, in line with the endless stories of the new energy market, and the complete closed loop of R&D, design, production, and sales services achieved by self-built factories, funding is no longer the biggest problem.

The next hurdle lies in the self-made blood at the business model level, the intelligent R&D at the technical level, and the fierce invasion of mobile phone manufacturers.

“I welcome more people to come in. There are still some opportunities in the past five years. After 2025, it will be a transformation from the Spring and Autumn to the Warring States Period.” At the Shanghai Auto Show, He Xiaopeng once described the competition in the new energy vehicle market.

Lei Jun, why Xiaopeng solved his urgent need at the time, has already stood on the tuyere of a new car with tens of billions of dollars in hand. A cycle of ten years, the old and new stories alternately staged.

The serial entrepreneur He Xiaopeng, although he completed his dream of wealth and freedom three years in advance, he still made up his mind to enter the muddy waters of a new car. After being listed twice within a year, Xiaopeng Automobile’s identity has been converted between Pathfinder , Chaser and Leader.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/he-xiaopengs-second-dream/
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