The difficulty of Gaohe, the difficulty of the industry

Visual China.

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Although the overall volume is not as good as that of new power brands such as "Wei Xiaoli", with some achievements in the high-end field, Gaohe also has some fame in the domestic new energy circle.

Judging from the company's operation in the past, it is difficult for everyone to associate Gaohe with "bankruptcy".

In terms of sales, Gaohe, which focuses on high-end segments, has been outstanding in the field of pure electric vehicles of more than 500,000 yuan, beating traditional luxury brands such as Porsche; In the product line, Gaohe has a complete production line for cars and SUVs, and it has also dropped to the level of 300,000 yuan.

It is this contrast that tells us that China's automotive industry, especially the new energy vehicle industry, is in the process of fierce changes, the blue ocean has ended, the honeymoon period has passed, and all that remains is fierce competition, and there will be more car companies left behind.

A thousand words come together in one sentence: the shuffle has really begun. And how did Gaohe get to this point, which naturally has a certain reference significance for other car companies in the industry.

The fact that Gaohe Automobile has ended up in such a situation is not that it was wrong to choose the track of high-end new energy, but that the competitive environment has changed.

Founded in Shanghai in 2017 and officially delivered its first model, the Hiphi X, in 2020, BYD is still not the king of new energy in the streets, and the penetration rate of new energy vehicles in the Chinese market is only 54%, not to mention pure electric vehicles at the high-end price, even if it is a green car, there are not many products to choose from.

In such an environment, the high-end track of Gaohe has indeed brought differentiated competitivenessMoreover, the design of the Gaohe model is outstanding and bold, attracting attention, and has become a pure electric toy for many young people from wealthy families (rich second generation).

However, with the continuous improvement of the penetration rate of new energy vehicles, the number of companies that have launched high-end new energy vehicles and even pure electric vehicles is also increasing.

One of the most direct figures, enter keywords such as "more than 500,000" and "new energy" on a certain automobile portal platform, and you can find 76 models on sale.

If you prefer luxury brands, Mercedes-Benz, BMW, and Audi have all upgraded their new energy vehicles, which is not a good choice. If you recognize the new forces, in addition to Gaohe, Lotus can also provide eye-catching design, extreme performance, and more choices.

The strongest competitiveness of high-end new energy vehicles is probably still traditional car companies, BYD's Denza and Yangwang have both unprecedented brand recognition and excellent product strength, and Yangwang U8 has become a benchmark for domestic high-end new energy vehicles; Geely Automobile's ZEEKR has launched the ZEEKR 001 FR that pursues the ultimate performance, with a 000 acceleration of only 21 second, from the perspective of "pure electric big toy", it seems to bring more emotional value than Gaohe.

In general, the most prominent feature of Gaohe's products is the alternative styling design, especially the design on the doors, which has earned it the nickname of "door factory".However, when it comes to the core level of three electric and intelligent driving, the high merger has not left too much impression on consumers.

And we know that "design" is difficult to form a moat in such a rapidly iterating industry.

The core technology of new energy vehicles is also called the "three major parts", which are batteries, motors, and electronic controls. In order to pursue stronger product power, leading car companies are more inclined to self-research of core components or even global self-development, and the concept of "first-class business integration" in the era of traditional fuel vehicles has been subverted.

Ding Lei, the founder of Gaohe Automobile, has worked in SAIC for a period of time, perhaps because of his work experience in traditional car companies, he has not paid much attention to self-development.

According to public information, Gaohe's battery manufacturers are CATL and Xinwangda, but there are not many manufacturers who are willing to invest in self-developed batteries. As for motors, Gaohe generally cooperates with Bosch and Jingjin Motor, while the partners of electronic control are Bosch and Shanghai Electric Drive.

In the field of motor and electronic control, independent design, OEM production and even thorough self-research is the common practice of mainstream car companies, even the "new new force" Xiaomi also emphasizes that their motors are independently designed (production and manufacturing is to seek partners OEM), and the electronic control system will directly affect the car experience, most car companies will choose to self-develop.

Self-developed key components tend to have stronger performance to cope with changes in market competition, and Xiaomi says that the maximum efficiency of their self-developed SiC electronic control can reach 9985% efficiency, compared to 97% for the SiC electronic control provided by Bosch5%, which is ultimately reflected in the experience, there may be a range gap of about 10% for the same capacity battery pack.

As for the other core topic of "intelligent driving", the biggest problem on Gaohe's side is hindsight.

In September last year, I visited the headquarters of Gaohe and participated in the so-called "Science and Technology Day". During the event, the staff of Gaohe focused on introducing the research progress of their autonomous driving team, and said that they hope to launch the high-speed pilot service in the first half of 2024 and test the urban pilot by the end of 2024 at the earliest.

Objectively speaking, in September 2023, the high-speed elevated navigation function is not new, and Denza, which has been complained about by everyone as "slow", has at least been prepared to be launched in the road test, while Gaohe is still in research and development, and its progress is no longer half a star.

On the other hand, according to my observation, the team size of Gaohe at that time was probably less than 200 people, and it was not easy for a new energy vehicle company with poor technical reserves to make a team of 200 people to make an intelligent driving system with excellent performance.

In this way, the three-electric system is not leading, the intelligent driving system is not leading, and the core experience of Gaohe's models is not expensive, but the core experience of pure electric vehicles is not necessarily comparable to other low-cost mainstream brands, and the brand itself does not have market appeal, and the decline in sales is naturally inevitable.

The irony is that none of the problems mentioned above are the main reasons for crushing Gaohe, Gaohe has not continued in one breath, and the problem lies in capital operation.

It is a recognized fact that making cars is very expensive", industry insiders say that Xiaomi's "10 billion US dollars" is simply not enough to spend, and the new power brands Xiaopeng and Weilai are suffering from huge losses, such as the "king of new energy" BYD, its gross profit performance is not exciting.

New energy vehicle companies that sell 200,000 or 300,000 units a year are not having a good time, not to mention Gaohe, whose annual sales are less than 5,000 units. Like other new brands, the company relies mainly on external financing to maintain its operations despite poor sales performance, and if there is a problem with financing, it is likely to lead to corporate shock.

The outside world has always believed that the huge financing from the Middle East has been related to the delay in getting in place. As early as mid-2023, there was news that the Saudi Ministry of Investment would sign an agreement worth US$5.6 billion (about 20 billion yuan) with Human Horizons (the parent company of Gaohe Auto).

If this money is in place, it will obviously be able to solve the short-term survival worries of Gaohe Automobile, but unfortunately, according to Caixin and other platforms, this "life-saving money" has been blown away. Prior to this, Gaohe Automobile had received two financings in 2021 and 2022, but the total amount was only 800 million US dollars (about 5.7 billion yuan), which was obviously difficult to support subsequent R&D and daily operations.

In December 2023, NIO announced that it had received US$2.2 billion (about RMB 15.7 billion) in financing from Abu Dhabi CYLN Holdings, coupled with the opening of the battery swap network and cooperation with traditional car brands.

Xpeng, Weilai and other car companies are always easier to raise money than Gaohe for very complex reasons, such as better sales, more mature product layout, and more capital influence of the CEO himself, but Faraday Future, founded by Jia Yueting, is easier to raise money than Gaohe, and things become strange.

In my opinion, the hidden danger of Gaohe has been buried early on, and the root cause is because it is not a listed company.

Gaohe had plans to land on Hong Kong stocks and U.S. stocks, but in the end they were shelved for various reasons. The remaining domestic head new forces, such as "Wei Xiaoli", landed on the U.S. stock market early and became an important bargaining chip for their external financing.

From this point of view, Gaohe is unfortunate, because it is objectively not their responsibility to be unable to land on the US stocks, and it is completely "harmful to the fish in the pond". It is precisely because of this key factor that the entire trajectory of Gaohe's development has been changed, thus laying the root cause.

But from a fundamental point of view,"If you can't eat milk, you will die" has become a common problem for domestic new energy car companies, and the dilemma faced by Gaohe further illustrates that the current operation model of new forces has extremely high risks, if it is not possible to reverse it into a profit and achieve a positive cycle, then the sword of Damorisk will always hang over his head.

Combined with the recent intensification of the product war, this fact becomes even more ironic. In many cases, car companies are coerced by market competition and have to participate in the cruel war, and forcibly keeping up with the rhythm means that the more you sell, the more you lose, and if you don't follow, you may die faster - the new energy vehicle industry has entered a dead cycle of having to drink to quench your thirst to a certain extent.

Relatively speaking, in the eyes of competitors, Gaohe is basically a "harmless to humans and animals" image - it does not directly participate in the competition at the mainstream price, has its own differentiated track, and it is difficult to have real competitors.

Because of this, Gaohe is facing difficulties in the eyes of peers, and I think it will be more of a pity. Regret means that the cruel market doesn't seem to be able to tolerate manufacturers who have a quiet life, just like the classic sentence in the three-body problem: I will destroy you, but what does it have to do with you?

In fact, looking back on the past two years, Gaohe is not the first car company to encounter business difficulties, such as Weimar and Aiways, these brands have long since withdrawn from the historical stage quietly, leaving only chicken feathers.

Compared with them, Gaohe's experience still has a certain enlightening effect, after all, Gaohe is indeed seriously building cars, and there are also large-scale sales, so its predicament can highlight the importance of "decision-making" in the current new energy market. In terms of products and operations, some slight errors in judgment are likely to lead to the collapse of the building.

For Wei Xiaoli, is the current performance stable? For second-tier car companies such as Nezha, Leap, Zeekr, etc., is the current performance enough to be calm?

Perhaps for these new power car companies, the proposition of "how to avoid becoming the next high-tech" will be studied clearly, and the probability of staying at the table will increase by one point.