Author: Zheng Zheng
Source: GPLP
April 7, Nextev released delivery data report in March. According to the report, Nextev delivered 1,533 vehicles in March 2020, with a month-on-month increase of 116.8%. As of March 31, 2020, Nextev ES6 and ES8 have been delivered a total of 35,751 units, of which 3,838 units were delivered in 2020 Q1.
Li bin, chairman and CEO of Nextev, said Nextev’s production had gradually resumed in March, mainly due to the gradual recovery of supply chain partners’ capacity in late March. At the same time, Nextev’s orders have been increasing since February with work hard in selling its products online.
According to the official statistics of Nextev, the company has been basically out of the impact of public health events, production and marketing capacity is also recovering. But according to Nextev’s revenue in recent years, the more its sales rise, the more the loss has increased sharply.
Data show that Nextev was established in Shanghai in May 2015 with a registered capital of 2.5 billion dollars. Year after year, Nextev’s financial report of 2016 full year released, the report shows its full year revenue of 4.951 billion yuan, net profit loss of 3.518 billion yuan.
With 2016 as the starting point, Nextev auto loss range “intensified”. From 2017 to 2019, the loss amount of Nextev was 7.562 billion yuan, 23.328 billion yuan and 11.413 billion yuan respectively, and the year-on-year decline of net profit was 75.62%, 208.50% and 51.08% respectively. Among them, the most obvious loss indicators are Nextev car continued in a negative state of gross margin.
According to Nextev’s 2019 full-year financial results announcement, its gross profit margins in 2018 and 2019 were -5.2% and -15.3%, respectively, and vehicle gross profit margins were -1.6% and -9.9%, respectively. This also means that, in theory, Nextev car sales and revenue are in inverse proportion, every car Nextev sold makes a sum of money loss.
Based on the continued loss of product sales, Nextev’s capital flow is also facing great pressure. According to public information, Nextev has conducted debt financing for 3 times in just one month from February to March in 2020, with the accumulative amount reaching 435 million dollars. It is worth mentioning that Nextev completed the latest round of debt financing in the first ten days, just completed a sum of up to 14.5 billion yuan of strategic financing.
Various phenomena make two inevitably question, the first, whether such an enterprise that sells more, loses more is still worthy of market trust. Second, how much money and time Nextev need to achieve profitability. Regarding these two major issues, GPLP.cn has also sent a letter of inquiry to Nextev, but as of press time Nextev has not received a reply.
But it is certain that Nextev’s top priority in the future is to carry out a certain degree of business adjustment and operation improvement as soon as possible. Otherwise, capital markets may allow a company to lose money for years on end, but they will not allow a company to lose money forever.
