Soochow: Under the iteration of new cars and advanced intelligent driving, car companies will experience differentiation in their operations by 2024.

Soochow released a research report stating that under the rapid growth of high-end intelligent driving, the penetration rate of electric vehicle models is continuously increasing. The bank predicts that the sales of electric vehicles in China will increase by 25% by the year 2025, reaching 16 million units. In addition, global energy storage demand is expected to grow by 35-40%, overall lithium battery demand by nearly 30%, and is expected to maintain around 20% by 2026. Profitability in various links is gradually improving, with leading companies valued at only 15-18 times. Soochow recommends stable leaders in the battery and structural components sectors and sees potential in profitable material leaders. It also notes that lithium carbonate prices have bottomed out and is optimistic about leaders with high-quality resources. Soochow's main points are as follows: Sales: In 2024, Tesla's sales remain stable, while new forces generally see high growth, with Xiaopeng, Lixiang, and Xiaomi showing strong growth momentum. In 2024, Tesla's sales were 1.79 million units, a slight decrease of 2% year-on-year. In 2025, the company aims for a 20% to 30% increase in sales with the introduction of the new MY refreshed version and low-priced models. Xiaopeng has shown strong sales momentum, with sales of 92,000 units in Q4, a quarter-on-quarter increase of 52%/97%. In Q1 of 2025, sales remained stable, with plans to introduce new models each quarter and increase the range of models, with a target of doubling annual sales to 380,000 units. Lixiang achieved 294,000 units in 2024, a year-on-year increase of 104%, and plans to launch 3 models in the 10-15,000 price range in 2025, targeting 500,000 units, a 70% increase year-on-year. Xiaomi achieved 137,000 units in 2024 and plans to launch its first SUV in 2025, with a target of 350,000 units for the year. Li Xiang achieved sales of 500,000 units in 2024, a 33% increase, with growth expected to slow down. In the second half of 2025, new models, the pure electric I8 and I6, will be introduced, with a target of 700,000 units, a 40% increase year-on-year. Jinko Group will release 5 new models in 2025, with a target of 710,000 units, a 220% increase year-on-year. Increased competition puts pressure on the average selling price of car companies, but Xiaopeng, Lixiang, Xiaomi, and Jinko benefit from economies of scale, with significant improvement in profitability. In 2024, increased competition led to price reductions and increased sales of economic models, resulting in a 5-15% decrease in the average selling price of car companies. However, Xiaopeng, Lixiang, and Xiaomi benefited from economies of scale, with significant improvements in profitability in Q4, with gross profit margins in double digits. In Q4, Xiaopeng's overall business gross profit margin was 14.4%, with a loss of 14,500 yuan per vehicle, a significant reduction in losses. Lixiang had a gross profit margin of 13% in Q4 and achieved profitability in the first quarter; Xiaomi had a gross profit margin of 20% in Q4. However, Tesla and Li Xiang saw declines in per vehicle profits in 2024. Intelligence and globalization are the two main strategies for automotive companies in 2025. In terms of intelligent driving, Tesla aims to enter Europe and China with FSD by 2025. New forces in 2024 mainly focused on end-to-end competition and NOA in mapless cities, while in 2025, the focus will shift to equal rights in intelligent driving and the penetration of intelligent driving. Xiaopeng's MOAN03max version will bring high-end intelligent driving to the 150,000 price range and will be able to use city NOA. Lixiang's B10 will be equipped with LiDAR and will be able to use high-speed NOA from April, with the goal of using city NOA by the end of the year, with prices falling to 10-12,000. In terms of globalization, on the one hand, efforts will be made to accelerate the construction of overseas sales networks and brand promotion. Xiaopeng aims to double overseas sales to 40,000 units by 2025, while Jinko Group aims to have exports account for 10% of sales. On the other hand, new forces will accelerate the intelligent overseas layout, including data collection, testing, etc. Risk warnings: Price competition exceeds market expectations; unstable raw material prices affecting profit margins; slowdown in investment growth.