This is an unprecedented and very in-depth cooperation in the automotive industry, which will bring huge opportunities for our future development. It is also a proof of the technological and product strength brought by Zero Run's long-term commitment to self research and technological innovation; At the press conference on Zero Run strategic cooperation, Zhu Jiangming, the founder, chairman, and CEO of Zero Run Technology, made a confident opening speech.
On October 26th, Zero Run Motors and Stellantis Group announced a global strategic partnership. Stellantis Group will invest approximately 1.5 billion euros in Zero Run Motors and become its strategic shareholder to enhance its global electric vehicle business. In addition, Stellantis Group and Zero Motor will establish a joint venture called "Leapmotor International" in a ratio of 51% to 49%. By leveraging Stellantis Group's extensive commercial strength and accumulation worldwide, the joint venture will accelerate and expand the sales of Zero Motor's high-tech and cost competitive products worldwide.
In short, both parties in the cooperation will complement each other's strengths and become their hands on each other. Stellantis Group will leverage the electric vehicle ecosystem led by Zero Run Automotive Technology to accelerate the electrification process. Zero Run will leverage Stellantis Group to amplify the scale advantage of its own research and accelerate the development of global markets.
Expanding the global market through the establishment of a joint venture is a pioneering move in the industry. The news sparked discussions from various sectors, with the focus on why Zero Run wants to give up 1 percentage point in the joint venture's stock ratio. After being taken over by Stellantis Group, can Zero Run continue to remain intact? For the above questions, Zero Run Motors has made a clear response: there is no relinquishment of sovereignty and control. Zero Run is still the same as Zero Run, and the Chinese side still holds the dominant position. The joint venture company is controlled by the other party, which can stimulate the other party's maximum enthusiasm and mobilize all available resources in a battlefield that Zero Run is not familiar with. Zero Run can promote and build overseas markets through this cooperation model, Concentrate resources on the strategic direction of research and development, products, and domestic market.
It is worth mentioning that Zero Runner and Stellantis Group have established a global strategic partnership with the goal of building a highly competitive and efficient electric vehicle enterprise in China and globally. The establishment of a global partnership between the two parties is also an industry initiative, where a world leading automobile manufacturer and a Chinese new power electric vehicle enterprise based on technology have collaborated on global electric vehicle projects. In addition to proving the recognition of Zero Run technology and products from the outside world, it has also successfully implemented the strategic goal of providing a complete set of intelligent electric solutions for Zero Run cars.
Why does Zero Run hold hands with Stellantis?
Since the beginning of this year, an increasing number of Chinese autonomous driving technology companies or new forces in car manufacturing have been favored by foreign investors. After Volkswagen Group, Europe's largest automaker, invested in Xiaopeng Automobile, Stellantis, Europe's second largest automaker, invested in another new force in Chinese car manufacturing - Zero Run Automobile.
According to a joint statement released by Stellantis and Zero Motor, Stellantis Group plans to invest approximately 1.5 billion euros to acquire approximately 20% of Zero Motor's equity, which will make Stellantis Group an important shareholder of Zero Motor. This transaction also confirms that Stellantis Group and Zero Motor will establish a joint venture called "Leapmotor International" in a ratio of 51% to 49%. As for the main business of this joint venture company? Zero Run Motors clearly stated that they only sell Zero Run cars in the global market and provide complete sales and services, which is currently not available for other car companies going overseas.
The reason why Zero Run and Stellantis were able to successfully join hands as partners is mainly due to the highly aligned values of the two companies, and their ability to complement each other in their respective advantageous areas, leaving infinite space for future development.
Stellantis Group was established in early 2021, formed by the merger of the former Peugeot Citroen Group and the former Fiat Chrysler Group. Currently, it owns companies including Maserati, Jeep& Reg 14 car brands including Alpha Romeo, Dodge, Abbas, Citroen, Peugeot, etc. High operational efficiency is a core competitiveness of Stellantis Group. In 2022, Stellantis Group sold over 6 million cars worldwide, achieving a net revenue of 179.6 billion euros, a net profit of 16.8 billion euros, and an adjusted operating profit margin of 13%. In the 2023 Fortune Global 500 ranking, Stellantis Group ranks 31st. In the first half of 2023, Stellantis Group continued to become one of the highest profit margins in the global automotive industry with an adjusted operating profit margin of 14.4%. Stellantis Group's customers are located in more than 130 countries around the world and has manufacturing operations in over 30 countries.
Stellantis Group currently owns companies including Maserati, Jeep& Reg 14 car brands including Alpha Romeo.
Zhu Jiangming candidly stated that, This year, we have had contact with many global car companies and have had extensive exchanges. The biggest reason we chose Stellantis is twofold. Firstly, the cultures of the two companies are very compatible, and they are both frugal, emphasizing efficiency, simplicity, and efficiency. The values of creating maximum value for users are quite consistent. Secondly, they are complementary. Firstly, 98% and 99% of Zero Run's sales are currently in China. To expand the global market, it is necessary to have a good cooperation Partners, while Stellantis excels in other global fields, with cost control advantages in terms of efficiency, products, services, sales and service networks; The characteristic of Zero Run is that it is a technology-based company. We are fully self-developed, and 70% of the core components in a car are self-developed and manufactured by ourselves. If we cooperate in the future, we can imagine a very large development space, including the market and products, which are very complementary and can generate 1+1> The value of 2
In fact, choosing such a cooperation model also reflects the efficiency considerations of Zero Run Automobile. Zero Run Motors states that its resources and scale are limited, and we cannot invest resources on a large scale overseas. The input-output ratio is what we need to look at. Although the future of electric vehicles will rely on technical and software services, which will be the development trend in the future, it is essential to focus on product sales at present. Without basic product sales, future technology and software service upgrades cannot be achieved. Therefore, in foreign countries, our cooperation with Stellantis is focused on sales and expanding market products, which is fundamental.
Indeed, for Zero Run cars that are pursuing efficient scale, choosing to collaborate with Stellantis at this time undoubtedly gives them a pair of powerful wings to compete in the global market.
Opening up the Third Path to Realize Globalization Strategy
During the Munich Auto Show in September this year, Zero Run officially launched its globalization strategy.
In terms of scale, globalization is necessary, otherwise you cannot become a global enterprise. "Zhu Jiangming has repeatedly expressed his determination to" go global "in Zero Run.
At the auto show, the LEAP3.0 architecture and the first global model C10 of Zero Run made a high-profile appearance, demonstrating Zero Run's global prospects to the outside world: including global sharing of leading technologies and global sales of advanced products. It not only needs to be a main engine manufacturer, but also a leading intelligent electric solution in all aspects. This is the third way out of the sea that is different from other enterprises.
In Zhu Jiangming's view, joint venture is a better form of achieving overseas business. The automotive industry is different from traditional industries. In every country, the automotive industry is basically a pillar industry. Unlike mobile phones or televisions, automobiles can be completely exported. So how can we better expand the global market? Zhu Jiangming believes that a good partner is needed. Through joint ventures, some of China's good technologies and products can create value for the world, bringing both good and cheap products to everyone. Joint ventures can also help Chinese cars quickly exit China and achieve globalization
The key task of the joint venture company, Zero Run International, is to sell Zero Run cars. "The fundamental purpose and goal of this matter is to promote the electric vehicles of the Zero Run brand to different markets around the world, and to organize the entire operation and production, sales, and services of the joint venture company around this matter." Wu Qiang, the joint president of Zero Run cars, told media including Time Finance.
Specifically, it is to utilize Stellantis' comprehensive overseas layout, multi brand, and multi-channel resources to help Zero Run establish more distribution networks and develop marketing measures overseas, sell new products created by Zero Run Motors using LEAP3.0 technology globally, and accelerate Zero Run's overseas layout. In the future, except for the Greater China region, Zero Run International Joint Venture has the exclusive right to export and sell to all other markets around the world, as well as the exclusive right to manufacture Zero Run automotive products locally. This will further enhance the sales of Zero Run cars in China, the world's largest automotive market, and also rely on Stellantis Group's mature commercial layout in other global markets to vigorously increase the sales of Zero Run car brands in overseas markets.
Zhu Jiangming said, "The future development of the automotive industry requires strong alliances. We believe that through in-depth cooperation with Stellantis Group, we can enable Zero Run's excellent products and technology to serve more global consumers
In fact, Stellantis is not the first Western automaker to announce cooperation with local Chinese automakers. Previously, multiple multinational car companies have chosen to cooperate with Chinese car companies and carry out local development of electric vehicles or intelligence according to local conditions.
But this time, Zero Run Automobile and Stellantis Group have deep cooperation and strategic alliance in terms of funds, technology, joint venture formation, and global strategic partners, achieving the rapid going out of China's intelligent electric vehicles, becoming bigger and stronger, and laying a good example for China's new energy vehicle companies to go global.
For Zero Run, its technology is favored by global automotive giants, with industry first self-developed technologies such as central domain control and CTC batteries proving Zero Run's leading technology in the eight years of global self-developed development; At the same time, it also proves that the road for Zero Run cars to become both a main engine factory and a comprehensive solution provider for intelligent electric vehicles has been paved. By collaborating with Stellantis Group to enhance the reuse of technology platforms and increase sales, the scale advantage and cost control advantage of Zero Run's self-developed technology will become increasingly prominent, and the second growth curve of Zero Run's technology revenue generation will be rapidly amplified.
Fully self-developed to empower zero running to the sea
Most of the new forces in Chinese car manufacturing were established eight years ago, cross-border from industries such as the internet and IT. Some have quietly left, while others have grown into important forces that cannot be ignored in the Chinese new energy vehicle market. These rising stars each have their own distinct personalities and labels. Zero Run Motors always adheres to the comprehensive self-development of core technologies, with a self-developed and self-made proportion accounting for 70% of the total vehicle cost. They have successively launched leading technologies such as the industry's first 8-in-1 electric drive, the industry's first mass-produced CTC battery chassis integration technology, the first domestic car enterprise to self-developed intelligent driving chip - Lingxin 01, and the industry's first "four in one" central integrated electronic and electrical architecture, It has grown into the only intelligent electric vehicle enterprise among the new forces of domestic car manufacturing that has the highest level of comprehensive self-developed capability and vertical integration, which also means that Zero Run Automobile has sufficient discourse power and pricing power over its own products.
By focusing on China's largest and fastest-growing mid to high-end new energy vehicle market, Zero Run achieved the delivery of 111000 new energy vehicles in 2022, ranking among the first tier of China's new car manufacturing forces. Since the beginning of this year, sales have been steadily increasing, reaching a historic high in the third quarter and firmly ranking among the top sales figures of the new power camp. During the same period, the gross profit margin of Zero Run cars turned positive and began to move towards profitability.
The excellent self-developed ability, mature technology accumulation, and stable development momentum of Zero Run are the main reasons why it is favored by Stellantis Group.
In the view of Carlos Tavares, Global CEO of Stellantis Group, With the integration of strong electric vehicle startups in the Chinese market, a small number of efficient and flexible electric vehicle new power enterprises such as Zero Run Motors will occupy the mainstream segment of the Chinese electric vehicle market, which is becoming increasingly evident. Zero Run has a unique product portfolio, which is very focused on technology and passionate, whether it is in the most basic financial or corporate governance aspects Efficient. In addition, Stellantis Group also needs to have a certain level of exposure to the Chinese market. If we want to win the Chinese market, it is best for us to first win the help of a good Chinese company. This is our logic
Wu Qiang, the joint president of Zero Run, also revealed the details behind the establishment of cooperation between Tang Weishi and Zero Run
At present, globally, Stellantis has a clear electrification transformation plan and is promoting the electrification transformation of its 14 car brands. By investing over 50 billion euros in the electrification field, it aims to achieve its electrification goal in the "Dare Forward 2030" strategic plan: by 2030, all passenger cars sold by the group in Europe will be pure electric vehicles, 50% of passenger cars and light trucks sold in the United States are pure electric vehicles.
Zhu Jiangming stated that this cooperation can achieve a larger scale for Stellantis. On the basis of the existing 14 brands, Zero Run brand can be added to regions outside of China to gain advantages in service, finance, and sales network in various aspects. For Zero Run, the cooperation with Stellantis is more about utilizing their multi brand business philosophy. Adding another Zero Run brand to 14 brands can quickly seize the market and provide better services for users of Zero Run brand products, allowing the brand to quickly develop globally.
The sales of new car manufacturers in China continue to grow, and in the Q3 of 2023, the average monthly sales of top new car manufacturers have exceeded 10000 units. At present, expanding into a broader global market has become a common choice for new car manufacturers. However, most of them have not yet established production and manufacturing bases overseas, and their service models are mostly signed with local dealer groups. Zero Run Motors has formed an international joint venture company called "Zero Run International" by gathering with international giant Stellantis, leveraging Stellantis' global mature system and possessing export capabilities The global layout of integrating sales and production of Zero Run automotive products.
Zero Run Automobile is the world's first new energy vehicle company to adopt CTC battery chassis integration technology on mass-produced models. This year, the "Four Leaf Grass" centralized electronic and electrical architecture has achieved seamless and efficient collaboration between core components of intelligent electric vehicles. Thanks to the comprehensive self-developed vertical integration capability, Zero Run Automobile is rapidly launching competitive products that adapt to market changes to the maximum extent possible. It is reported that in the next three years, Zero Run Automobile will build "pure electric+extended range dual power" intelligent cars from Class A to Class E based on a technical architecture and three vehicle platforms. As Zero Run's first global product, C10 will be launched in multiple global markets next year, and five more global products will be launched in the next two years. The joint venture company of both parties has the exclusive right to export, sell, and locally manufacture Zero Run automotive products to all other markets worldwide. Relying on the mature commercial layout of Stellantis Group in other global markets, Zero Run Automotive will achieve its brand influence in the global market through a light asset approach.
Zero Run, holding hands with Stellantis Group, has not only become an important milestone since the establishment of Zero Run Automobile, but also an important footnote for China's intelligent electrification of automobiles to advance globally. It is an embodiment of Zero Run's eight years of self-developed intelligent electric technology with industry-leading and cost advantages, and also a manifestation of China's intelligent electric vehicle enterprises leading the world. It has also explored new paths for China's intelligent electric vehicle enterprises to seek globalization.