Nezha, an all-electric car brand owned by Hozon Auto, is a dark horse in the passenger EV sales. Over the last three months, it has delivered over 10,000 units each month, joining the top list of the new car-making forces. It delivered 69,674 units for the whole year, achieving a year-on-year increase of 362%.
Nezha embarked on a different path of making and selling its vehicles. It entered the market with the entry-level affordable models targeting lower-tier cities. The prices went up as Nezha gradually penetrated into the first and second-tier cities. The price of V-series units ranges from 60,000 to 100,000 yuan, and the U-series from 100,000 to 160,000 yuan. “Every player in this industry wants to grab the high-end market share in the first-tier cities,” said Zhang Yong, the co-founder of Nezha. “But we do not have the conditions, so we decided to start from the bottom-up.”
Clearly, Nezha has tactics to implement this bottom-up strategy. First, expand its product lineup. Different products aim at different markets. Second, expand its sales channels. It plans to enlarge its presence in as many as 250 cities in 2022. Third, accelerate internationalization. The first step is to enter Thailand and the ASEAN market.
Doubts still linger on how many Nezha has sold its cars to consumers. A large proportion of the entry-level subcompact crossover—Neta N01 was sold to ride-hailing platforms and local government organizations where Nezha factories are located as a gesture of support for local car makers. Because of the relatively low price of each unit, Nezha has not generated high revenues. In the first half of 2021, its revenue was 1.632 billion yuan, suffering a loss of 693 million yuan. NIO, whose car sells at 440,000 yuan on average, reported a revenue of 16.4 billion yuan in the same period.
Though Nezha has not been publicly listed, it secured billions from influential investors. In 2021, 360 company, one of China’s internet giants, invested 2.9 billion yuan in Nezha’s Series D funding round, holding roughly 16% of its equity. CATL, the world’s largest EV battery maker, also showed support by pouring money in this startup. After rounds of financing, Nezha was valued at 22 billion yuan in October 2021.