Financial and SWOT Analysis of New Energy Vehicle Companies -Take Company X as an Example

. In 2021, Company X and Huawei joint business deep cross-border integration, the official launch of Smart SF5 model, into the new energy vehicle enterprise market. In order to understand the development status of the Company X after its strategic transformation, the author first analyzed the company's internal strengths and weaknesses, external opportunities and threats through SWOT analysis, and built a strategic matrix model on this basis, and then combined with the financial statements of the past five years for further analysis. The study showed that the overall expenses during the period have increased, and the operating profit has continued to decrease. After the transformation, the market pressure of company has intensified. In order to help Company X alleviate the operating pressure and improve its business situation, the author finally provided development suggestions for Company X based on the value chain perspective, which provided experience for similar vehicle enterprises to learn from.


History of the Company
Company X, founded in 1986, is a technology manufacturing enterprise with new energy vehicles as its core business. Company X 's business involves the research and development, manufacturing, sales and services of new energy vehicles and core tri-electric (battery, electric drive and electric control), traditional vehicles and core component assemblies.
In 2021, Company X pioneered a deep cross-border integration of joint businesses with Huawei, a global ICT leader, with the joint creation of the AITO and the Smart Model. At the same time, Company X established a long-term strategic partnership with Ningde Times, the world's leading new energy innovation and technology company, to provide a strong guarantee for the delivery of the Company's new energy vehicles.

External business environment of the industry
The development of new energy vehicles is an important path for Chinese automotive companies to address their dual carbon targets. As a representative industry for renewable and clean energy, new energy vehicles are undoubtedly a golden track for global car companies to transform and upgrade. Official statistics show that China's new energy vehicle market penetration rate will be as high as 23% in 2022, much higher than the global average of 12%, forming a stable and comprehensive consumption system.

Cross-border cooperation for new strategic planning
Company X cooperates with global leading ICT companies in the whole chain from R&D, manufacturing to sales and service to empower each other. The cooperation between the company and its partners is based on the profound insight and deep thinking of the future development of the automotive industry, and a high degree of consensus has been formed, integrating the company's industry-leading pure electric drive extended range technology, vehicle technology and highquality manufacturing capabilities, as well as the cuttingedge technology of the partners in the fields of information and communication, smart mobility, etc.

Building smart factories and accelerating the pace of transformation and upgrading
Company X has built a smart manufacturing plant represented by Liangjiang Smart Factory and Shiyan Airport Factory. With digitalization and intelligence as the core driver, Company X has combined new technologies such as big data and Internet of Things to build an industry-leading vehicle manufacturing plant, which has been awarded the "Lighthouse Factory" in Chongqing in 2021. The plant consists of five process workshops: stamping, welding, painting, final assembly and battery PACK, with platform, flexible and transparent production lines, and is equipped with more than 1,000 advanced industrial robots in the five process workshops and charging and testing workshop, with 100% automation of key processes. Through big data and artificial intelligence, we can quickly and accurately carry out customized production on a large scale with real-time online response, which improves production efficiency and ensures product quality, and realizes "flexible, transparent, automated, connected and intelligent" car manufacturing.

Pure electric drive extended range technology with high performance and long range
Company X researches and manufactures itself, and has launched a pure electric drive range extender platform with high performance, low energy consumption, quietness, safety and intelligence, which has a more simplified battery module structure to ensure energy density and at the same time, stability without fire and safety without hidden danger; an integrated intelligent generator set, the first in the industry and leading in the industry, can generate 3.2 degrees of electricity with one liter of oil, which is 20% higher than the industry average; an intelligent range extender control system, which can bringing a comfortable driving experience to users.

Appearance design is not too bright compared with other models
The exterior design and interior design of Celes SF5 are relatively simple, which cannot give consumers a bright feeling. Compared with the design of some new power brands, the sense of technology is weak, not trendy enough, no sense of premium.

Own cost management problems
There is a disconnection between R&D link and market demand. In the procurement process, due to the complex domestic and international procurement environment, the pressure on the procurement center is also relatively high, the work efficiency and quality have been unsatisfactory to all parts, the existing procurement model is less resilient, the overall quality of suppliers is low, due to the parts not arriving in time and quality problems, resulting in half of the production link of the shutdown ratio, thus leading to a large production loss and cost waste.

Single marketing channel and few offline stores
In addition to the lack of product advantages and the shortcomings of the hybrid program, another important factor is the weakness of the offline sales channel of Celes. According to statistics, there are no more than 30 Sailis 4S stores in the country. Such a weak offline sales network is simply impossible to support the expected annual sales of 300,000.

Domestic and foreign related policies support
Many domestic and international policies help the development of new energy vehicles, for example, the increasingly high international standards for environmental protection, especially carbon emission restrictions, indirectly promote the development of Company X new energy vehicles. [1]

Huge market opportunities
From the global sales trend, the global sales of new energy vehicles have been rising rapidly in recent years, and there is a broad market prospect for new energy vehicles. This is a huge development opportunity for the new energy vehicle market. In addition, due to the rapid development of urbanization in China, the number of motor vehicles owned by urban and rural residents is also growing significantly, and the congestion of urban traffic coupled with the environmental pollution of exhaust gas has intensified, forming a high concern for the livelihood of all sectors of Chinese society, which also brings a huge development opportunity for the widespread use of Company X new energy vehicles. [6]

Competition in the same industry
In China, BYD, SAIC Roewe and other independent brands have launched new energy models mainly in the form of pure electric drive, in order to capture the share of this "blue ocean" in the field of new energy. Compared with its main competitors, Company X started its business relatively late and has no preconceived advantage. As a result, Company X lags behind its main competitors in terms of automobile market influence. In addition, consumers have a low understanding of its new brand cars. Company X is relatively passive when seizing the market, and the industry competition is becoming increasingly fierce, which poses a threat to the development of Company X new energy vehicles.

related financial subsidies continue to shrink
Although the purchase of new energy vehicles in 2023 can still enjoy the preferential policy of exemption from purchase tax, they will no longer enjoy state subsidies [7] . According to the Notice of the Ministry of Finance, Ministry of Industry and Information Technology, Ministry of Science and Technology, and Development and Reform Commission on Improving the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles, the new energy vehicle purchase subsidy policy will be terminated by December 31, 2022. The elimination of the subsidy policy for new energy vehicles will also mean that the price of new energy vehicles will increase, which intensifies the threat of pricing for Company X. [2]

Infrastructure development lags behind
Although China's new energy vehicle enterprises have improved their technological innovation level, their technological innovation capability is still insufficient compared to developed countries, and their control of core technology is also insufficient. At present, the core technology in the field of new energy vehicles is still controlled by developed countries, especially in the key area of new energy vehicle power battery, the domestic technology level is still far below the developed countries.

Strategic analysis
Based on SWOT analysis of the company, four types of strategic measures are obtained, and a strategic matrix diagram is established as shown in Figure 1.

SO(Use advantages to seize opportunities)
WO(Use opportunities to overcome disadvantages) 1. Company X can take advantage of the pure electric drive extended-range platform and product R&D. It can seize the opportunity and policies to accelerate the development of its own enterprises. [5] 2.China's new energy vehicles have established its industrial ecology and mastered a number of core technologies, laying a solid foundation for new energy vehicle enterprises. Comopany X can take this opportunity to increase its investment in the market and take advantage of the policy dividend.
1. Comopany X should increase brand publicity and carry out market promotion [8] . 2. Comopany X can increase the opening of offline stores and expand marketing channels and increase the investment in the interior and exterior design of the products, improve the lack of single model and enhance the competitiveness of its own products.

ST(Use advantages to avoid threats )
WT(Minimize weaknesses and threats) 1. Company X should increase investment in innovation, constantly introduce the old and bring forth the new, and expand our market share in the complex and volatile market. 2. Company X should rationally analyze the current market situation, deeply understand user needs and control production and R&D costs.
1. Comopany X needs to find its own market positioning and cooperate with ICT enterprises to improve the procurement model. 2. While ensuring the stability of supply, Comopany X should strengthen cooperation with suppliers.Improve its own business model management and technological innovation. [3]  From table1, it can be seen that total assets of Company X reached an increase of 5,756,269,100 yuan or 21% over the previous year in 2021. Non-current assets of company showed an increasing trend year by year, reaching 1,735,637,600 yuan in the 2021, accounting for 54% of the increase in assets, year-onyear increase of 79015.19 million yuan, indicating that Company X is in good operating condition and has certain profitability. On the whole, the current assets showed an upward trend, accounting for 55% of the total assets. However, from the table, it can be seen that there was a significant decline in 2020, with a decrease of 29%, indicating that the short-term solvency of Company X was weak, and the liquidity turnover was difficult. It is speculated that the sales of new energy vehicles decreased compared with the previous year due to the epidemic at that time, In addition, due to the influence of the company's sales strategy and product structure adjustment, the value of each unit of the products sold decreased, and the gross profit margin decreased, resulting in the decrease of the whole group's business in this business segment and the decrease of disposable cash. However, by 2021, there was a sharp rebound, indicating that company reset its sales strategy and the terminal sales situation continued to improve.

Financial enrollment analysis 4.1 Interpretation of assets and liabilities
Current liabilities account for a large proportion of total liabilities, indicating that Company X is under great pressure to repay debts. [4] Meanwhile, accounts payable continued to increase, current and non-current liabilities were generally on the rise, indicating an increase in long-term borrowings as well as long-term payables. Enterprises increased investment in product research and development, expanded reproduction on a large scale, and invested more in fixed assets, which led to a rise in fixed capital usage. At this time, Company X did expand its scale and adjust its production cost control, and is gradually transforming into a technology manufacturing enterprise.

Fig2. Chart of fixed assets intangible assets 2017-2022
As can be seen from Figure 2, fixed assets increased year by year, reaching 7,799.05 million yuan in 2021, among which the fastest growth rate was 31% from 2018 to 2019. This is because Company X focuses on the research and development of its own technology and the establishment of a platform in technology. It has launched high-end smart cars in products and expanded the smart factory of new energy vehicles in scale.
The Group's intangible assets increased significantly from 416351.59 million yuan to 515127.261 million yuan in 2020, an increase of 23% over the previous year, with the fastest growth rate from 2018 to 2019, an increase of 75%. The overall trend is increasing year by year. This is because Company X has increased its investment in product development and patent technology while expanding its scale. From the waste of raw materials in the early stage to the continuous increase of procurement costs and the wrong understanding of the control of research and development costs, to the breakthrough progress made on the vehicle technology platform independently developed by Company X with independent intellectual property rights. According to Table 2, the operating income and operating cost of the enterprise, it can be found that before 2020, the operating income and operating cost are continuously declining, which shows that before 2020, Company X has not been involved in the new energy vehicle business, and the business scope is limited. It is difficult to improve the income. It can be seen from the data that after 2020, the total operating revenue has increased by 16.89%, compared with the previous period.

Interpretation of operating income and operating cost
The main reason for the change is that Company X began to join the new energy vehicles, and the sales of new energy vehicles increased, thus bringing more income to the enterprise. The operating cost increased by 24377871 million yuan or 17.86% compared with the previous period. The increase in cost is mainly due to the increase in the sales of new energy vehicles. The increase in the sales of new energy vehicles will also increase the corresponding costs, thus leading to an increase in the operating costs of enterprises.
The period expenses comprehensively reflect the scale of the enterprise's expenses. From the data, we can see that from 2020, the sales expenses and management expenses have increased compared with the previous period, while the financial expenses have decreased slightly. It shows that at this time point, Company X has expanded its business segment, invested more costs in R&D projects and sales channel construction, as well as continued spending on management personnel.
The increase in sales expenses is mainly due to the launch of new Company X models, which leads to the increase in marketing channel construction and sales service fees. The increase in administrative expenses was mainly caused by the increase in business volume, labor costs and operating expenses of Company X. The decrease in financial expenses was mainly caused by the decrease in interest expenses. Compared with the previous period, the R&D cost increased by 11009700 yuan, an increase of 13%, mainly due to the continuous improvement of the independent R&D ability and core technology of Company X, the improvement of the performance of new energy vehicles and the improvement of the automobile production supply chain. Fixed assets Intangible assets

Establish New Energy Vehicle Alliance to promote the rapid development of new energy vehicles.
In the face of the impact of the traditional fuel car market, new energy vehicle enterprises should unite and establish a new energy vehicle alliance to share resources, help each other, make progress together, achieve win-win cooperation, and jointly promote the rapid development of new energy vehicles. New energy vehicle alliances can reduce costs to a greater extent. As a means of optimizing resource allocation, industrial alliances can reduce transaction costs, negotiation costs and transaction time costs in the market, lowering the overall cost of the new energy vehicle value chain and enhancing the market competitiveness of new energy vehicle enterprises.
Through the establishment of alliances, enterprises can improve their own strength and cooperate to achieve the effect of economies of scale through alliance development, alliance procurement, alliance investment, alliance sales and finally achieve win-win cooperation.

Increase R & D investment, improve technical standards and international r & D level.
New energy vehicles should increase the investment in independent research and development and strive to master the research and development of core technology of new energy vehicles in their own hands.
Each new energy vehicle enterprise can build a new energy vehicle R&D platform, integrate domestic resources, strengthen the R&D division of labor and cooperation among enterprises and jointly research core technologies to improve the independent R&D capability of Chinese vehicle enterprises, reduce R&D risks, and alleviate the R&D pressure of individual enterprises. Through this, we will improve our new energy testing standards, and standardize the quality of new energy vehicle products, so that vehicle enterprises will have rules to follow in their production and operation, and reduce unnecessary waste of human, material and financial resources.