Recently, AVITAR officially unveiled its new mid-size SUV, the AVITAR 07.

According to reports, AVITAR 07 launched a total of six models, with the biggest change being the addition of three extended-range versions in addition to the pure electric models.

For AVITAR, the performance of AVITAR 07 is quite important, as AVITAR is currently facing the dual pressures of sluggish sales and financial losses.

Statistics show that from January to August this year, AVITAR delivered a total of 36,367 vehicles, a year-on-year increase of 150.7%. However, due to the low base, this delivery figure is not particularly impressive. Take NIO, a rival in the new energy vehicle market, as an example, its sales volume in August alone reached 48,000 vehicles. This shows that AVITAR still has a long way to go.

Of course, in addition to sales, losses are also a problem that AVITAR has to face. Before economies of scale are achieved, this is a necessary path for every new energy vehicle enterprise. According to data disclosed by Changan Automobile, AVITAR's net profits for 2022, 2023, and the first half of 2024 were -2.015 billion yuan, -3.693 billion yuan, and -1.395 billion yuan, respectively, amounting to a cumulative loss of 7.103 billion yuan over two and a half years.

Currently, the launch of lower-priced extended-range models is undoubtedly AVITAR's compromise in the face of sales pressure. Can this change achieve the desired results?

Below expectations

'As long as AVITAR needs it, Changan will provide money, people, and technology.' This is the promise that Zhu Huarong, Chairman of Changan Automobile, previously made to its subsidiary brand AVITAR.

The reason Zhu Huarong can make such a promise is that AVITAR's background is quite 'unusual'.

According to relevant information, AVITAR's predecessor was Chang'an NIO, a joint venture established by Changan Automobile and NIO with shareholding proportions of 95.38% and 4.62%, respectively. Its initial purpose was to help Changan Automobile achieve a breakthrough in electrification. However, after its establishment in August 2018, Chang'an NIO made little progress in vehicle production. To promote brand development, in May 2021, Chang'an NIO was renamed AVITAR and announced its cooperation with Huawei and Contemporary Amperex Technology Co., Limited (CATL).

On November 5, 2021, Changan announced its plan for AVITAR's mixed-ownership reform, intending to introduce investors such as CATL and Fujian Mindong. Subsequently, AVITAR embarked on a series of fundraisings:

In March 2022, AVITAR announced the completion of its first round of strategic financing, reducing Changan's shareholding ratio from 95.38% to 39.02%; CATL holds a 23.99% stake, making it the second-largest shareholder;

In August 2022, AVITAR completed its A round of financing, raising 2.547 billion yuan. Changan Automobile introduced six strategic investors, including China Merchants Capital and Wehao Innovations;

In August 2023, AVITAR received 3 billion yuan in Series B financing from investors including Changan Automobile and Southern Assets, with a post-investment valuation of nearly 20 billion yuan.

It can be seen that both Changan Automobile and the many strategic investors who participated are full of expectations for AVITAR.

Data shows that in 2023, AVITAR delivered a total of 29,600 new vehicles. As the first full delivery year, this figure fell short of AVITAR's previously set annual target of 100,000 vehicles, with a completion rate of only 29.6%. This year, despite the launch of new products, AVITAR's sales have yet to pick up, with cumulative deliveries of 36,367 vehicles in the first eight months of the year, averaging around 4,500 vehicles per month.

In addition to sales falling short of expectations, significant losses are another challenge facing AVITAR.

According to data disclosed by Changan Automobile, AVITAR's net profits for 2022, 2023, and the first half of 2024 were -2.015 billion yuan, -3.693 billion yuan, and -1.395 billion yuan, respectively, amounting to a cumulative loss of 7.103 billion yuan over two and a half years. Furthermore, as of the first half of 2024, AVITAR's total assets were 12.746 billion yuan, with net assets of 706 million yuan and a debt ratio of 94.46%. Perhaps feeling the immense pressure from sales and financial performance, AVITAR has had to make changes, such as introducing extended-range models and adjusting its sales model.

AVITAR seeks change

To boost sales, AVITAR has actively sought change over the past year.

Firstly, changes have been made to the sales model. According to official information, starting in April this year, AVITAR transformed its self-operated stores into franchised stores. Within just two months, AVITAR completed the communication and conversion of 115 Primary Marketing Areas (PMAs), 216 stores, and 1,430 employees. Taking Beijing as an example, currently, only two of the 13 AVITAR stores in Beijing, Sanlitun and Huaxi LIVE, are self-operated, while the rest have been franchised.

Media analysis suggests that AVITAR's shift from direct sales to franchising aims to leverage the extensive coverage of dealer networks to accelerate brand market penetration and reduce initial investment and long-term operating costs associated with self-operated stores. However, dealers are primarily profit-driven and may engage in 'aggressive sales,' which could negatively impact AVITAR's high-end brand image. For instance, high-end brands like NIO prioritize self-operation to enhance the user experience.

Secondly, AVITAR has introduced extended-range models. On September 26, the AVITAR 07 was officially launched, positioning itself as a mid-size new energy SUV. This is the third mass-produced model launched by AVITAR and the brand's first extended-range model, with a starting price of 219,900 yuan for the extended-range version. For AVITAR, the introduction of extended-range models is naturally aimed at boosting sales, as these models have a broader audience and can be priced lower than pure electric vehicles.

Compared to AVITAR's other models on sale, the main products of AVITAR 11 and 12 are priced above 300,000 yuan, while the extended-range version of AVITAR 07 starts at 219,900 yuan. The entire product line of AVITAR 07 ranges from 219,900 yuan to 289,900 yuan, positioning it at a lower price point compared to AVITAR 11 and 12. Admittedly, lower prices and additional models (extended-range versions) can potentially bring more sales to AVITAR, but such a price range may hinder its high-end image.

After all, in the public perception, high-end electric vehicles are generally priced above 300,000 yuan.

In summary, for the current new energy vehicle market, the heyday has passed. In addition to brand positioning, sales are also an important consideration, which is the real reason for AVITAR's pursuit of change. However, based on the data released by AVITAR so far, no significant improvement has been observed.

We believe that in the current new energy vehicle market, sales are king, and AVITAR must break through in sales to reach new heights.