Can Lao (09863) continue to lead the way in 2024 with C10 integrated with LEAP3.0 six technologies?

The best SUV under 500,000 yuan, independently developed with LEAP3.0 six intelligent electric core technologies, Zero Run (09863) introduces the arrival of the C10 champion. It was learned that on January 10, 2024, LEAPMOTOR's open day for independent research and development was held in Hangzhou, releasing the six intelligent electric core technologies of LEAP3.0, and in the form of public lectures, explained the essence of the six technologies to users and media separately. In addition, the company announced the pre-sale of the first global model under LEAP3.0, the C10, with pre-sale prices ranging from 150,000 to 180,000 yuan for both the pure electric and extended range versions. LEAPMOTOR founder, chairman, and CEO Zhu Jiangming stated at the open day that the core technologies of the LEAP3.0 six modules released by Zero Run have all been mass-produced and are in stock, with no futures. This is different from competitors, such as Xiaomi's SU7 released on January 10, which has not achieved mass production and has not disclosed its price, being more of a "concept car". The C10 will open for test drives in February and deliveries will begin in March. It is said that the new energy vehicle market in 2023 was already "crazy", but 2024 will be even more so, with higher performance and better value-for-money models concentrated under 300,000 yuan. The market is undergoing rapid changes, and in this price war, only brands with technological expertise and independent research and development capabilities can survive. Zero Run is one of the few leading brands in the market with independent research and development capabilities. With the launch of the C10, its competitive advantage is significant, solidifying its position in the 150,000-200,000 yuan price range. LEAP3.0's six intelligent electric core technologies herald the era of software-defined automobiles In the era of traditional gasoline cars, people often talk about the three major components: the engine, transmission, and chassis. However, with the maturity of technology, homogeneity is more serious and often the "standard" determines the value. In the current era of new energy vehicles, it is not only about the three major components (battery, electric control, and motor), but there is also a higher demand for intelligent experiences in areas such as smart cabins and autonomous driving systems, making intelligent cars the symbol of the new energy vehicle industry. The competition in the new energy vehicle sector is fierce, and to stand out in a price war, one needs to have a greater cost advantage than their competitors. Independent research and development allows car manufacturers to build the car's most important systems such as powertrains, autonomous driving, cabins, electronic systems, etc., from the ground up, achieving autonomous research and development of "software + hardware", which significantly reduces costs and enhances product capabilities and risk resilience. Since its founding in 2015, Zero Run has always adhered to the path of independent research and development of core technologies. Zero Run's independent research and development has gone through three historic milestones in 2019, 2021, and 2023, with continuous product evolution from the first generation LEAP to the third generation, and from distributed to domain-controlled to centralized integrated electronic and electrical architecture, LEAP3.0 truly brings smart cars into the era of software-defined automobiles. LEAP3.0's six intelligent electric core technologies include a globalized vehicle architecture, Quadrifoglio central integrated electronic and electrical architecture, new energy golden powertrain (CTC battery + oil-cooled electric drive), intelligent cabin enhanced by 8295, and intelligent driving that is usable in both urban and high-speed scenarios. Zero Run's global vehicle architecture has the highest industry-standard generalization rate of 88%, covering vehicle models from A0 to C segments, and each platform can accommodate SUVs, sedans, MPVs, and other model developments with compatibility for both pure electric and extended-range products. The electronic and electrical architecture, Quadrifoglio, serves as the "decision-making brain" function, serving as the industry's first four-in-one central supercomputer platform that merges the power domain, body domain, cabin domain, and autonomous driving domain, with control units including left domain controllers, right domain controllers, and rear domain controllers, providing users with on-the-go updates (OTA) and offering a more sophisticated experience for smart electric cars. In terms of the three major components of new energy powertrain, the company showcased the independently developed CTC2.0 battery and chassis integration and the intelligent oil-cooled electric drive that make up the golden powertrain. The technology level is leading in the industry, with the CTC battery offering higher integration compared to CTP batteries, providing greater safety, more battery layouts, and better body torsional stiffness. The oil-cooled electric drive offers advantages in reliability, overall efficiency, and sustained power output compared to traditional water-cooled electric drives. The combination of CTC battery and oil-cooled electric drive can be considered an important criterion for choosing a new energy vehicle today. As a configuration for users seeking intelligent experiences, the company showcased the independently developed intelligent cabin with a fully immersive interactive experience, multi-level seat structure for enhanced comfort, powered by the Qualcomm Snapdragon 8295, with AI computing power reaching 30 TOPS, doubling the performance of the 8155 CPU. The industry-leading human-machine experience, in addition to achieving super seamless OTA updates, also offers the independently developed intelligent driving system, equipped with 30 high-performance perception components and high computational modules, supporting full-scene experiences for urban NAC/high-speed NAP driving. It achieves a three-in-one function fusion of a single 8295 chip for navigation, driving, and parking, and introduces the innovative NAC (full-time ACC) navigation-assisted cruise control, where users only need to hold the steering wheel, and the vehicle autonomously controls speed, recognizes red and green lights, and performs turning, overtaking, and straight-line driving in urban scenarios without manual intervention. Compared to competitors, Zero Run's performance is more practical, as autonomous driving technology has not completely liberated hands and feet, avoiding grand claims of how amazing autonomous driving is and various city-driving behaviors. However, the company's level is already leading in the industry. It is worth mentioning that the C10 is the product of the company's integration of the six major LEAP3.0 technologies and has launched a technological battle for the industry's "high value-for-money" in 2024. The C10's unmatched value for money in its class, along with its strategy for international expansion, is poised for success. Zero Run has been steadily focused on technological advancements, diligently working on independent research and development in the field, and has gained consumer recognition, successfully establishing itself as a leading brand among emerging forces. With sales of 144,200 vehicles in 2023, it ranked third among new car manufacturers, moving from being "under the radar" to "leading the pack". Zero Run focuses on creating quality products, introducing one or two new products with each technological iteration, such as the C11 and C01, based on the LEAP2.0 architecture. The C11 has become a best-selling product in the market, and the C10 in 2024 adopts the LEAP3.0 architecture, further advancing technological iteration and anticipating success.The event brings high expectations for explosive products.According to the press conference, the C10 has a higher competitive advantage compared to vehicles of the same level, such as the most comfortable rear seating space in its class, the best spatial variability, the most intelligent features with the new LEAP OS surpassing HarmonyOS, and the Leapmotor Pilot3.0 smart driving system with L3 redundant capabilities. It also boasts the highest level of safety with a vehicle body torsional stiffness of 42500N.m/ surpassing Rolls-Royce, and real-time AI monitoring to ensure the safety of the vehicle's energy systems. Integrated with six self-developed LEAP 3.0 technologies, the cost-effective C10 leaves no room for competitors in its class and is priced between 15.18-18.18 million yuan for the extended range version and 15.58-18.58 million yuan for the pure electric version, aiming to secure a market share below 200,000 yuan. Compared to its competitors, the C10 faces little competition in terms of pricing, offering better value compared to similar configurations from Xiaopeng G6 and the Ideal L7. Intelligent driving and safety are the two most important factors for user car purchasing experiences. The C10 supports NAC navigation assisted cruise control and NAP high-speed intelligent navigation, equipped with the first batch of Qualcomm Snapdragon fourth-generation cabin platforms in the industry, with a highly intelligent cabin and leading new energy vehicle manufacturing capabilities. In terms of safety, the C10 excels in body strength, pedestrian protection, and energy system safety technologies, with the highest proportion of high-performance aluminum alloy materials used in the vehicle at 73.6%. At the beginning of 2024, Zero Run revealed the C10, making it difficult for competitors to compete. The last time Xiaomi held a SU7 press conference, the pre-sale price was not announced, but several brands have since held new product launches with prices mostly below 300,000 yuan. The introduction of the C10 will lower prices, making it a must for other new brands to reduce prices. Fortunately, apart from Xiaomi, it is expected that there will be no new "new energy vehicle manufacturers" in the future. Zhu Jiangming said that a "competition" is a good thing, only with competition can new energy vehicles gain an advantage and achieve market share from fuel vehicles. It is worth noting that the C10 targets the global market and will be launched in the domestic market in the first quarter of this year and enter the European market in the third quarter. Zhu Jiangming stated that the C10 will initially enter Europe, Australia, and New Zealand, with a focus on the European market currently in intensive deployment. The company is expected to leverage Stellantis' global business network to accelerate the overseas market expansion of the C10. Entering the second half of the "technology battle" in the industry, self-developed technologies are leading the competition. With the industry in fierce competition, users benefit, but for car companies, the key is capital resilience. Without cost advantages or blindly expanding, companies risk running out of funds in this elimination race and being eliminated. Zero Run understands the importance of cash flow and comprehensive self-research gives it full control over reducing costs and enhancing efficiency since September 2022. In Q3 of 2023, the company achieved positive gross profit for the first quarter with a gross profit margin of 1.2% and realized self-blood circulation of operating activities, achieving a net operating cash flow of 1.4 billion yuan in Q3 and a total of 41.62 billion yuan in net inflow in Q2. As competitors are facing increasing losses under price wars, the company is moving in the opposite direction, with visible improvements in profitability and cash flow at a rapid pace. Zhujangming said that the positive gross profit is partly due to the company's overall cost control optimization in product development and third round of cost reduction measures in Q4 of 2023, as well as a significant decrease in core battery costs. In 2024, the company aims to achieve greater improvement in cost reduction and efficiency with the C11, C01, and C10. The company adheres to the principle of good cars that are not expensive and customer-centric, with products priced to be more affordable and with high value. The company's self-research gives it more room for price adjustments. In the capital market, Zero Run is actively introducing industry funds and collaborative funds, including international giants Stellantis and Stellantis. The era of extravagant expansion with real money and silver is over, and existing car companies under elimination are entering the second half of competition based on technical strength. Zero Run's self-research and manufacturing account for 70% of the total vehicle cost, giving it a strong competitive edge. The launch of the C10 includes several industry-first features, such as the first four-domain central domain control, the first integrated cockpit fusion perception, the first NAC function that does not require opening the city, and the first OTA upgrade without sensation, with a price range of 15-20 million yuan, the C10 is expected to be a market hit within the 200,000 yuan range, providing continuous profit improvements and net cash flow. In fact, besides the C10, the second model based on the LEAP3.0 six self-developed technologies, the C16, will also be released this year, with 2025 being a big year for product releases with five or six new models to meet market demand. In terms of distribution, the company in China promotes the "1+N" model through localized dealerships to minimize competition between them and better explore the market. With Stellantis' support overseas, LEAP3.0 products have a natural advantage when going abroad compared to competitors. Overall, in 2024, Zero Run's full-scale self-research open day provided the market with a comprehensive understanding of its technology's history of iterations and the latest LEAP3.0 six self-developed technologies. The C10, as the first model to incorporate many technologies, is undoubtedly the best SUV under 500,000 yuan in the market. With a price range of 15-20 million yuan, it is expected to be popular, although deliveries will not start until March, and performance growth is expected to be achieved in Q2. The new energy vehicle industry has entered the second half of the "technology battle," and whether Zero Run, with its comprehensive self-research technology, can continue to lead remains to be seen. Time will tell, let's wait and see.