Zero Run wants to replicate the success of LI in the market below 200,000 yuan.

With an annual sales volume of 376,000 vehicles and an annual revenue of more than 100 billion yuan, LI is firmly in the first place in the new force of car-making in 2023. Its imitator, Zero Run Auto, tried to segment the market under 200,000 yuan dominated by BYD and copied it successfully with the same strategy.

On March 2nd, Zero Run released the first global model C10, with a starting price of 128,800 yuan. This product is as close as possible to LI L series models from the interior design to the announcement and tone setting. At the press conference, Zero Run called this car "a more ideal home for young people".

Zhu Jiangming, CEO of Zero Run Auto, said in an interview with interface news and other media that every detail of Zero Run C10 is like the ideal L7 learning, and we can understand its subtleties such as grasping the user’s needs, the comfort of control and the display mode of the car.

Learning the experience of successful people can avoid some "traps" that are difficult to notice when developing products. Especially in the passenger car market with BYD’s pricing power of less than 200,000 yuan, the zero-running car facing the competition needs to provide products without obvious shortcomings and prices that attract users’ attention in order to win more market share.

The zero-run C10 is a medium-sized SUV, but the price of the entry-level and top-mounted models is lower than that of the compact SUV BYD Song PLUS DM-i by 1000 yuan. Zhu Jiangming believes that the zero run C10 at least targets BYD Tang, who is also a medium-sized SUV. The latter starts at 179,800 yuan.

This new car is also equipped with Qualcomm 8295 intelligent cabin chip, NVIDIA Orin X intelligent driving chip and laser radar, and the above hardware is generally equipped with products of more than 200,000 yuan.

By providing products with larger space size and higher configuration, but setting the price of lower-level models, the zero-run car has shaped the "cost-effective" label to the outside world.

However, the risk of the practice of "high allocation and low price" is that it is difficult for the company to obtain a better profit level, and it is necessary to form a large-scale sales volume to share the cost. In the third quarter of 2023, the net loss of zero-running cars was about 986 million yuan, and the free cash flow was still negative.

Another way to reduce costs is to rely on technological innovation. Zhu Jiangming revealed that the pallet materials and completely modular design adopted by the CTC battery chassis integration technology developed by Zero Run Automobile can move the cost space of about 1,500 to 2,000 yuan. In addition, the technical scheme of global self-research of core components can also give zero-run cars a stronger voice in bargaining with suppliers.

Zero-run cars will also adjust sales channels, add 4S shop service centers, and reduce and eliminate supermarkets with poor benefits. New forces such as Krypton and Xpeng Motors are doing the same channel optimization, which can not only reach a wide range of sinking users, but also reduce the cost of building stores.

In addition to the C10, the models on sale of the zero-run car include the medium and large-sized car C01, the medium and large-sized SUV C11 and the mini-car T03. These three models have ushered in a change at the same time and the price has been lowered compared with before, ranging from 4,000 to 10,000 yuan.

Zhu Jiangming expects that this year’s sales ranking of zero-running cars will be at least one more among the new forces of car-making. In 2023, the annual sales volume of zero-run cars was 144,000, ranking third behind LI and Weilai cars.

BYD is one of the key factors that affect the achievement of the goal. Last year, this new energy vehicle sales champion with an annual sales volume of 300 vehicles maintained a gross profit margin of more than 20% for many quarters, which means that it has more room to reduce costs and fight price wars.

Changan Deep Blue and Geely Galaxy, which are backed by traditional factories, are aiming at the same market segment, and they have sufficient price reduction power and financial support to compete with zero-run cars for market share.

Overseas markets may provide some sales support. In the third quarter of this year, C10 and T03 will be exported to Europe one after another. Zhu Jiangming revealed that this year, Zero Car will develop more than 200 overseas sales outlets and achieve sales of 6,000 to 10,000 vehicles. Overseas models of retail cars will still be produced in China and shipped to Europe.