The former billion-dollar EV startup star has lost its luster.

From being a capital-market darling among new-energy vehicle (NEV) startups—and ranking among the top three in that cohort—to achieving merely 25% of its annual sales target this year, AION, once valued at over RMB 100 billion, now appears somewhat faded. In June this year, AION’s sales totaled 35,027 units—a 22.18% year-on-year decline. In the first half of the year, cumulative sales reached 177,366 units, down 15.3% year-on-year. Against its minimum annual sales target of 700,000 units, AION has so far achieved only 25.34% of that goal. Facing the brutal price war head-on, AION—whose core models are priced between RMB 100,000 and RMB 150,000—has borne the brunt. In the first half of the year, AION exceeded 40,000 units in monthly sales only in May; in all other months, sales fell short of that threshold—even dropping to just 16,700 units in February, nearly halving year-on-year. On a month-by-month basis, AION has posted five consecutive months of year-on-year sales declines. Compared with the broader NEV market, AION’s performance is also underwhelming. Overall NEV sales grew 33% year-on-year in the first half of the year. Amid intensifying concentration at the industry’s top tier—where ‘the strong get stronger’—AION’s sales slump is certainly not an encouraging signal. Meanwhile, saturation in the ride-hailing market has also impacted AION, long dubbed the ‘king of ride-hailing vehicles.’ The AION S remains AION’s top-selling model, accounting for over half of its monthly sales last year. Yet this model—marketed by AION as ‘custom-built for the ride-hailing sector’—has sold fewer than 20,000 units per month since October last year; this year, it has even dipped below 10,000 units in some months. As for Hyper—the premium product line on which AION had pinned high hopes—its highest monthly sales since launch have barely exceeded 2,000 units; most recently, monthly sales have fallen below 1,000. Moreover, AION’s declining sales have already begun affecting its parent company, GAC Group. In a recent report, UBS noted that although AION was an early mover in electrification, it is now being overtaken by competitors. Coupled with the weakening performance of joint ventures such as GAC Toyota and GAC Honda, UBS downgraded GAC Group’s rating from ‘Buy’ to ‘Neutral’ and sharply cut its price target. This stands in stark contrast to AION’s heyday two years ago. In 2022, AION was the capital market’s most coveted new-energy vehicle startup. That year, it completed two funding rounds—including an RMB 18.294 billion Series A round in October, subscribed to by 53 industrial and institutional investors—propelling its valuation above RMB 10 billion. At the time, shares were so sought-after they had to be ‘snatched’ competitively, making AION the most promising NEV startup. That same year, AION’s valuation surged from RMB 40 billion to RMB 100 billion in just six months. AION also delivered impressive sales figures to reassure investors. Entering 2023, AION’s sales climbed rapidly, breaching 40,000 units in March. On NEV sales rankings, AION frequently ranked second only to BYD and Tesla China.

To catch up with Morgan Stanley, besides doubling its valuation, what else does UBS need?

Moreover, Cevian Capital may have been attracted by UBS’s relatively low valuation: at the time, UBS traded at roughly half the valuation of Morgan Stanley—suggesting it was undervalued relative to its U.S. peers and thus held latent upside potential. Cevian Capital’s investment not only provides financial support but may also exert pressure on UBS’s management to implement measures that boost its valuation. Wealth Management Has Become a ‘Battleground’ Following the 2008 financial crisis, market reassessment of business models elevated ‘serving ultra-high-net-worth individuals’ to a strategic priority for financial institutions. Compared with investment banking, wealth management for the ultra-wealthy delivers higher capital efficiency—generating superior returns with comparatively lower capital outlays—while typically locking in clients for many years. Long-term client relationships yield stable revenue and profits for banks. UBS already possesses this highly desirable business mix: in 2023, 52% of its revenue came from wealth management, versus 49% for Morgan Stanley. However, UBS’s tangible equity return on wealth management stood at only 16%, while Morgan Stanley’s was 33%. This gap indicates that although UBS derives a larger share of revenue from wealth management, Morgan Stanley achieves significantly higher profitability in the same segment. Analysts note that part of UBS’s lower tangible equity return stems from integration-related challenges following its acquisition of Credit Suisse. Additionally, a one-off loss tied to UBS’s stake in Swiss financial infrastructure provider SIX Group also weighed on its earnings. Excluding these one-off items, UBS’s tangible equity return was 25% in 2022—much closer to Morgan Stanley’s level. UBS CEO Sergio Ermotti stated: ‘UBS aims to attract $100 billion in net new assets to its wealth management business this year—and repeat that achievement in 2025.’ Analysts point out that realizing this goal will likely require UBS to compete fiercely with Morgan Stanley in the U.S. market—the latter’s home turf—where competition is especially intense. Given the more prominent role played by wealth advisors in the U.S., wealth management there incurs higher costs. To grow in the American market, UBS may need to vie for market share against local rivals in a high-cost environment. Setting Ambitious Equity Return Targets and Enhancing Shareholder Returns via Dividends and Buybacks Additionally, to bolster market confidence and lift its valuation, UBS has adopted several measures: 1) Setting long-term targets for equity return and wealth management assets Morgan Stanley’s higher valuation reflects not only its ability to generate substantial profits from existing ultra-wealthy clients, but also market expectations for its aggressive growth targets. Indeed, Morgan Stanley’s growth ambitions are more ambitious: it raised its client asset target for its wealth and asset management division from $6.6 trillion at end-2023 to $10 trillion. According to Visible Alpha data, analysts expect the bank to approach this target by end-2027. To meet such lofty market expectations, Morgan Stanley must sustain growth in both the scale and market share of its wealth management business.

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