Wang Chuanfu: Decisive battle intelligence in the second half

The trend of industrial chain reconstruction is becoming more and more obvious, so that important parts companies are independent, promote marketization, and participate in competition, which is an important strategy of Wang Chuanfu.

Wen | Wang Xuanxuan, a reporter for China Entrepreneur

Edited | Ma Jiying

Head photo | Shi Xiaobing

In the familiar battlefield of new energy vehicles, the repeated record sales may make Wang Chuanfu, chairman and president of BYD Group, feel a long-lost sense of victory.

In November this year, BYD sold 97,242 passenger cars, of which 90,121 new energy vehicles were sold, an increase of 252.7% year-on-year; from January to November, the sales of new energy vehicles reached 500922 units, an increase of 230.7% year-on-year, and the growth rate was much higher than the overall level.

BYD ranked first in the sales of global new energy vehicle companies for four consecutive years from 2015 to 2018, but was once surpassed by other car brands in the turbulent track. Since the beginning of this year, with the latest DM-i hybrid models and pure electric models powered by blade batteries, BYD's market performance has repeatedly reached new highs.

In the capital market, from the beginning of 2020 to the present, the value of BYD A stock market has increased by nearly 7 times in the past two years. As of the close of trading on November 19, BYD's total market value reached 864.085 billion yuan.

Wang Chuanfu has said in public that the second half of the automotive industry will focus on intelligent transformation. He also seems to be preparing more resources for this. At the beginning of September, Wang Chuanfu said at a conference that it has now entered an era of intelligent change, and new IT is becoming a new engine of intelligent change. At the same time, in the great change of the automobile industry, electrification is the first half, and intelligence is the second half. To this end, BYD has set up an informatization committee to grasp informatization as a leading project.

At the same time, in the past two years, Wang Chuanfu has successively laid out management and products.

Wang Chuanfu decided a few years ago to let BYD from vertical integration to opening up, the trend of industrial chain restructuring in the past two years has become more and more obvious, so that important parts companies are independent, promote marketization, and participate in competition, which is an important strategy of Wang Chuanfu. Since the beginning of 2020, BYD has split off five subsidiaries such as Fordy Battery and Fordi Power.

The entrepreneur, who claims to be the chief engineer of BYD, believes that technology must first serve the strategy, and after more than ten years of deep cultivation of three electric and semiconductors, new energy vehicles have reached a key node of rapid development, which has spawned the marketization of subsidiaries.

But the implementation of the strategy has not been smooth. As the first subsidiary to prepare for an IPO, BYD Semiconductor's listing process this year has been full of twists and turns. BYD's IGBT and MCU chips are known as the "brains of new energy", and the demand has increased significantly with the rise in new energy sales, and whether it can be successfully listed may affect the market's confidence in other subsidiaries. Behind the 30 billion valuation, the product's dependence on internal supply is the biggest question it has received.

BYD's power battery ushered in the spring of this year, and lithium iron phosphate batteries were put into the alternative list by many car companies due to increased battery life and prominent cost advantages. In April, BYD's full range of switching blade batteries, Wang Chuanfu's must-talk acupuncture test is one of the most concerned projects in the exhibition hall of BYD's headquarters. But at the same time, the price of raw materials for power batteries has risen, the profit margin of batteries has decreased, and BYD has also fallen into a situation of "rising sales and declining profits" this year.

In terms of product structure, BYD seems to be realizing the replacement of new energy vehicles for fuel vehicles, with new energy vehicles accounting for more than 90% of sales in November, and in 2020, fuel vehicle sales account for 56%. Wang Chuanfu has repeatedly proposed in public to accelerate the replacement of traditional fuel vehicles, in the battery technology and charging infrastructure is not perfect, BYD came up with a plug-in hybrid transition plan, the new DM-i hybrid model is quite popular, Wang Chuanfu said in a public event on November 19, its undelivered orders have exceeded 200,000.

Wang Chuanfu once said that BYD's style is to "advocate technology, problem-oriented, solve problems through innovation, and seize the pain points of the industry." Although the promotion of new products will have a certain enlightenment period, as long as there is sufficient data to prove that it is right, it will be resolutely implemented.

At the same time, Wang Chuanfu also admitted that it is difficult to do strategy, and once it is wrong, it may be tens of billions of investment, and it may be delayed in three years. So, can Wang Chuanfu lead BYD, which has accumulated for many years, to win in the second half?

#中国