The explosive growth of new energy vehicles in China is prompting the transformation of the global automotive industry.
Zhu Jiang, former COO of Ford China, recently jumped to Baidu's Jidu Automobile, who has served as the "market operator" of many automobile brands, and now becomes the vice president of Jidu Automobile, mainly responsible for the construction of Jidu Automobile marketing, channels, after-sales and other market systems from 0 to 1. "It's mostly about personality, I'm a Gemini, I like new things, I like the feeling of challenging from 0 to 1, from scratch." Zhu Jiang recently spoke in an interview with the first financial reporter about the main reasons for his job hopping.
Zhu Jiang said that the salary of the new car-making forces and traditional car companies is similar in the cash part, the main difference is in options or equity, but there are many variables in this part, and he joined Jidu, mainly because of Baidu's Internet gene and automatic driving and other aspects of technology accumulation, Baidu's annual investment in research and development accounts for more than 15% of revenue, which makes Jidu have the opportunity to win in the unpredictable car market in the future.
Jointly funded by Baidu and Geely, Jidu is a new player on the smart car track, and the two sides will jointly build the next generation of smart cars based on Geely's Vast SEA intelligent evolution experience architecture. Recently, Baidu, Jidu and Qualcomm Technologies announced that the first model of Jidu Automobile, which is expected to be launched in 2023, will use an intelligent digital cockpit system jointly supported by Baidu and Qualcomm.
In Zhu Jiang's view, the first half of electrification is the competition at the physical level such as batteries, motors, and electronic controls, and the current gradual entry into the home of smart cars, the era of software-defined cars has arrived, turning to competition in digital and other aspects. Internet giants such as Baidu and Xiaomi have seized this opportunity to enter the market, which will accelerate the subversion of the Chinese auto market and the global auto market pattern.
According to the statistics of the China Association of Automobile Manufacturers (hereinafter referred to as "CAAM"), from January to November 2021, the cumulative output of new energy vehicles has exceeded 3 million, and the sales volume is close to 3 million. In November, the market penetration rate of new energy vehicles was 17.8%, of which the market penetration rate of new energy passenger cars reached 19.5%. The China Automobile Association predicts that sales of new energy vehicles will reach 3.4 million units this year. This means that this year's sales of new energy vehicles in China are expected to exceed last year's global sales of new energy vehicles. In 2020, the global sales volume of new energy vehicles was 3.284 million units, of which China's new energy vehicle sales were 1.367 million units.
The industry has higher expectations for the new energy vehicle market next year. According to the forecast of the China Automobile Association, the total sales volume of China's automobiles in 2022 will be 27.5 million units, an increase of 5.4% year-on-year, of which the sales of new energy vehicles will be 5 million units, an increase of 47% year-on-year. Ouyang Minggao, an academician of the Chinese Academy of Sciences, also predicts that domestic new energy vehicle sales will reach 5 million units next year. Wang Chuanfu, chairman of BYD, is more optimistic, he believes that next year's national new energy vehicle sales will be expected to reach 5.5 million, next December new energy penetration rate can reach 35%, the annual market share of 25 to 27%, three years ahead of schedule to achieve the 2025 national new energy development strategy.
Toyota and Volkswagen have spent a lot of money to catch up with Tesla
As China and the global new energy vehicle market enter a rapid upward channel, the great cake is being eaten by independent car companies and Tesla, which makes the sense of crisis of multinational traditional car companies giants increase sharply, especially Toyota and Volkswagen, which have long ranked first in global automobile sales, are becoming more and more anxious, and finally they can't hold back and strike hard.
Toyota Motor President Akio Toyoda, who was previously considered to be wavering in his attitude towards pure electric vehicles, released 16 new electric vehicles in one go on December 14, including 5 bZ series pure electric models such as bZ4X, 4 new Lexus brand electric vehicles and 7 concept cars. "We live in an era of diversity and difficulty predicting the future. No one product is available for everyone. Therefore, Toyota wants to provide our customers around the world with as many options as possible. Akio Toyoda said.
Toyota plans to invest 4 trillion yen in the development of electric vehicle models over the next nine years, and another 4 trillion yen to continue to develop hybrids, plug-in hybrids, and hydrogen fuel cell vehicles, totaling 8 trillion yen. Toyota is expected to introduce 30 pure electric models by 2030 and sell 3.5 million electric vehicles per year. Among them, the Lexus brand plans to sell all electric vehicles in China, Europe and North America by 2030, and achieve full electrification worldwide by 2035.
Volkswagen, which is indistinguishable from Toyota, announced a new round of plans on December 9, preparing to invest 159 billion euros over the next five years, of which 89 billion euros will be used in technologies such as software and electric vehicles. Volkswagen expects that by 2026, a quarter of the cars sold by the group will have pure electric systems.
In the face of Tesla's fierce attack, Toyota and Volkswagen, whose global annual sales are hovering around 10 million vehicles, feel the pressure, not only the market value has been exceeded, but the future market will also be accelerated. On the smart car track, Tesla and "Wei Xiaoli" and other new car-making forces rush forward without any restraints, and with the arrival of the revolution in automation and electric mobility, once the inflection point appears, it may grow exponentially.
"Tesla CEO Musk has announced that it will achieve annual sales of 20 million vehicles by 2030, which sounds incredible, but judging by its technological innovation, operating model and the speed of development in markets such as China, this arrogant goal may be achieved." A senior executive of a car company said this to the first financial reporter.
For years, Toyota and Volkswagen have been in full swing, but it is difficult to predict that the biggest competitor in the future will be Tesla. Tesla was on the verge of bankruptcy, and in 2007 Toyota invested $50 million to acquire a 3% stake in Tesla and sold an abandoned factory in Fremont, near Silicon Valley, to Tesla. It was Toyota that injected money as well as provided the factory that Made Tesla through the storm. However, Toyota sold all of Tesla's shares in 2017, completely ending its cooperation with Tesla, and Tesla has gradually become full. Thanks to the Model 3, which was domestically launched in China last year, and the model Y, a new domestic model added this year, tesla's Shanghai gigafactory sold 413283 vehicles in the first 11 months, of which domestic sales were 251225 units and export orders were 162058 units. A Tesla executive said on social media on Monday that the company is working toward a target of 500,000 units a year at its Shanghai factory by the end of the year, which is almost equivalent to Tesla's global sales last year.
According to foreign media reports, Ford CEO Jim Farley praised Tesla at an internal meeting last month. He believes Tesla's direct sales model, strong knowledge of the electric powertrain, and the simple construction of Tesla vehicles are the keys to its success. The most important thing is Tesla's application of electronic components, so that the electronic and electrical architecture can be upgraded, and at the same time, it can start mass production on a large scale.
In fact, not only for Ford's CEO who affirmed Tesla, but also Volkswagen CEO Herbert Diess, who acknowledged at an internal communication meeting that Tesla's software was ahead of Volkswagen and other automakers, and called Tesla's lead a "headache" for him. In order to narrow the software gap with Tesla, the Volkswagen Group is implementing the "Tesla Catch-up Program" within the Group. Ford Mustang Mach-E project engineers have also commented that Tesla's technology and engineering in batteries and high-voltage electronics, and its ability to control these technologies, are five years ahead of the industry.
Tesla continues to innovate, and this year it shared the Model Y production line of its Shanghai Gigafactory on Weibo. What is different is that an oversized die casting machine is installed in the production line, which can produce large die casting parts for one-piece molding vehicles, combining the original 70 parts into 2 large parts, and even merging into one piece in the future. Tesla, which has innovated in many ways, has continuously expanded its scale, improved efficiency and reduced costs, so that traditional car companies have re-examined their development direction and collectively begun to fight back under pressure. In addition to Toyota and Volkswagen, traditional giants such as Ford, General Motors, Honda, and Nissan have also launched new electrification strategies. Jim Farley even called out in a recent interview with the media that Ford wants to surpass Tesla in the sales of electric vehicles in the United States.
Enter the new battlefield of smart cars
As the world's largest new energy vehicle market, China has become the main battlefield for major car companies to compete.
BYD has been the biggest beneficiary of domestic subsidy policies for many years, and this year is expected to continue to maintain its position as the owner of domestic new energy vehicles, with cumulative sales of new energy vehicles in the first 11 months of 509,800 units, of which 91,200 units were sold in November. With bydir, GAC, Great Wall, Changan, BAIC, Geely and other mainstream independent car companies have completed the construction of special platforms for electrification, accelerated the launch of new technologies and new models, and new car-making forces such as "Wei Xiaoli" have accelerated their progress in the intelligent car track, coupled with BAIC, Dongfeng, SAIC and other automobile groups have launched high-end sub-brands such as Jihu, Lantu and Zhiji respectively, the brand has achieved initial results, and the overall advantages of the independent camp in the field of new energy have been highlighted. In November, among the top ten domestic new energy manufacturers sold, in addition to SAIC-GM-Wuling and Tesla, the other eight are independent car companies, while the joint ventures of Toyota and Volkswagen are still on the list. Tesla's catfish effect in China has stimulated the collective morale of independent car companies.
According to the latest data from the Association, in November, the penetration rate of independent brand new energy vehicles was 33.2%, that of luxury cars was 4.6%, while that of mainstream joint venture brands was only 3.9%. However, as multinational car companies collectively launch a retaliatory counterattack, a number of heavy pure electric new models such as Toyota bZ4X will be launched in China next year, whether it is Tesla or independent car companies, will usher in a strong opponent.
For the trend in 2022, Chen Qingtai, chairman of the China Electric Vehicle Hundred Association, recently said that next year's subsidy decline is a hurdle, the so-called policy subsidies have retreated, non-subsidy support is still some, the industrialization of new energy vehicles to go through three stages, the first is the policy-driven stage, the second stage is the policy + market-driven stage, and now begin to enter the third stage of market-driven.
In Chen Qingtai's view, this automotive revolution, the first half is electrification, and then enter a more competitive stage, to turn to low-carbon, intelligent, networked. In fuel vehicles, the Chinese market is an important competitive market in the world, and now the new energy vehicles have also changed from the original competition of Mainly Chinese car companies in the local automobile market to the global competition of global car companies in the field of new energy, and international big brands have begun to collectively exert efforts in China.
In the future, independent car companies, Tesla and joint venture brands that increase firepower are fighting, there are a variety of voices in the industry, some views believe that Nokia and other three traditional mobile phone giants are going to decline, the mobile phone industry this scene will also repeat the car industry, Tesla and "Wei Xiaoli" and other new car-making forces that have taken a step ahead on the smart car track will usher in a "blowout period"; some views believe that Toyota, Volkswagen and other multinational car companies that have been around for decades and hundreds of years, with strong technology and capital reserves, have been waiting for the wind to come. Once the real force, Ginger is still old spicy; some views believe that smart cars have just begun, Baidu, Millet, Apple and other Internet giants to enter, will likely be a late strike.
The Economist points out that in industries like computers and mobile phones that have undergone market disruption, innovators will build a new product from scratch, like Tesla and Apple. But once such a product is put on the market, it can be copied and outsourced. Volkswagen's vertical strategy suggests it will follow the same style of play.
Volkswagen, like Tesla, is vertically integrating its supply chain from batteries to chassis to software to accelerate the pace of innovation. Dies believes that the long life cycle of cars gives car companies more time to catch up than manufacturers of personal computers and smartphones.
"Europe has not produced local Internet giants, European car companies generally lack the seeds of the Internet, and the traditional car giants have many rules and regulations, bloated organizational structures, and cumbersome institutional processes, which will become the resistance to electrification and intelligent change." An industry insider said in an interview with the first financial reporter. He has served as an executive in a traditional multinational car company, but the process of promoting electrification reform has not been smooth.
Even Diess, in the process of Volkswagen's promotion of electrification, has encountered pressure from unions and other aspects due to the adjustment of personnel involved. Although Toyota Akio has the right to speak in Toyota, toyota is similar to volkswagen's situation, the historical burden is heavy, the elephant is difficult to turn around, and its current sacrifice of the car sea tactics, the industry has mixed praise, the future depends on the implementation of this tactic.
From the competition of internal combustion engines to batteries, motors, electronic controls and other technologies, to the competition of AI, intelligent cockpit, lidar, algorithms, computing power and data technologies, car companies will launch multi-line fierce battles in software and hardware. At present, the rise of the concept of metaversity, the future in the world of virtual and real, technology iteration is accelerating, with Apple, Baidu, Millet and other Internet giants have entered, Huawei and other technology giants have also deeply penetrated into the automotive industry chain, the future automotive field or like science fiction films as strange, making it difficult to guess the results.