2021 Automotive Industry "Butterfly Change": Market Inflection Point and Pattern Reshaping

The wave of change in the automotive industry is magnificent in 2021.

After years of continuous discussion, advance layout, and product introduction, new energy vehicles will enter a period of rapid growth in 2021. One of the most convincing figures is that the penetration rate of new energy passenger cars in November 2021 reached about 20.84%, compared with 5.8% in 2020. In December 2021, Wang Chuanfu, chairman of BYD Co., Ltd. (hereinafter referred to as "BYD"), said in an analysis to the media, including China Business Daily, that this penetration rate may exceed 35% at the end of 2022.

What is more alarming to car companies is that in addition to the promotion of new energy, the intelligent transformation of automobiles is also menacing. "The future of intelligent electric vehicles will be a bigger mother ecology than before", in October 2021, Yu Kai, founder and CEO of Beijing Horizon Robot Technology Research and Development Co., Ltd. (hereinafter referred to as "Horizon"), and Zhao Fuquan, dean of the Institute of Automotive Industry and Technology Strategy of Tsinghua University, said that he judged that the future mother ecology of smart cars will surpass the mother ecology of personal computers and smartphones, becoming the largest mother ecology in the industry.

Although the end game of intelligent cars is still chaotic, the direction of intelligent driving and intelligent cockpits has been clear, superimposed on the new energy revolution, and the lidar, domain controller, and power battery industries will advance in 2021, which is referred to as "the first year of autonomous driving commercialization" and "the first year of lidar mass production". It is worth noting that the rapid growth of the industry is also facing "pain", in 2021, with Tesla encountering rights protection incidents, intelligent driving has been corrected, and the problem of electric vehicle charging difficulties during the National Day period is also out of the circle.

Some industrial logic is facing change. As the core component of electric vehicles, will the power battery be owned and controlled by the head car companies like the internal combustion engine, or will it form a giant alone? As one of the core technologies of future cars, should intelligence rely on suppliers or self-research? Under the wave of change, what shareholders and shareholding forms will car companies in the era of "new joint venture" have?

Participants in the automotive industry, whether it is state-owned head car companies, private head car companies, new forces, or Huawei, Horizon, Ningde Times New Energy Technology Co., Ltd. (hereinafter referred to as "Ningde Times") and other intelligent electric vehicles head suppliers, are trying to explore these issues in 2021, and some new models and forces will undoubtedly sprout, grow and break through in these explorations.

"Inflection Point"

The penetration rate of new energy vehicles in 2021 will grow far beyond the industry's expectations.

As early as the beginning of 2021, the sales of new energy passenger vehicles predicted by the Association of Automobile Associations in 2021 will be 1.5 million units, but at the practical level, the sales of new energy vehicles from January to November 2021 will be 2.514 million units, far exceeding the industry's forecast. Stretching the time line, the penetration rate of new domestic new energy passenger cars in 2017-2020 is about 2.36%, 4.44%, 4.95% and 5.76%, respectively, about 13.95% in the first 11 months of 2021, and about 20.84% in a single month in November.

Why is penetration increasing so fast? He Xiaopeng, chairman of Xiaopeng Automobile Co., Ltd. (hereinafter referred to as "Xiaopeng Automobile"), previously gave the answer that once the to C share of new energy vehicles reaches 10% in large cities, market acceptance will change. A few days ago, Li Jinyong, executive president of the Automobile Dealers Chamber of Commerce of the All-China Federation of Industry and Commerce, said when analyzing the performance of domestic new energy vehicles, the first three quarters of 2021 are mainly B/C-class cars for the C-end market, and the proportion of A00 grades superimposed as a scooter has reached 62%, compared with the new energy vehicles before 2019, more rely on the A-class cars facing the B-end.

Specific to the enterprise level, taking The rapid promotion speed and mainly C-end customers of Weilai Automobile, Ideal Automobile, and Xiaopeng Automobile as an example, in November 2021, all three of them sold more than 10,000 vehicles, which attracted market attention, and the three are rapidly launching products with higher intelligent capabilities, such as Weilai ET5, Xiaopeng P5, etc. Taking Xiaopeng Automobile as an example, it plans to lay out more than 350 sales stores by the end of 2021, while at the end of 2020, this figure is still 160.

It is worth noting that behind the rapid growth period of new energy vehicles and intelligent vehicles, they are also facing "pain".

In terms of intelligent driving, in April 2021, Tesla, which suffered from rights protection at the Shanghai Auto Show, fell into the vortex of "brake failure", and Tesla's intelligent driving was widely discussed; in July 2021, Su Jing, then president of Huawei's BU intelligent driving product line, pushed intelligent driving to the center of public opinion; in August 2021, a news that "a traffic accident occurred when The founder of Meiyihao, Lin Wenqin, enabled the NOP pilot function of Weilai" once again pushed intelligent driving to the forefront.

In terms of endurance and energy replenishment anxiety, at the beginning of 2021, electric vehicles were on the hot search due to the severe cold in North China, and the phenomenon of large attenuation of the mileage was generally concentrated on the news hotspot; during the National Day in October 2021, pure electric vehicles "car owners charged at high speed for 1 hour and queued for 4 hours" were on the hot search.

With the anxiety of endurance and energy replenishment, car companies that lay out hybrid routes have also begun to exert their strength.

In January 2021, bydir's DM-i hybrid platform was launched, and Wang Chuanfu personally appeared on its platform, saying that "we want to let the DM-i super hybrid model enter the market segment where traditional fuel vehicles are absolutely dominant." From the performance point of view, from January to October 2021, BYD's plug-in and hybrid model sales were 184,400 units, compared with 32,600 units in the same period last year, an increase of 465.11% year-on-year.

Before 2021, the domestic hybrid market is more occupied by the "two fields", although domestic car companies have layout and release models, but from the sales point of view, basically not recognized by the market, compared to the noise of pure electric technology routes, the hybrid route can be described as "cold". However, this situation will change in 2021.

In terms of GAC Trumpchi, Guangzhou Automobile Group Co., Ltd. (hereinafter referred to as "GAC Group") shouted in the first half of 2021 to build "China's strongest hybrid technology platform", and in December 2021, GAC Trumpchi launched its flagship model with Toyota Hybrid System for the first time. In terms of joint venture brands, taking Dongfeng Nissan as an example, in November 2021, Nissan's first e-power model into China was officially launched and officially delivered in December. According to the introduction, by 2025, it will complete the launch of 10 electric drive models.

Under the wave of smart electric vehicles, Toyota and Honda also seem to be "in a hurry". In December 2021, Toyota released 15 pure electric vehicles in one go, which was temporarily screened in the industry. Earlier in October 2021, Honda China, GAC Honda and Dongfeng Honda jointly held the Honda China Electrification Strategy Conference, releasing a new pure electric vehicle brand "e:N" and 5 models.

It is particularly noteworthy that the automotive industry will usher in the entry of leading technology companies in 2021.

In January 2021, Baidu officially announced the construction of the car and carried out strategic cooperation with Geely. In March 2021, Jidu Automobile Co., Ltd. (hereinafter referred to as "Jidu Automobile") was established, and Tianyancha showed that Jidu Automobile was 55% owned by Baidu and 45% by Geely's subsidiaries, and the model of joint car manufacturing between the two parties was more special.

"This will be the last major entrepreneurial project of my life. I am willing to bet all the reputation of my life, personally lead the team, and fight for Xiaomi car", around March 2021, Xiaomi officially announced the construction of the car, the first phase of investment is 10 billion yuan, is expected to invest 10 billion US dollars in the next 10 years, Lei Jun is even shouting "fighting for Xiaomi car".

"Explore"

With the rapid growth period of new energy vehicles and intelligent vehicles, some explorations are also quietly occurring.

In June 2021, Lantu, a high-end new energy vehicle brand under Dongfeng Motor Group Co., Ltd. (hereinafter referred to as "Dongfeng Motor"), established an independent legal person company and introduced a core employee shareholding platform. At that time, dongfeng motor and lantu management said that lantu carried the mission of exploring a new model of independent brand development, and would introduce strategic investors in the future and explore more possibilities in the capital market.

Compared with Lantu, Zhiji, a subsidiary of SAIC Motor Group Co., Ltd. (hereinafter referred to as "SAIC"), registered its company in December 2020, and also introduced the core employee shareholding platform, and introduced the shareholdings of Alibaba and Shanghai Zhangjiang Hi-Tech Park Development Co., Ltd.;

It is worth mentioning that the tentacles of Avita exploration under Chongqing Changan Automobile Co., Ltd. (hereinafter referred to as "Changan Automobile") have reached farther. In November 2021, Avita completed the capital increase, as a power battery head supplier of Ningde Era, entered the market to become the second largest shareholder, the much-concerned Huawei did not appear in the list of shareholders, Changan Automobile although the largest shareholder, but gave up control, which is obviously different from Lantu, Zhiji, and E-An are still controlled by the car company group.

Overall, these state-owned new energy independent brands have tried to divest from the car enterprise group to seek independent development, and management shareholding has also become the general direction. In the past era of fuel vehicles, due to the long period of "the historical stage of market replacement technology", the fuel independent brands of these car group groups are often included in the group level, and there is a characteristic of "joint venture to cultivate autonomy".

In the view of auto analyst Ren Wanfu, these measures are active explorations of state-owned enterprise reform into deep water areas. A person who has been working in the head joint venture car company for a long time said in the communication, "The advantage of state-owned brands lies in the forward-looking policy, as policy makers or participants, they always explore the future direction before others."

The reporter of China Business Daily noted that the ICT industry and the automobile industry are also integrated in a variety of ways.

In addition to Alibaba's direct investment in Zhiji Automobile, Huawei's cooperation with car companies is quite interesting, it did not participate in car companies, but gave out three cooperation models: automotive platform suppliers, system solution suppliers, and component suppliers, of which the first cooperation is the closest, Huawei provides full-stack solutions, also known as Huawei inside model. At present, Huawei has adopted this cooperation model with GAC, Changan, and BAIC in China.

In addition to the head car companies, some smaller car companies are also trying to break through. In December 2021, Xilis, a subsidiary of Chongqing Xiaokang Industrial Group Co., Ltd., leveraged Huawei to launch the smart car brand AITO, shouting out the industrial integration with ICT giant Huawei as a car company, and the brand's first model was launched that month, from product design to smart cockpit, Huawei has been deeply empowered.

It is also worth mentioning that Hon Hai Precision Industries Co., Ltd. in Taiwan (more commonly known as "Foxconn" in the mainland) is still promoting its own car-making model.

According to foxconn's external release of car-making routes and market positioning, in the face of the era of intelligent electric vehicles, it intends to create a new cooperation model, through the establishment of alliances to create a set of hardware chassis and software systems, and then output to car companies, reduce the threshold of car manufacturing and conform to the open trend of the industry. In October 2021, three of its reference prototypes were officially launched. However, as of now, Foxconn's model still needs to be tested by time.