Author 丨 Zhang Yuzhe
Core ideas
Time to 2022, all aspects of automobile manufacturing have been "shortcuts";
Businesses that do not target large-scale sales are more likely to achieve their intended goals;
When the automotive industry chain continues to be decoupled, car manufacturing is also expected to move towards democratization.
2022 has just begun, and the heat of car building has risen again.
On February 11, Lixun Precision announced that its controlling shareholder, Luxun Limited, had purchased 19.88% of chery Holdings, 7.87% of Chery and 6.24% of Chery New Energy for 10.054 billion yuan. At the same time, the company also announced that it plans to jointly establish a joint venture with Chery New Energy to develop and manufacture new energy vehicles.
A weekend apart, according to Taiwan media reports on February 14, as Foxconn's first electric model bus Model T will be officially delivered in early March.
Throughout January, there was an average weekly disclosure of car-making news from new entrants. At the beginning of the month, Tuanche Network announced the construction of cars, but it did not arouse the industry's large-scale attention. 10 days later, Ideal Auto founder Li Xiang pushed the "car-making newcomer" to the center of the whirlpool of public opinion with a weibo full of doubts.
In the same week of the hot search on the tuanche network, the NIUTRON (Niu Innovative Energy) brand founded by Li Yinan, the founder of the two-wheeled electric vehicle company Xiaoniu Electric, released the official map of its first model self-touring home NV. Less than 10 days ago, Jidu Automobile, a joint venture between Baidu and Geely Automobile, announced the completion of a $400 million Series A financing.
Self-traveling NV/Source: Niu Innovative Energy
On January 30, Beijing released the "2022 Municipal Government Work Report Key Task List", showing that Xiaomi Automobile Manufacturing Plant and other projects will start construction in Beijing within the year.
Since 2021, a number of giant enterprises have entered the game of car manufacturing. The automobile manufacturing industry, once known as the "jewel in the crown of modern industry", has now dropped rapidly?
From a technical point of view, it is true. But from a business perspective, this is not the case.
01Building cars, it is getting easier and easier
From the beginning of the automotive industry to the era of electrification, the threshold for car manufacturing has been continuously lowered.
In early 2014, Tesla had just entered the Chinese market, which for the first time made Chinese understand what a real "smart car" looked like, and also allowed Chinese to discover the opportunity for "laymen" to build more competitive cars.
After obtaining Tesla's "enlightenment", hundreds of companies have embarked on the road of car building in less than three years. "Wei Xiaoli" (Weilai, Xiaopeng, Ideal) is the representative enterprise of the new car-making forces born in that period.
At that time, the car-making fever came from the emergence of electrification and intelligent air outlets in the automobile industry on the one hand, and on the other hand, it also came from the decline in technical difficulty when the automotive power system moved from nitro to electric.
The reduction in difficulty brought about by electrification only involves the powertrain, and the threshold in other technical areas is still there. But as the clock moves towards 2022, all aspects of the entire automotive manufacturing have "shortcuts".
At the 2019 Shanghai Auto Show, Huawei officially announced its entry into the automotive industry, focusing on becoming an incremental component supplier. The Chinese tech giant can help car companies solve almost all problems involving autonomous driving, intelligent interaction, and electric drive systems. At present, the in-depth cooperation with Huawei (Huawei Inside) has reached BAIC Polar Fox, Changan Avita and GUANGZHOU AUTOMOBILE Group.
Polar Fox αS Huawei HI version / Source: Pole Fox Auto Official
If you are worried that Huawei is the only one, companies can also hand over the three major systems of automatic driving, intelligent interaction and electric drive to relevant professional suppliers. And the battery can also be completely completed by suppliers such as Ningde times to help you. When new technologies are done by other partners, only the chassis needs to be developed by themselves.
Nowadays, the problem of the chassis can also be solved by suppliers.
On January 11, Yo-Run Technology released the UP Super Chassis and 3 UP SPACE Super Cabins based on the skateboard chassis concept. Li Peng, the founder of the company, said that in the era of automobile 2.0, cars will evolve to a smarter, more personalized, scene-driven mobile intelligent space, which relies on a skateboard chassis that completely decouples the upper and lower vehicles.
When the design and development of the vehicle is completed by the partners, there are also foundries such as Magna, Foxconn, and Luxun Precision that can provide mass production services, helping you save time and money to build your own factory.
To put it simply, if there is no problem at the capital level, the brand side can create its own brand of smart electric vehicles as long as it defines the product.
But, so what? It is still very difficult to rely on car building for commercial success.
02 Building a car is only the first step
History proves that the relationship between having the ability to build cars and becoming a stable car company is not the same.
Less than half of the hundreds of car companies founded between 2014 and 2017 are still alive, and only six will achieve annual sales of more than 10,000 in 2021.
"Even if it's 'Wei Xiaoli', it is good to survive two families in the end." Some auto industry veterans expressed this view on Eo Motors.
What exactly limits automakers' success? The main problem is "money".
Li Bin, founder, chairman and CEO of Weilai Automobile, and He Xiaopeng, chairman and CEO of Xiaopeng Automobile, have all said that the capital threshold for car manufacturing is 20 billion yuan. In 2021, Li Bin "updated" the threshold height of car building: "Now there is no 40 billion (yuan) may not be able to do it." ”
NIO ET5/Source: NIO official
Although the threshold of 40 billion yuan is not absolute, building a car is definitely a very "money-burning" thing.
Developing just one competitive smart electric car would mean a lot of money. Even without a fuel-powered system, smart cars need more than 20,000 parts. "Vehicle grade" almost means the most stringent standards for large-scale manufacturing.
Although it is enough to spend money on developing a vehicle, this is only a small part of the entire process of building a car. When cars are brought to market, it's really time to spend money. Procurement, production, channels, services... The need for funds for any one process is like a faucet that cannot be turned off.
At the same time, companies also need to continue to invest in the research and development of new models and new technologies, resulting in an extremely long payback period.
As of 2022, "Wei Xiaoli", as a new force in China's leading car manufacturing, has not yet got rid of the problem of loss. Even Tesla, which currently has a market capitalization of nearly a trillion US dollars, has repeatedly gone bankrupt, and its first full-year profit is 17 years after its establishment.
In the case that its own development is not easy, the "inner volume" of peers is still very serious.
The competition of car companies in technology and configuration has never stopped. As the industry moves towards intelligence, the "arms race" of car companies has penetrated into the field of extremely expensive chips, lidar and other intelligent components, resulting in the development and sales costs of vehicles rising again.
This means that car manufacturing not only has to endure extremely high costs and extremely long payback periods, but also the final return on investment is also very limited.
Many companies eventually break the capital chain because the previous path was not right.
Many companies eventually die due to lack of accurate product positioning or improper use of funds, such as Future Auto and Byton Auto. The former's acceleration capacity designed for its supercar models is even less than that of some SUVs, while the latter's 300-person team spends up to 50 million yuan in annual retail spending.
Of course, the death of more new car-making forces is due to too late entry, lack of competition thresholds, and business logic that cannot withstand the test. Most of them have embarked on the "Nai Ho Bridge" before they can really embark on the "car-building road".
03Building a car, you have to find the threshold
At the end of 2021, He Xiaopeng said that 2024 is the final window period for this round of car-making wind outlets. In this context, what are the characteristics of a new entrant who has the opportunity to win the game?
First, there must be sufficient funds to deal with a series of changes that may occur in the market in the future. Second, at least have advantageous technologies that meet the needs of the relevant market segments or can empower the industrial ecology of automotive products.
At present, the new car-making forces in the first echelon have their own unique competitive advantages: Weilai has innovated user services, Xiaopeng has labeled science and technology, and ideal has captured the psychology of "Daddy" users.
Ideal ONE/Image Source: Ideal Car Official
Apple entered the automotive industry because it has a strong and closed-loop intelligent ecosystem. This ecosystem not only includes hardware ecology such as computers, smart phones, and smart watches, but also includes software ecosystems built by IOS systems, Apple IDs, and app stores.
Thinking more in the long term, it is easier for businesses that do not aim for large-scale sales to achieve their intended goals. What we are talking about here is not those companies that increase the valuation by increasing the car manufacturing business, but those that maximize their individual needs through customization.
Different companies have their own different needs, but many companies' personalized needs for mobile space eventually become "ok". Because their needs can only be through the modification of certain production models.
With the emergence of more and more incremental component suppliers that promote the decoupling of the industrial chain, such as skateboard chassis and automatic driving, the difficulty and cost of landing some customized requirements will become lower.
"It may take time for skateboard chassis to become mainstream in the industry, but it represents a trend in the automotive industry." Jiang Hongquan, chairman of Boyuan Capital, a subsidiary of Bosch Group, said in communication with Yiou Automobile that when the automotive industry chain is constantly decoupled, car manufacturing is also expected to be democratized in the future, thus driving the entire automotive industry pattern to be changed.
When companies only need to think about their own needs, the so-called goal attainment route becomes extremely clear. At the same time, related custom vehicles can also reduce product development and procurement costs by eliminating other modules that are not related to customization needs.
If the features of the company's customized product can meet the needs of the enterprise, and the cost is within the affordable range, it is already considered successful. Once the products produced end up gaining external favor, it means that companies have the opportunity to earn additional revenue.
04 Conclusion
Entering the automobile industry, building a car is the most difficult road.
Just like Apple in the field of mobile phone manufacturing, there is only one Tesla in the field of automobile manufacturing. Before thinking about how to surpass Tesla, we should first think about how to deal with the problems of large investment amounts, long payback periods, low input-output ratios, and whether sales can meet expectations.
Tesla Model Y/Image Source: Tesla Official
The trend of multi-industry integration is moving fast in the automotive industry. With the addition of more technological elements, the automotive industry will also become more and more open. In addition to car manufacturing, using the advantages of hardware, technology, software ecology and other advantages to enter the automotive industry, there are also opportunities to obtain considerable returns.
Huawei, which has technological and ecological advantages, has chosen to empower car manufacturing with the role of incremental component service provider, and strives to promote the integration of Hongmeng ecology into the products of other car companies. The same choice is made by 360, DJI and other technology companies.
Opening your eyes, the opportunities brought by the development of the automotive mobility industry are far more than just car manufacturing.