1 Automobile intelligence: electric drive, industry trend established
The global & Chinese electric passenger car market is expected to enter the accelerated introduction period. In 2021, global and domestic new energy vehicle sales were 6.39/3.52 million units (+97% and +158% year-on-year, respectively), corresponding to penetration rates of 7% and 13%, respectively. We expect global and China new energy vehicle sales to grow to 22.93 million units and 13 million units by 2025, respectively, with corresponding penetration rates of 24% and 38% respectively. Passenger cars as the largest market segment, in 2021 and China new energy passenger car sales of 5.96 million units, 3.32 million units, corresponding to the market penetration rate of 9.9%, 15.5%, we expect that in 2025, global & China passenger car new energy vehicle sales will increase to 21.94 million units, 12.58 million units, corresponding to the penetration rate of 32%, 42%.
We believe that electrification as an ideal carrier of intelligence, superimposed on the joint efforts of OEMs, industrial supporting facilities, policies and other levels, automotive intelligence is entering a period of accelerated introduction. The main reasons include the following:
(1) Automotive electrical and electronic architecture has evolved from distributed to domain-centralized and central computing architecture, and soft and hard decoupling has promoted software-defined automobiles to become an inevitable trend.
From the perspective of the development history of automotive electronic and electrical architecture, (a) in the past, it mainly used to use a single point-to-point communication method, that is, a specific function in the automotive field, mainly relying on a specific ECU to achieve. (b) At present, the distributed hierarchical domain architecture has become mainstream. With the increase in automotive capabilities, the functions between different ECUs began to be integrated, and the concept of domain controllers began to emerge and gradually became mainstream. (c) In the future, we believe that with the realization of advanced automatic driving and the further increase in the concentration of power management systems, higher requirements have been put forward for on-board computing power, data transmission bandwidth, etc., and the requirements for the computing power and data transmission capacity of domain controllers have also been continuously improved.
From the perspective of product technology development, the result of automotive intelligence is the realization of more comprehensive functions based on intelligent driving, intelligent cockpit, etc. And these intelligent functions are inseparable from the support of software and hardware, and even more inseparable from the support of electronic and electrical architecture. The electronic and electrical architecture in traditional cars is difficult to meet the needs of intelligence. Under the trend of increasingly complex automobile functions, especially the emergence and development of intelligent cockpits, autonomous driving, Internet of Things, V2X, and smart cities, car companies are forced to innovate in electronic and electrical architecture. At this stage, the best carrier for cross-domain centralized architecture is electric vehicles.
(2) The maturity of hardware technology and scale effects have driven the cost of core sensors downward. The sharp increase in sales of smart cars has led to the dilution of core sensor & device costs (lidar, in-vehicle CIS, etc.), and the downward trend of various sensor costs is significant. Compared with fuel vehicles, electric vehicles are naturally the best carrier of intelligence. With the reduction of hardware costs such as in-vehicle cameras, lidar, and millimeter-wave radar, more ADAS driver assistance functions have been introduced into smart cars, and the development of automotive intelligence is expected to further accelerate.
Car cameras: According to the data of Zhiyan Consulting, the monocular car cameras decreased from $36/ in 2010 to $19/ in 2018, a drop of 47.2%; the future is expected to be reduced from $19/ in 2018 to $14/ in 2025, and the decline is expected to continue to decline by 26.3%.
Vehicle-mounted lidar: ICVTank data shows that vehicle-mounted lidar is expected to be reduced from $20,000 in 2018 to $500/unit in 2025, a drop of 97.5%;
Vehicle-mounted ultrasonic radar: ICVTank data shows that vehicle-mounted ultrasonic radar is expected to be reduced from 15 US dollars in 2018 to 10 US dollars / each in 2025, a decrease of 33.3%.
(3) Head manufacturers increase the layout in the field of automotive intelligence, and the penetration rate of high-level automatic driving is expected to increase rapidly. Under the tide of electrification and intelligence of the global automotive industry, new car-making forces, technology giants, consumer electronics manufacturers, etc. have entered the field, further accelerating the speed of industrial development. According to the planning of downstream OEMs, we expect that the penetration rate of L1/2, L3 and L4/5 in the global and domestic passenger car markets is expected to increase from 45.9%/0.1%/0%, 46.9%/0.1%/0% in 2021 to 57.6%/7.5%/1.1%, 58.6%/8.5%/1.5% in 2025. Among them, it is estimated that the penetration rate of global L3-L5 automatic driving will be about 8.6% in 2025, and the penetration rate of L3-L5 automatic driving in China will be about 10%.
2 The new forces of car manufacturing have begun to take shape, and technology companies have accelerated their layout
Up to now, three forces have converged in the intelligent electric vehicle market, new car-making forces have begun to take shape, and technology companies have accelerated their layout. The first is the new forces of car manufacturing represented by Tesla, Weilai, Xiaopeng and Ideal, and the other is the new technology enterprises that have accelerated their entry, such as Xiaomi Group, Baidu, Huawei, Hon Hai Technology Group, and companies that may potentially enter the game, such as Apple. Third, after the awakening of traditional car companies, accelerate investment and product launch in the field of intelligent electric vehicles. With the gradual maturity of smart car technology and product end, the price of vehicles and traffic has dropped; the use scenarios and habits of smart devices have gradually developed, and the demand side has gradually risen. In 2021, global smart car sales will exceed the order of one million, approaching the tipping point of popularization. At present, new forces, science and technology giants, etc., are actively participating in the global automotive intelligent process, while traditional car manufacturers are relatively slow.
Tesla: The global leader in intelligent electric vehicles
Tesla: The world's leader in smart cars, with cumulative sales of smart cars exceeding 2.3 million. As the world's leader in intelligent vehicles, the company has produced five models so far. Specifically, these include Roadster, Model S/X/3/Y (also known as SEXY combinations). Among them, Roadster is mainly produced in small batches to build the company's brand. The SEXY electric train portfolio is mainly used for mass production. In the future, the company still has a number of models such as Cybertruck and Semi in production capacity planning, and is expected to be mass-produced at the end of 2022 and 2023. By the end of 2021, according to Tesla's annual report, it has sold about 2.336 million cars worldwide, becoming the leader of the global smart car brand. Rapid sales volume increases The company's revenue continued to reach new highs, with full-year revenue of $53.8 billion (+71% year-on-year) in 2021, GAAP net profit of $5.519 billion (+666% year-on-year), corresponding to a net margin of 10.2%, and Non-GAAP net profit of $7.640 billion (+211% year-on-year), corresponding to a net margin of 14.2%.
New domestic and foreign car-making forces quickly followed
1. New overseas car manufacturing forces: Lucid and Rivian have increased their layout in the field of smart cars, and have positive guidance on orders in hand and future deliveries.
(1) Lucid: Product deliveries are expected to be 251,000 units in 2026. (a) Company Profile: The Company was incorporated in the United States in 2007 and renamed Lucid in 2016. The founder team comes from Tesla and Oracle, and has a deep technical background. Positioned as a manufacturer of luxury electric vehicles (which intends to produce more high-end electric vehicles than BMW, Audi and Mercedes-Benz, combining technology, sports and classics), the company's vision is to achieve a truly large-scale industrialization of electric vehicles and electric powertrains by developing state-of-the-art technologies. On February 22, 2021, Lucid announced the SPAC merger with Churchill Capital Corp IV, a special purpose acquisition company, on the NASDAQ in New York. On July 26, 2021, Lucid started trading on the NASDAQ.
(b) Model planning. Up to now, the company has launched a production sedan Lucid Air, with a total of dream edition, Grand Touring, Touring, Pure four models. In terms of model planning, the company plans to launch its second new SUV, Project Gravity, in 2023. (c) Capacity planning: The company currently has a plant in Arizona, USA (the first project was completed in December 2019), with a production capacity of 34,000 units/year, and is expected to start production in 2022. The company expects to build four plants by 2028, eventually reaching a capacity of 400,000 vehicles per year. (d) Future Operating Data & Financial Forecast: Lucid expects the company to deliver 20,000 vehicles in 2022 and 251,000 units in 2026 (CAGR=88%).
(2) Rivian: Abundant orders in hand. (a) Company Profile: Rivian is one of the most vertically integrated electric vehicle manufacturers in recent years, and even has its own dedicated charging infrastructure network, similar to Tesla's supercharger stations. Its mission is to "make the world full of adventure forever" and this gene is deeply engraved in every car. Headquartered in California, USA, the management is led by founder, Chairman and CEO Dr. Robert J. Scaringe, who has been with the company since the company's inception and received his Ph.D. in mechanical engineering from the MIT Sloan Automotive Laboratory.
(b) Product planning: The electric vehicle manufacturer currently provides the development and manufacture of electric pickups and SUVs for the consumer and commercial markets, and the product line includes R1T pickup trucks, R1S SUVs and EDV series commercial electric vans. (c) Sufficient orders in hand. According to the company's disclosure, as of the end of October 2021, Rivian has received a total of about 55,400 orders for R1T pickup trucks and R1S SUV models in the US and Canadian markets, and the company expects to be fully delivered by the end of 2023. To B, in September 2019, the company signed a cooperation agreement with Amazon: it will customize 100,000 electric car EDA vehicles for Amazon based on Rivian Auto's technology in batteries, Skateboard electric platforms, etc.
2, the new domestic car-making forces: in 2021, Weilai, Xiaopeng, ideal sales of 91,000, 98,000, 90,000 vehicles, we expect to grow to 180,000, 200,000, 180,000 in 2022, the first-mover advantage is significant.
(1) NIO: In 2021, the annual sales volume exceeded 90,000 vehicles, and the cumulative sales volume exceeded 160,000 vehicles. Founded in 2014 and headquartered in Shanghai, the company was successfully listed on the New York Stock Exchange in September 2018. By the end of 2021, the company has released a total of six models EP9, ES8, ES6, EC6, ET7 and ET5, of which EP9 is positioned in pure electric supercar, ES8, ES6 and EC6 are positioned in pure electric SUVs, ET7 is positioned in smart electric flagship sedans, and ET5 is positioned in intelligent pure electric coupes. Currently, the ES8, ES6 and EC6 have been delivered in bulk, with ET7 and ET5 expected to be delivered in 2022. According to the company's announcement, NIO's annual sales in 2021 reached 91,000 units, +109.1% year-on-year, of which ES8, ES6 and EC6 sales were 2.0, 4.1 and 30,000 units, respectively. By the end of 2021, THE CUMULATIVE DELIVERY OF WEILAI AUTOMOBILE WILL EXCEED 160,000 UNITS. In 2020 and the first three quarters of 2021, the total revenue of NIO was 16.26 billion yuan and 26.24 billion yuan, respectively, +207.8 and +172.8% year-on-year. In the first three quarters of 2021, the company's gross profit margin and net profit margin were 19.5% and -7.1%, respectively, and the loss was further narrowed and gradually approached breakeven.
(3) Ideal: 90,000 units will be sold in 2021, and the cumulative global sales volume will be 130,000 units. Founded in 2015 and headquartered in Beijing, the company was successfully listed on the NASDAQ in July 2020, formerly known as "Car and Home - Ideal". As an innovator in China's new energy vehicle market, Ideal Auto is mainly committed to the design, development, manufacture and sales of high-end intelligent electric SUVs, and provide safe, convenient and cost-effective travel solutions for families. Ideal is the first company in China to successfully commercialize a range-extended electric vehicle (EREV), and so far, the company has released a total of one car , the Ideal One.
According to the company's 2021 Q3 earnings call, the company intends to release its second model, the X01, in Q2 2022. By the end of 2021, the company's cumulative sales of smart vehicles are 120,000 units, of which 90,000 units will be delivered in 2021. The increase in sales volume led to an increase in the company's revenue and gross profit margin. In 2020 and the first three quarters of 2021, the company's revenue scale was 9.46 billion yuan and 16.39 billion yuan, respectively, +3225.6% and +208.7% year-on-year. The gross profit margin of Ideal Automobile in 2020 was 16.4%, and it further increased to 20.6% in the first three quarters of 2021, higher than that of domestic new forces. In terms of net profit margin, the company's 2020 and first three quarters of 2021 were -1.6% and -3.8%, respectively, and are expected to be the first in the domestic new forces to achieve profitability.
Technology companies run into the field and increase their layout in the field of smart cars
1. Luxshare Precision: Participated in Chery & established a joint venture company to lay the foundation for the future entry into the field of intelligent vehicles. In February 2022, the Company issued an announcement that (1) the entity of the listed company signed the Strategic Cooperation Framework Agreement with Chery Holdings, Chery Shares, and Chery New Energy in Wuhu, and the Company and Chery New Energy intend to jointly establish a joint venture company specializing in the research and development and manufacturing of new energy vehicles; (2) the Company's controlling shareholder, Lixun Co., Ltd., signed the Equity Transfer Framework Agreement with Qingdao Wudaokou, agreeing that Lixun Limited would purchase 19.88% of the equity of Chery Holdings and 7.87% of Chery's shares for 10.054 billion yuan. Equity and Chery New Energy 6.24% equity. After the completion of the transaction, Lixun Limited will not control Chery Holdings, Chery Shares and Chery New Energy for the time being.
2. Sony enters the field of intelligent electric vehicle manufacturing. At CES 2022, Sony brought a new pure electric SUV, the VISION-S 02 concept car, which will be equipped with an electric vehicle cloud platform, 5G vehicle networking technology and 40 sensors. Sony expects to provide a car with gaming and audio equipment to meet the entertainment needs of passengers. At the same time, Sony also announced at the exhibition that Sony Cars will be officially established this spring.
3. Hon Hai Group: In October 2021, Hon Hai Group officially released the pure electric vehicle brand - Foxtron, and disclosed the three new cars created by Hon Wah Advanced Company - Model C, Model E, model T. The company expects its first model, the Model C, to debut in 2023, and it expects the electric vehicle business to bring the company $230 billion in new business revenue in 2026.
Model C positions a pure electric medium-sized SUV, the car has a 4.64m length with a wheelbase of 2.86m, providing a spacious and comfortable space for 5+2 seats, as well as a rich storage space configuration, excellent space planning, can be shuttled in the crowded metropolitan area, but also enjoy the large car to have room to ride.
Model E is positioned as a pure electric medium and large car, which is the flagship electric passenger car extended by Honghua Advanced based on the characteristics of electric vehicle open platform modularization, elasticity and customization.
Model T positions pure electric buses, and the company expects deliveries to begin in March 2022.
4. Xiaomi will enter the car manufacturing or will be put into production in 2024, while increasing the relevant layout of the industrial chain.
(a) Xiaomi enters the field of car manufacturing. On March 30, 2021, Xiaomi announced that it intends to establish a wholly-owned subsidiary to be responsible for the smart electric vehicle business. With an initial investment of RMB 10 billion and an estimated investment of US$10 billion over the next 10 years, Lei Jun will also serve as CEO of the smart electric vehicle business. In August 2021, Xiaomi acquired DeepMotion Tech Limited, and subsequently plans to increase R&D investment in the field of autonomous driving. In November 2021, the signing ceremony between the Administrative Committee of Beijing Economic and Technological Development Zone and Xiaomi Science and Technology was held, and with the signing of the Cooperation Agreement between the two sides, Xiaomi Automobile was officially announced to settle in Beijing Economic Development Zone. Xiaomi Automobile Project will build Xiaomi Automobile Headquarters Base, Sales Headquarters, and R&D Headquarters, and will build a vehicle plant with an annual output of 300,000 units in two phases, of which the first and second phases of production capacity are 150,000 units, and the first car is expected to roll off the production line and achieve mass production in 2024.
(b) Xiaomi relies on investment entities such as Shunwei Capital, Xiaomi Group, and Xiaomi Yangtze River Industry Fund to actively lay out the layout of smart cars & autonomous driving related fields. Since 2020, Xiaomi has increased its investment and layout in autonomous driving and intelligent driving, involving OEMs, lidar and other sensors, autonomous driving software algorithms, chips and other fields. Among them, the main investors mainly include Shunwei Capital, Xiaomi Group, and Xiaomi Yangtze River Industry Fund.
Incomplete statistics, since 2020, Xiaomi has invested 54 times in the field of smart cars & autonomous driving, involving a total of 45 related companies, of which the cumulative number of investments in 2020 is 11 times, and the cumulative number of investments in the first three quarters of 2021 is 21 times.
5. Alibaba: Set up Zhiji Automobile and personally participate in car building. Alibaba's layout in the field of smart cars Began in 2015, and SAIC motor jointly established Zebra Zhixing, with the intention of developing an in-vehicle operation system that benchmarks Apple Carplay. In August 2020, Alibaba participated in the cornerstone wheel investment of Xiaopeng Motors, with an investment of 500 million US dollars. In addition, Alibaba has also invested in many companies in the field of intelligent transportation, such as Optibus, Qianfang Technology, Smart Changxing, Xinlian Technology, etc
In December 2020, SAIC Motor, Zhangjiang Hi-Tech and Ali Group injected 10 billion yuan to establish "Zhiji Automobile Technology Co., Ltd.", and Ali also began to build cars himself. Zhiji Automobile is invested by SAIC Motor for 5.4 billion yuan, holding 54% of the shares, Zhangjiang Hi-Tech and Alibaba each contributed 1.8 billion yuan, each holding 18%, and employees and users hold another 10% of the shares, of which 5.1% are ESOP (core employee shareholding platform) and 4.9% are CSOP (user rights platform). In terms of personnel, Zhiji Automobile is chaired by Wang Xiaoqiu, president of SAIC, Zu Xiangjie, vice president and chief engineer of SAIC, Yang Xiaodong, vice president of SAIC and general manager of passenger car company, Liu Ying, chairman of Zhangjiang Hi-Tech, and Zhang Jianfeng, president of Ali Damo Academy, respectively.
The three parties have joined hands to create a new brand of wisdom and self-reliance. SAIC Motor is the seventh largest automobile manufacturer in the world and the largest automobile manufacturer in China, and has given Zhiji Automobile "hard power" in terms of manufacturing capacity and supply chain capabilities. Alibaba has a deep accumulation in e-commerce and cloud computing, and can provide support for the company in terms of new retail and customer operations. Zhangjiang Hi-Tech has talent storage advantages in new energy-related fields such as chips, software, data, and intelligence.
Zhiji Automobile is positioned as a high-end intelligent pure electric vehicle brand, and is committed to creating a future way of travel with more advanced intelligent driving solutions. At present, the company mainly has two products: zhiji L7 positioned in luxury pure electric smart cars and zhiji LS7 positioned in luxury pure electric smart SUVs. On April 19, 2021, Zhiji Automobile debuted at the Shanghai Auto Show, showing the Zhiji L7 and Zhiji LS7 real cars, as well as a concept car Airo. Designed by renowned architecture firm Heatherwick Studio, Airo features a two-way door design with four separate seats for two seats, but no accessories such as the steering wheel and accelerator pedal of a traditional car.
6, Baidu autonomous driving: the direction of monetization is gradually clear, driving long-term growth. Baidu Autonomous Driving was incubated in the Baidu AI Lab led by Robin Li in 2013, and after 7 years of development, the business gradually covers L3 and L4 level autonomous driving business, as well as the Internet of Vehicles, intelligent transportation and other services, and established an open ecosystem for Apollo autonomous driving. After several years of development, Baidu has become the earliest and most accumulated autonomous driving leader among domestic Internet companies. After long-term business development and adjustment, it has gradually formed three major business sectors: shared unmanned vehicle (Apollo Go), automobile intelligence (ASD), and intelligent transportation (ACE), and will be established in 2021.
Shared unmanned vehicle Apollo Go: Independent brand release, the commercialization timeline is gradually clear. At the 2021 Baidu World Congress, the company released a new Robotaxi commercial brand "Radish Run", which means that Baidu Apollo Go has been fully accelerated. Referring to the domestic Robotaxi timetable, we expect that Baidu's shared unmanned vehicle business will carry out large-scale operations with safety personnel in 2023-2025, and then realize unmanned operation on the basis of law and V2X construction.
ASD: Focusing on the two major businesses of smart cabin and intelligent driving, TAM will be close to 400 billion yuan in 2025. According to Baidu's disclosure at the 2020 Apollo Ecosystem Conference, Baidu's ASD business mainly focuses on two parts: smart car entertainment, connected smart cabin business, and intelligent driving business with L2+ in conventional scenarios that can meet specific scenarios L4 (ANP). According to the company's calculations, the scale of the intelligent market is expected to reach the order of 400 billion yuan. With the upgrading of technology, the company expects that the intelligent penetration rate will exceed 70% in 2025, of which the penetration rate of intelligent driving will be close to 45%, which will open up huge growth space for the company's future business growth.
Vehicle-road collaboration: With the cloud and intelligent solutions as the carrier, the medium- and long-term TAM is considerable. On the software and network side, Baidu Vehicle-Road Collaboration closely combines the Apollo automotive system with the road testing system, integrates vehicle operation and road detection information, and further strengthens the intelligent ability of Baidu Apollo's on-board system at the road end. For local governments, the investment in intelligent transportation will bring a qualitative leap to the improvement of local transportation operation and management efficiency. According to Baidu's prediction at the 2021 World Congress, the penetration rate of intelligent transportation in China will reach 25% in 2025, and intelligence is expected to bring 100 billion yuan of TAM, and Baidu, as the earliest technology company to participate in related businesses, is expected to continue to benefit in the medium and long term.
Baidu and Geely build cars, which are expected to be launched at the end of 2023. On January 11, 2021, Baidu announced that it has partnered with Geely Holdings to form a smart electric vehicle company. According to Baidu's official disclosure and responses to the media, the new company is independent of Baidu's parent company system, covering the whole industry chain of design and development, manufacturing, sales and service. According to the disclosure and public response of Baidu's official website, the newly formed intelligent car company is led by Baidu, Geely Holdings is the sole external investor, and the new joint venture company is independent of Baidu's parent company system and maintains independent operation. On February 18, at Baidu's 2020 earnings conference call, chairman Robin Li said that the CEO and brand name of the new company have been determined, named Jidu Automobile. At CES 2022, Baidu and Jidu announced that the company's first model is expected to be available in 2023.
7. Huawei has entered the field of smart cars as a Tier 1, and its business scope has been continuously expanded.
(a) Huawei enters the field of smart cars with the Role of Tier 1. In June 2019, Ren Zhengfei issued a corporate organizational change document, and Huawei established the intelligent vehicle solution BU (Business Unit) department to enter the automotive field. Huawei said that the company does not build cars, but based on ICT technology, it has become an incremental parts supplier for intelligent and connected vehicles, and its business mainly covers five major business areas related to intelligent cars: intelligent cockpit, intelligent driving, intelligent networking, intelligent electric, and intelligent car cloud.
(b) The business scope has expanded from the production and sales of auto parts products to the auto sales business. Looking back at the company's layout in the field of intelligent vehicles, it can be seen that Huawei's layout in the field of intelligent electric vehicles has also changed accordingly with the change of organizational structure. Among them, the company's early products are mainly around the on-board communication module in the field of car networking. In 2018, Huawei released the MCD in-vehicle computing platform, and in 2019, it established the Automotive Solutions BU division to further enrich its product layout in the field of smart electric vehicles. At present, on the basis of the self-developed CC architecture, Huawei has successively launched the smart cockpit full-stack solution Huawei HiCar, MDC in-vehicle computing platform, lidar, 4D radar, 3-in-1 & all-in-one power system, HiCharge and other products, covering five major areas: intelligent driving, intelligent cockpit, intelligent electric, intelligent networking, and intelligent vehicle cloud. On April 19, 2021, Huawei's consumer official website listed the "Cyris SF5" jointly built with Xiaokang Co., Ltd., and the business scope was based on the original production and sales of auto parts products, and the new auto sales service was added.
8. Apple actively lays out the development of on-board intelligent system Craplay and unmanned software technology, and there is a possibility of entering the field of intelligent car manufacturing in the follow-up.
(a) In 2013, Apple launched the Carplay in-vehicle intelligent system, which connects the company's ecology in the field of Internet to smart cars.
(b) In 2014, the Titan project of autonomous driving was launched into the autonomous driving field.
Carplay's in-vehicle intelligence system has been used in more than 500 production models, covering in-car entertainment and navigation functions. As the traffic entrance of connected cars, global technology companies, OEMs and new car manufacturers have launched their own in-vehicle systems to seize the market. As of September 2020, Apple Carplay has partnered with 63 car companies around the world on more than 500 models, ranking in the first echelon of the world. Similarly, Alibaba's Zebra Smart Travel system cooperates with 8 car companies around the world on 31 models, and Tencent Car Alliance's TAI intelligent system cooperates with 45 car companies around the world on 28 models.
The Titan project actively integrates the smart car industry chain. In order to complete the above layout, Apple on the one hand actively improves the Apple Map function; on the other hand, actively integrates the industrial chain: in 2013, it acquired WiFiSlam, an indoor smartphone positioning company, established a partnership with Bosch in 2017, and held talks with the supplier of automatic driving LiDAR sensors in 2019.
Acquisition of Drive.ai to strengthen its presence in the field of high-level autonomous driving. Founded in April 2015, Drive.AI is primarily engaged in providing L4-level autonomous driving solutions using deep learning technology. Among them, Drive.ai was co-founded by 8 artificial intelligence researchers from stanford University's Artificial Intelligence Laboratory led by artificial intelligence expert Ng Enda, who was the developer of Google's development team Xlab (this team has been responsible for Google's unmanned driving car and Google Glass two well-known projects) and Baidu's chief scientist (mainly responsible for Baidu's autonomous driving business). In June 2019, Apple completed the acquisition of self-driving startup Drive.ai, the amount of which was not announced, to strengthen the technology layout in the field of high-level driverless.
3 Smartphone review: from feature phones to smart phones, the competitive landscape, business models and other drastic changes
From the history of the development of feature phones to smart phones, the market competition pattern has experienced a "first concentrated and then dispersed situation", the market share has been concentrated to the head, and Chinese manufacturers have obtained more than 40% of the market share, and we believe that the main reasons include:
(a) Reshaping the competitive landscape of the industry
(b) From the perspective of the change in the BOM cost structure, the functional upgrade has not brought about an increase in manufacturing difficulty;
(c) Turnkey solutions reduce mobile phone manufacturing costs and accelerate product iteration;
(d) China's strong market share gives related companies the opportunity to carry out rapid product iteration and then participate in global market competition.
1. The competitive landscape of the smartphone market is being reshaped. With the upgrading of mobile phones from functional machines to smart phones, the competitive landscape of the entire industry is undergoing a sudden change. Before Apple launched its first iPhone in 2007, Nokia had a long history of about 50% of the global market share. With the rapid increase in smartphone penetration in 2007, Nokia's market share decreased from 50% in 2007 to 0.6% in 2015, and Apple's market share increased from 3.1% in 2007 to 16.1% in 2015.
2. From the perspective of the change in the BOM cost structure of functional machines & smart phones, functional upgrades have not brought about an increase in manufacturing difficulty. With Nokia 1050 as the representative of the feature phone and Samsung Galaxy A9S/S10+/Fold as the representative of the smart phone, it can be seen that with the increase of the function of the smart phone, the BOM cost is mainly concentrated in the three major areas of display, motherboard & secondary board components (processors, RF chips, etc.), and structural parts, and the BOM cost accounts for more than 70%. The upgrade of the smartphone function has not brought about an increase in the difficulty of manufacturing.
3. Turnkey solution reduces mobile phone manufacturing costs and accelerates product iteration. In 2012, chip design companies such as MediaTek, Qualcomm, Broadcom and Spreadtrum successively launched the smartphone Turnkey (integrated) solution, which greatly reduced the development cost of smart mobile phones. Taking Qualcomm as an example, in 2012 Qualcomm launched the third generation of QRD (Qualcomm Reference Design) ecosystem platform for the development of the mass smartphone market, relying on this platform, the time to develop a smart phone was shortened from the previous 6 months to 3 months, and the cost was greatly reduced by 40%.
4. China's strong market share gives related enterprises the opportunity to carry out rapid product iteration and then participate in global market competition. After the difficulty of mobile phone development has been greatly reduced, the main competitiveness of products is reflected in product iteration, brand, channel and other aspects. With the huge Chinese market, mature industrial chain support, and scale advantages, China-related enterprises have taken the lead in breaking through in China and successfully entered the global market.
4 Automotive Industry Outlook:
It is expected to experience a pattern of "first dispersion and then concentration", and it is optimistic that domestic manufacturers may enter the global first-line echelon
Looking back at the development of the global automotive industry in the past two decades, it can be seen that the total demand of the global automotive industry is basically stable, and the names of the top ten companies in the global automotive industry have hardly changed in the past 20 years. Since entering 2020, under the wave of automotive intelligence, the competitive landscape of the global automotive industry has undergone tremendous changes. Tesla, Lucid, Rivian entered the world's top ten car market capitalization companies, Weilai, Ideal, Xiaopeng, Xiaokang and other companies entered China's top ten car market capitalization companies, reflecting the market's optimistic expectations for the smart car track.
From the perspective of the historical review of smart phones, we believe that in the era of smart cars, the technology research and development of the whole vehicle, the division of labor and cooperation in the industrial chain, and the business model are undergoing fundamental changes, and the development history and laws of the smart phone era are expected to be copied to the field of smart cars. We believe that as the next generation of consumer electronics intelligent terminal products, the dominant player in the future industry is still in the field of vehicle terminals.
Companies in each subdivision of the industrial chain in consumer electronics can be divided into leading enterprises and supporting enterprises: the leading enterprise is responsible for scientific and technological innovation, leading the innovation and development of the industry; the supporting enterprise is responsible for the improvement of the process, through rapid learning and follow-up, to promote the rapid penetration and large-scale popularization of the industrial chain; the rise and fall of the leading enterprise product cycle determines the rise and fall of the industrial chain cycle it creates or dominates. With strong market demand, complete industrial chain supply relationship, and strong automatic driving software development capabilities, China's vehicle & technology enterprises are expected to join the global front-line camp in the future.
Under the wave of intelligence and electrification, the global automotive industry has ushered in drastic changes
1. The total demand of the global automotive industry is basically stable, and China has been the main engine of global automobile consumption growth in the past 15 years. China's auto sales grew from 5.76 million units in 2005 to 25.31 million units in 2020, with a CAGR of 11.3% from 2005 to 2020, far exceeding the 0.6% CAGR of other global markets over the same period. China's share of sales in the global market also increased from 8.7% in 2005 to 32.6% in 2020.
2. From the perspective of output, the competitive landscape of the global automotive industry is relatively stable. In the past 20 years, even though the scale of the Chinese market has grown rapidly, the competitive landscape of the global automotive industry has remained relatively stable. From the perspective of production data, the world's top 15 car companies together account for more than 87% of the total production capacity. Looking ahead: We judge that more smart eviction companies will make the Top 10 list, and changes are underway.
3. Since 2020, the market value ranking of global car companies has changed significantly. Since entering 2020, the market capitalization ranking of global car companies has been changing continuously. By the end of 2021, Tesla, RIVIAN, and Lucid will enter the world's top ten car companies by market capitalization, with market capitalizations of $1.1 trillion, $100.5 billion, and $84.2 billion, respectively. At the same time, the Chinese market is also constantly changing, BYD, Weilai, Xiaopeng Automobile, Ideal, Xiaokang shares have entered China's top ten market value car companies, with market capitalization of 827.8 billion yuan, 388.1 billion yuan, 280.2 billion yuan, 240.1 billion yuan and 91.6 billion yuan respectively.
4. Under the background of automotive intelligence, the role positioning of vehicle OEMs is constantly reshaping, and the scale of domestic related manufacturers is significantly superior. In the era of traditional fuel vehicles, OEMs and suppliers mainly build relationships around the hardware and software architecture behind them. In the process of transformation from traditional cars to intelligent cars, the concentration of electronic and electrical architecture of the whole vehicle has been continuously improved, and the business model and division of labor between OEMs and suppliers have gradually changed. We believe that in the era of intelligence, the traditional vertical chain industry pattern will be broken, and the future is expected to evolve into a new model centered on the main engine factory. The role of the main engine factory is more like a "group player", and the supply chain has evolved from the original vertical to the "round table". China's related enterprises have initially competitive, in 2021 the domestic new energy vehicle market local brand sales accounted for more than 60%, of which BYD, Great Wall, Weilai, Xiaopeng, ideal sales of 604,000, 137,000, 91,000, 98,000, 90,000 vehicles, is expected to grow to 1.5 million, 420,000, 180,000, 200,000, 180,000 vehicles in 2022, corresponding to the growth rate of +50%, +148%, +206, +120%, +120%, +122%, +100%. The leading edge is initially established.
5. The industry leader of the future intelligent car is still in the field of vehicle terminals. From the perspective of the historical review of smart phones, we believe that in the era of smart cars, the technology research and development of the whole vehicle, the division of labor in the industrial chain, and the business model are undergoing fundamental changes, and the development history and laws of the smart phone era are expected to be copied to the field of smart cars. We believe that as a next-generation intelligent terminal product, the dominant player in the future industry is still in the field of vehicle terminals.
From the perspective of the division of labor in the industrial chain, with the full-stack layout of the intelligent automobile industry chain of the new car-making forces, the boundaries of design, development, manufacturing, production, sales, service and maintenance are constantly blurring. With the rapid integration of the automotive industry and digital technology, the boundaries of the traditional automotive industry chain are constantly blurring, and more opportunities will be derived from the automotive incremental ecological service.
From the perspective of the development history of consumer electronics: companies in each subdivision of the industrial chain in consumer electronics can be divided into leading enterprises and supporting enterprises: the leading enterprises are responsible for scientific and technological innovation, leading the innovation and development of the industry; supporting enterprises are responsible for the improvement of the process, through rapid learning and follow-up, to promote the rapid penetration and large-scale popularization of the industrial chain; the rise and fall of the leading enterprise product cycle determines the rise and fall of the industrial chain cycle it creates or dominates.
It is optimistic that domestic leading manufacturers may be among the global first-line echelons
Looking forward to the future, similar to the smart phone industry from 2010 to 2011, with the continuous idealization of core elements such as new energy vehicle technology and battery costs, as well as the accelerated entry of new forces, technology giants, consumer electronics manufacturers, etc., the global new energy vehicle industry is passing the stage of product verification and market cultivation in the early stage, and entering the second stage of rapid growth and controversy, during which the market is expected to experience a competitive pattern of "first dispersed and then concentrated". We are optimistic about the opportunities for domestic smart car-related enterprises to enter the global frontline for a long time, mainly for the following reasons:
1. China's automobile and new energy vehicle market demand is huge. Among them, China's total automobile sales in 2021 will be 26.29 million, accounting for about 31% of the total global automobile sales. In 2021, China's new energy vehicle sales will be 3.51 million, accounting for 55% of the total global sales of new energy vehicles.
2. The domestic related industries are complete and have entered the world's first position in the subdivision field. Taking the power battery industry as an example, in 2021, China's power battery installed capacity will be 155GWh, accounting for 52% of the world, and the core industry links will be mature. Among them, CATL, BYD and other companies have entered the global leading enterprises, and the market share occupies the first position in the world.
3. The competitive landscape of the intelligent automobile industry is changing, new brands are ushering in the opportunity to establish, and the leading advantages of related enterprises are initially established. Taking the competition pattern of China's new energy vehicle market as an example, in 2017, BYD, SAIC, BAIC New Energy, Chery Automobile, and Geely Automobile occupied about 74% of the market share in China. With the increase in sales of Tesla (China), Weilai, Ideal Automobile, and Xiaopeng Automobile, according to the annual sales volume of 2021 as the statistical caliber, the market share of the four new car-making forces has reached 17.1%, and the industry competition pattern has changed significantly.
4. Domestic enterprises are leading the world in the field of automatic driving. According to the 2020 California DMV autonomous driving road test report, the total test mileage in the United States is 1.99 million miles, mainly affected by the epidemic, down 800,000 miles from the same period last year. Waymo and Cruise are far ahead of the road test mileage, Cruise ranked first with 770,000 miles, and three Chinese companies, domestic Xiaoma Zhixing, AutoX and Wenyuan Zhixing, ranked in the top 10 road test mileage. In terms of MPI (average mileage per takeover), Waymo and Cruise are still far ahead, with four Chinese companies in the top 10 companies: AutoX, Xiaoma Zhixing, Wenyuan Zhixing and Didi. Baidu did not participate in California's self-driving road test in 2020.
(This article is for informational purposes only and does not represent any of our investment advice.) For usage information, see the original report. ）
▼