Last night, BYD's explanation triggered a heated discussion, saying: According to the strategic development needs, it plans to stop the production of its fuel vehicles from March 2022. BYD will focus on pure electric and plug-in hybrid models in the automotive sector, and I would like to write an article to explore this matter.
Overall:
● BYD's fuel vehicles in recent years to maintain low prices, not to mention, especially the model has been old (fuel vehicle special F3 and speed sharp has entered the end of life, several other Song series have DM-i and pure electric models), the scale of about 200,000, with the demand for pure electric and plug-in rising, there is no economic impact on stopping.
● From the overall sales of the brand, BYD broke through the shock of sales in the range of 400,000-500,000 in 2021 and began to enter the range of 750,000, the main driving force is that the penetration rate of new energy vehicles began to rise in a straight line, ANDD also used a relatively low gross profit in exchange for market share (the high cost performance of DM-I models and the way to play green cards)
● From the perspective of brand reputation, at present, in the global scale, it is the transition from traditional fuel vehicles to all new energy brands; from the perspective of government and consumer recognition, pure electric vehicle companies are considered to be a plus.
In a word, the summary is that the current decision is not much harm, the benefits are great, and it is a good way to play.
Figure 1. Historical data on by-ONE delivery of cars
Part 1 BYD's sales volume is reviewed
I take out the insurance data to see: from 2019 to 2021, bydir fuel vehicle terminal insurance data 217617, 214518 and 193998 units, which have been around 200,000 for a long time; the insurance data in the first two months of 2022 is 8813 units and 3464 units, respectively. In 2021, plug-in hybrids soared from 50,000 units to 229,000 units due to DM-i, while sales in the first quarter of 2022 reached 141,000 units. Pure electric vehicles have been pulled up from 100,000-130,000 units to 296,600 units in 2021 and 143,000 units in the first quarter of 2022. So on the whole, fuel vehicles are not so important to BYD.
Figure 2. From 2019 to 2021, BYD's sales volume in various categories was reviewed
From the perspective of BYD models, the main models are F3, Song and Song Pro, and the next two cars are actually on the same platform as DM-i and pure electric. The best-selling fuel vehicles in 2021 will send Pro 63,600 units, F3 39,700 units, Song Plus 39,200 units, and Song 21,400 units. Starting from October 2021, BYD will stop production of its F3 models, and other fuel vehicles will gradually stop production according to the situation in the future. The current main demand is still the Song family, which gradually rises with the order of DM-i, stopping the fuel vehicle and allowing consumers to turn to dm-i plug-in hybrid.
Therefore, the time of March is basically fixed, that is to say, this part of the simple fuel vehicle is stopped, and the symbolic significance is greater than the practical significance.
Figure 3. 2019-2021 fuel vehicle sales
In the exchange with investors, someone introduced that BYD currently has accumulated 400,000 units in hand (2022 target 1.5 million, according to Q1 to continue to pull volume), here a large part is the demand for DM-i, due to the basic production of PHEV and fuel vehicle mixed line, from the order accumulation and follow-up development point of view, now the fuel vehicle is stopped, commercial interests have not been lost, of course, the biggest benefit is still in the brand point of view, from a fuel vehicle era of the brand began to enter the whole new energy vehicle enterprises, From the image point of view, it is quite Cool. Combined with the global company positioning of BYD's TOP 100 by Time Magazine before, this time there is a certain active public relations component.
Part 2 BYD's considerations
To add, from the investor summary, look at BYD's choice in this.
China still has 60% of car-free families, if all do pure electric vehicles for consumers to see the pressure, the first car plug-in hybrid, in the existing DMI hybrid, the entire differentiation, mainly through close to the price of joint venture fuel vehicles, to meet consumers' concerns about mileage or charging facilities, you can use fuel saving and strong power to impress consumers. Then promote pure electric vehicles, consider the second pure electricity in the family is suitable, the first PHEV is suitable, the proportion is 40% PHEV, 60% pure electricity, from the European point of view is also this proportion OF PHEV 45%, pure electricity 55%, so in the long run, China is also this trend.
That for BYD, the original low-end fuel vehicles placed there obviously lowered the price and brand image, because to grab customers from the joint venture fuel vehicles, it is inevitable to sacrifice their weaknesses (traditional fuel vehicles).
Figure 5. BYD is currently a big threat to joint venture fuel
Since 2017, China has entered the era of stock competition, so BYD's target of 1.5 million in 2022 is to rob customers from the joint venture car, this attack is still very aggressive, reluctant to children can not set the wolf.
Figure 6. Sales volume of passenger cars in China
From the overall point of view, after the suspension of the sale of fuel vehicles and pure electricity prices, BYD's models have fully entered more than 100,000, and the main DM-i entry models cover 100,000-150,000, and improve models 150,000-200,000; from the perspective of pure electricity, that is, with the same lithium iron phosphate battery, 10-200,000 to expand the sales base, with more than 200,000 models to make money, and then rely on DM-i to achieve a breakthrough in the brand, from the current data, there is no need to keep fuel vehicles to drag their own hind legs.
Figure 7. BYD Price Band (January 2022)
In fact, from the perspective of production capacity, as DM-i removes the previous dual-clutch transmission and develops a dedicated engine, overall, the common part of DM-i and fuel vehicles is gradually eliminated, and it is time to make room for fuel vehicles.
From the perspective of the sales area, it is true that the plug-in hybrid has inherited all the 4S shop network of the original fuel vehicles, and from the perspective of sales amplification, it has achieved an upgrade in the geographical latitude and hit the original place that was not hit.
Figure 8. BYD sales area (fuel vehicles, plug-in hybrid and pure electric)
Of course, I think what needs to be worried about is that with the suspension of production and BYD's further adjustment of existing products, what will the previous fuel vehicle users do next? I understand that after the large-scale amount of F3 and so on, small accessories are no problem, but the value of used cars is directly diving. In fact, my understanding, buyING BYD fuel vehicles users, originally quite niche, although 2019-2021 every year there are 200,000 terminal consumption, this part of the comrades may have to bear a brand to new energy after the transformation, the depreciation of second-hand cars helpless
Summary: I think IT HAS DONE A LOT IN THE PAST TWO YEARS, DOING SCALE FIRST, AND THEN MAKE MONEY. In the stock market, this has a very, very big impact on the joint venture brand, and it is a bit of a mainstay for new energy vehicles that are affected by cost factors. Of course, this model can also be deduced that in fact, new energy vehicles do not do vertical integration in the field of three electricity, and there seems to be no way out at all (the cost cannot be spelled, and the technical iteration is not OK).