BYD eats "crabs" to stop the production of fuel vehicles

When global car companies are still fiercely discussing when to stop production of fuel vehicles, BYD chooses to be the first to eat "crab". BYD recently announced that it has stopped the production of fuel vehicles from March this year. After the announcement was issued, it immediately caused a hot discussion and appeared on the hot search list of social platforms. In the face of the advent of the era of new energy vehicles, all car companies have put the suspension of fuel vehicles on the agenda. For traditional car companies, completing the transformation as soon as possible can seize the market as soon as possible. This time BYD's suspension of fuel vehicles seems to be sudden, in fact, this independent car company that started with batteries has already laid out the new energy automobile industry chain for many years, building a springboard for its transformation into a new energy vehicle company.

Accelerate transformation

A paper announcement made BYD the world's first traditional car company to stop production of fuel vehicles. According to the announcement, according to BYD's strategic development needs, the production of fuel vehicles has been stopped in March this year. In the future, BYD will focus on EV pure electric and DM plug-in hybrid business in the automotive sector. BYD relevant people said that it will continue to provide perfect service and after-sales protection for existing fuel vehicle customers, as well as the supply of spare parts throughout the life cycle to ensure worry-free travel.

For this adjustment, BYD explained that the strategic adjustment revolves around the national dual-carbon strategic goal, adheres to the new development concept of innovation and green, and leads the transformation of the automotive industry with the driving force of scientific and technological innovation; and promotes the sustainable development of society with a green and low-carbon cycle. However, in the eyes of industry insiders, behind BYD's comprehensive transformation of new energy vehicle companies, its sales structure has completed the transition to new energy vehicle products, which has also become one of the reasons why BYD chose to officially announce at this time.

According to the data, BYD, which was established in 1995, became the world's second largest rechargeable battery manufacturer in 2003 and established BYD Automobile in the same year; in 2014, BYD began to fully transform into the field of new energy vehicles; in 2015, it released the "7+4" full-market strategy for new energy vehicles. After years of market layout, BYD has gained a firm foothold in the new energy vehicle market and realized the dual-pronged planning of pure electric and plug-in hybrid.

According to the data, BYD's new energy vehicle production in March this year was 106,600 units, an increase of 416.96% year-on-year; sales were 104,800 units, an increase of 422.97% year-on-year. Among them, the production of pure electric passenger cars was 54,600 units, an increase of 266.2% year-on-year, and sales were 53,600 units, an increase of 271.05% year-on-year. At the same time, IND's plug-in hybrid model production in March this year was 51,400 units, an increase of 853.37% year-on-year, and sales were 50,600 units, an increase of 857.4% year-on-year. Byd's production and sales of fuel vehicles have reached zero.

Wang Chuanfu, chairman and president of BYD Group, said that if pure electric vehicles focus on solving the need for additional purchases, plug-in hybrid effectively solves the first purchase and replacement needs of more families, and forms an obvious substitution effect on the huge stock fuel vehicle market. Plug-in hybrid is an important path to achieve the goal of double carbon, and the change is relatively mild, which will help stabilize the industrial chain supply chain and achieve a smooth transition from fuel vehicles to pure electric vehicles.

Planned for years

In addition to the adjustment of product sales structure, BYD has also made full preparations for the suspension of fuel vehicles.

In June 2021, a bydir internal exchange meeting minutes showed that when asked whether the company's fuel vehicles will be fully replaced by DMi and DMP in the future, BYD replied that "the internal sales of fuel vehicles this year are expected to be about 150,000 vehicles, and the planning of future fuel vehicles has also stopped, and it will be fully replaced as soon as next year." However, in response to the above-mentioned meeting minutes, BYD responded at that time, "There is no such plan at present, and there is a demand in the market and consumers, and there is a demand for partner dealers."

However, in November of the same year, BYD, as the only Chinese car company, signed a pledge with five car companies: Volvo, Ford, GM, Mercedes-Benz and Jaguar Land Rover to stop the production of fossil fuel vehicles worldwide by 2040. Yan Jinghui, a member of the expert committee of the China Automobile Dealers Association, said that BYD's decision to stop production of fuel vehicles in advance is, on the one hand, optimistic about the domestic new energy vehicle market, and its product sales structure has completed the transition. On the other hand, IT has laid out the entire industrial chain over the years, providing sufficient support for its transformation.

At present, BYD is a car company that has mastered the core technology of the whole industry chain of new energy vehicles such as batteries, motors, electronic controls and chips. In terms of semiconductor business, in 200, BYD acquired Ningbo Zhongwei Semiconductor, and after more than ten years of technology precipitation, BYD has created a vertical operation mode (IDM) integrating chip design, wafer manufacturing, packaging and testing, and production. In the field of new energy, BYD has laid out lithium resources from the source, established lithium battery factories in Qinghai, Shenzhen, Xi'an, Chongqing, Changsha, Guiyang and other places, and established a number of subsidiaries to achieve vertical expansion through self-built/mergers and acquisitions, and now its business is spread throughout power batteries, PACK processes, battery positive and negative electrodes, and battery recycling. While being self-sufficient, BYD blade batteries have also been supplied to the outside world since last year.

After mastering the upstream and downstream of the industrial chain in its own hands, BYD has formed a product matrix based on the four explosive products of Han, Qin PLUS DM-i, Song PLUS DM-i, and Tang DM-i, supplemented by dolphins, yuan PLUS and other products, and gradually replaced the fuel vehicle product line.

With bydir's comprehensive turnaround, traditional car companies and new forces will carry out a more fierce "fight". According to the data, Tesla's global sales in the first quarter of this year reached 310,000 units, and BYD's new energy vehicle sales were 286,300 units. Industry insiders said that in the context of promoting the concept of low-carbon and green travel in the world, the time for car companies to stop production of fuel vehicles is constantly advancing, and the overall situation of new energy vehicles becoming the dominant part of the future automobile market has been determined.

Beijing Business Daily reporter Liu Yang liu xiaomeng