BYD stopped production of fuel vehicles, ALL IN new energy has been planned for a long time

Just after entering the Qingming holiday, BYD brought us a big melon, announcing that it will stop the production of fuel vehicles from March 2022 and will focus on pure electric and plug-in hybrid vehicles in the future. BYD also became the first car company in the world to stop producing fuel vehicles.

However, not long ago, BYD released a financial report showing that the company's revenue increase in 2021 did not increase profits, and the net profit fell by nearly 30%, so is it related to the unsatisfactory performance of the discontinued fuel vehicle? At the same time, will the after-sales maintenance service of BYD fuel vehicles be guaranteed in the future?

Be a pioneer not afraid to become a martyr?

Under the wave of electrification, in recent years, many car brands have announced plans to stop production and sale of fuel vehicles, including Mercedes-Benz, BMW, Volkswagen, Honda, Toyota, Changan, BAIC, Lamborghini, etc., but their timelines are basically in 2025 or later. BYD is the fastest car company to come up with practical action, so hasty, is the fuel vehicle really seriously dragging the company's revenue hind legs?

As we all know, last year, BYD fell into the strange circle of increasing revenue and not increasing profits, with operating income reaching 216.142 billion yuan, an increase of 38.02% year-on-year, but the net profit attributable to the shareholders of listed companies was only 3.045 billion yuan, a year-on-year decrease of 28.08%, while the deduction of non-net profit was 1.255 billion yuan, a year-on-year decrease of 57.53%. In this regard, many people have pushed the responsibility on BYD's fuel vehicle products.

Indeed, the market popularity of BYD fuel vehicles has been far less than that of new energy models. But it has not yet reached the point of being marginalized, and even the results are better than many similar fuel vehicles. At present, bydir's fuel vehicles on sale mainly include F3, Qin, Tang, Song, Song MAX, Song PLUS and so on. Among them, BYD F3 sales reached 20,000 units last year, and Song MAX also had nearly 9,000 units, which was better than many brands of fuel vehicles.

The reason why BYD is determined to stop production of fuel vehicles, the car buyer believes that it is inseparable from two major aspects, one is that the new energy vehicle market has a large growth space, and the other is that BYD's new energy vehicle business is too strong.

Last year, the mainland new energy vehicle market showed explosive growth, with production and sales exceeding 3.5 million units, an increase of more than 1.4 times and 1.6 times year-on-year, respectively. Now the policy is still boosting the development of new energy vehicles, there is still a broad space for development in the field of new energy vehicles, the China Association of Automobile Manufacturers predicts that in 2022, the mainland new energy vehicle market sales are expected to exceed 5 million, retail penetration rate of 21.8%. In addition, the National Development and Reform Commission also predicts that the penetration rate of electric vehicles in the mainland will reach 82% in 2025 and rise to 95% in 2030. This environment gives BYD confidence in developing new energy vehicles.

In terms of BYD's new energy vehicle business, it is a leader in the world, and it is also the head brother of the mainland brand, last year, BYD ranked first in the list of new energy vehicle companies with sales of 562,900 vehicles, with a market share of 17.1%. In March this year, sales also exceeded 100,000 units, up 160.9% year-on-year, once again winning the championship of new energy vehicle sales, and the sales of its DM and EV models exceeded 50,000 units, showing strong market competitiveness. It is the outstanding performance in the field of new energy vehicles that gives BYD the confidence to completely abandon fuel vehicles.

What are the challenges of ALL IN New Energy?

BYD's new energy vehicle volume is inseparable from its mastery of a number of advanced technologies, blade batteries, DM-i super hybrid system makes the strength of new energy products greatly enhanced. In addition, BYD is also one of the few enterprises in the automotive industry that has the core technologies of new energy vehicles such as batteries, motors, electronic controls, and chips, and the new energy vehicle industry chain has strong advantages. Now BYD ALL IN new energy vehicles, can be said to be the best of the best and avoid the shortcomings.

However, everything is a double-edged sword, BYD will bet all the chips on the new energy vehicles also have no small risk, because the core components of new energy vehicles are produced by BYD, then the problems of rising raw material prices, insufficient production capacity and other aspects will be amplified in BYD, resulting in rising vehicle prices, car buyers wait for too long, the result is to affect the market share.

It is reported that ATD's cumulative undelivered orders have reached 400,000 units, and it is still increasing month by month. In order to solve the problem of production capacity, BYD has only continued to expand its factories, and BYD has planned or expanded 8 factories since last year. In addition to the three major plants in Shenzhen, Xi'an and Changsha, the Changzhou, Fuzhou, Hefei, Jinan, and Zhengzhou plants are expected to be put into operation by the end of this year, when BYD can use the production capacity to reach 1.9 million units, and BYD's sales target at the end of this year is 2 million units. This means that as long as the factory is completed on schedule, BYD's order volume at the end of this year can be effectively released.

BYD's system strength and market achievements are obvious to all, and it is really surprising to cut the fuel vehicle business now. However, the global automotive industry is developing in the direction of new energy, as the leader of the new energy vehicle industry, BYD cut off the fuel vehicle business, and all its energy should be focused on new energy vehicles should be able to achieve better development. You know, BYD said many years ago that it is going to be the world's number one car company, and new energy vehicles may help realize their dreams.

It should be said that even if BYD stops production of fuel vehicles, the after-sales service of fuel vehicles is still guaranteed, and it still provides perfect service and after-sales protection, as well as the supply of spare parts throughout the life cycle to ensure that consumers use cars worry-free.