On April 3, BYD Automobile officially announced that it will stop the production of fuel vehicles from March and will focus on pure electric and plug-in hybrid vehicles in the automotive segment in the future.
At the same time, BYD released its sales results for March, of which passenger car sales reached 104338 units, while the production of fuel vehicles was directly zeroed from 17,515 units in the same period last year, which also made the sales of fuel vehicles in the whole month zero. This means that BYD has become a 100% production and sales company of new energy vehicles since March 2022, and the first car company in the world to transform from fuel vehicles to pure new energy vehicles.
On this day, BYD spent 19 years.
Looking at sales in March, BYD once again rushed through the 100,000-vehicle mark. Considering the capacity impact of FAW and SAIC in March due to the epidemic, BYD is likely to become the largest passenger car company in the Chinese market in March.
At the same time, BYD should also continue to win the first position in the sales of a single brand of its own car companies - BYD has surpassed the Geely brand once in October last year. According to the data in March, BYD has a high probability of surpassing Geely to become the first independent brand in the first quarter of this year, which is a milestone transcendence.
Since BYD's sales in March are all new energy vehicles, IT may also be the world's second-largest new energy vehicle company by sales - Tesla delivered about 310,000 units in the first quarter, while BYD had 286,000 units.
So what does BYD's sales figures for March say?
I think there are the following keywords: long-term vision; adherence to the technical route; and choice and timing are indispensable.
First, take a long-term view
Some people say that BYD's success is "long-termism", but in fact it is not so simple. The so-called long-termism is to choose a continuous action that sets a goal, and this goal is often agreed upon by everyone. However, BYD is different, and the goal set by Wang Chuanfu is an "electric car" that has not been recognized for a long time, which is not a problem of long-termism, but a firm vision of his long-term strategy.
BYD Automobile is a young brand in the Chinese market, and in 2003, it acquired Qinchuan to enter the automotive industry, and it is also the second private car company after Geely. At that time, Wang Chuanfu had already expressed the reasons for his switch from the battery industry to the automobile industry: the automobile industry may turn to electric vehicles, the battery itself is BYD's advantage, AND can rely on the automobile industry to achieve the transformation of the battery industry at that time.
Wang Chuanfu's judgment was basically made in 2004, and even at that time, Wang Chuanfu did not emphasize the logic of electric vehicles too much, because electric vehicles were basically not optimistic at that time. But he also mentioned in occasional interviews in 2004: "The key to electric vehicles is battery technology, and as lithium battery technology matures, the energy of the electric vehicle market will soon be revealed in two or three years."
You can recall that in 2004, what cars were in the Chinese auto market, and what cars were in the global market, basically no one would think that electric vehicles could become mainstream in 15 years.
Of course, there are also people who see the future of electric vehicles like Wang Chuanfu, and that person is called Elon Musk. He invested $6.3 million in 2004 in a small company called Tesla and quickly became chairman of the company with only a few dozen employees.
BYD began its own electric vehicle business after taking over Qin Chuan, but it was very low-key at the beginning. In 2006, BYD created the BYD F3e and is said to have begun to develop a hybrid solution for the S6. However, because the fuel vehicle business is developing rapidly, the F3 car is difficult to find, coupled with the imperfect infrastructure of electric vehicles, this F3e has not been introduced to the market.
Wang Chuanfu is obviously very persistent about electric vehicles, although fuel vehicles sell well, but he still insists on electrification products. By 2008, BYD launched the F3DM, if you look at the development time of a generation of models, it is almost around 2004. At that time, the price of bydir F3DM was 149,800 yuan, which was similar to that of Toyota Corolla.
BYD did not stop because of the bleak sales of F3DM, but continued to increase investment in technology research and development. At that time, Wang Chuanfu had already set the tone that electric vehicles were the future of BYD, and even formed a set of strategic development logic of enterprises.
1, do electric vehicles are also from the environmentalism, good use of energy;
2, the key to electric vehicles is battery technology;
3. Break the technical barriers of foreign brands.
BYD has also invested more R&D resources in electric technology, not even limited to passenger cars, and has also taken the lead in trying to break through in the field of buses. This led to the taxis BYD e6 and bus K9 that were later operated in Shenzhen, accumulating enough electrification technology for BYD.
In 2014, BYD had the first DM second-generation car, that is, the Qin dual-mode electric vehicle, and officially launched BYD's flagship product Tang in January 2015. At that time, Tang's main focus was electric four-wheel drive and 4.9 seconds zero hundred acceleration, the starting price was 250,000 yuan, and BYD began to really have "Di powder".
In fact, after BYD began to "take off for the second time" in 2014, its development in the field of new energy is "immeasurable". First, the price is expensive, the second is that the overall new energy environment is not supported, coupled with the decline of independent brands in 2014-2016, it is not a success. Then BYD did not keep up with the rapid rise of Geely, Great Wall and Changan, and by 2016, sales were still stuck at the level of 300,000 vehicles, and the only good news was that new energy vehicles sold 96,000 vehicles.
Perhaps at that time, Wang Chuanfu and his BYD became more and more aware of the big wave of new energy. On the one hand, Wang Chuanfu admitted his mistakes when he first entered the automotive industry, and on the other hand, he began to expound BYD's declaration of "achieving dreams", saying that there are three dreams: the development of solar energy, energy storage and electric vehicles.
Wang Chuanfu believes that BYD has created core things in new energy vehicles, and batteries, motors, and electronic control technologies are all global leaders. This is the key to his belief that BYD can dominate the tide of new energy.
After almost 15 years of continuous investment in new energy technologies, BYD has ushered in a breakthrough in cost and scale in its traditional advantage project , lithium iron phosphate batteries. This includes the blade battery and DM-i super hybrid system released in 2020, and then with the gradual switching of the previous DM products to DM-i, the production of the third generation of new energy vehicles, with the help of low fuel consumption in the feed state, in 2021 to achieve full discharge.
After more than 19 years of persistence, Wang Chuanfu has continued to invest in the direction of new energy, from single-point innovation to comprehensive breakthrough, which cannot be completed in a short period of time.
In the past two decades in the Chinese auto market, there are not many entrepreneurs with such a vision as Wang Chuanfu, because for a battery company like BYD, it is not a "first-order choice" to select new energy vehicles in 2004, but a "second-order choice".
An equally successful automotive entrepreneur like Li Shufu, who transitioned from the refrigerator industry to the automobile, insisted that investing 20 years is long-termism. Three years late, Wang Chuanfu directly took "new energy vehicles" as the long-term strategic goal of the enterprise, higher than the pure "automobile", and finally achieved the technical barriers of foreign investment, while achieving leapfrog transcendence. This should be a long-term vision.
Second, adhere to the technical route
BYD's development in the field of new energy in the past 20 years is also surprising that it adheres to the technical route.
It may be that it is already rare for BYD to adhere to the new energy route mentioned above, and what is even more difficult is that BYD needs to find one or two successful routes in the countless paths of new energy.
For example, in the era of 2004, not to mention a Chinese independent car company, that is, from the perspective of global car companies, what can be chosen for the path of new energy vehicles: 1, hybrid vehicles; 2, pure electric vehicles; 3, hydrogen energy vehicles.
At that time, the hybrid route could only be said to be Toyota's barely successful, and the cost of electric drive was still high, so at the same time there was Ford's hydraulic hybrid, and later compressed air hybrid.
Pure electric vehicles were already the first to fail in the early 2000s, the GM EV1 was completely unsuccessful, and Ford and Chrysler did not even dare to mass-produce. The only people who dare to try in the field of pure electric vehicles are small companies, most of which have a deep relationship with the EV1 project.
There is also hydrogen energy, BMW and Daimler have tried, but in the face of this high-cost project, only luxury brands dare to try.
At that time, BYD chose two ideas: one is a pure electric vehicle, and the second is a simplified version of a pure electric vehicle, driven by electricity, equipped with a small battery pack, and then added an engine to generate electricity.
The former results out faster, the product is called F3e, AND EVEN made a special plan for charging stations. The latter technology is called DM dual-mode drive, and the first model is also based on F3.
In 2008, BYD's F3DM was really early, when GM encountered a financial crisis, its Volanda would not come out until 2010, and Toyota's plug-in hybrid Prius would not be launched until 2011.
The principle of F3DM's power technology now seems very simple, that is, the DHT series parallel structure that everyone is familiar with later, and perhaps the difference is that there is no engine direct drive. But F3DM is a very early range product, BYD's main "iron battery" can achieve 100 km of pure electric endurance (50km/ h cruise test), after the power is not charged to the battery to achieve endurance, so it is still very forward-looking for new energy.
The reason why F3DM has not succeeded is mainly because the battery life is not enough, the performance is not enough, and it seems too immature. Coupled with the fact that F3DM is BYD's early product, there are many small problems, the car is not built well, and new energy is engaged, BYD is naturally complained about by all parties. The rare benefit of F3DM is probably that BYD has established its own "pioneer in the field of new energy" with a model.
However, the pioneer is only a marketing statement, in fact, the DM generation technology was quickly eliminated. A large number of BYD's actions after 2010 are concentrated on pure electric vehicle models, with the advantages of state subsidies and Shenzhen local subsidies, BYD e6 taxis and K9 buses have been launched. These two products for the To B end have supported the verification of BYD's electric technology for a long time.
In fact, after 2010, BYD also had a period of hesitation, new energy technology is not favored in the market, and it is still fuel vehicles that maintain its sales, so the research and development of fuel vehicle powertrains must also quickly keep up. Therefore, it can be seen that in the later models of F3 and F6, BYD has put its own powertrain on it, and later the speed sharp, G6 and other projects have been quickly developed such as 1.5T and 6DCT.
It is said that these new powertrains are ALL "stealing" from Volkswagen, and in the follow-up of turbocharging and double clutches, BYD is faster than the Great Wall and Geely's own brands - this is also a typical feature of BYD's "technical man".
Since fuel vehicles were the bulk of BYD's sales at that time, the investment in new energy must be parallel to fuel vehicle technology. Therefore, when the second generation of DM technology came out in 2014, it can be seen that there is no connection with the first generation at all. BYD DM II is a fuel vehicle powertrain, in the back of the gearbox plus a motor, that is, P3 architecture. Later, the super version of P0+P+P4 was derived, which was used in Tang and was also the first product to open BYD's ceiling.
However, at that time, BYD still insisted on the common progress of PHEV products and pure electric products, and did not give up any piece, nor did it follow the 48V strategy proposed by the European market to take the light mix route, or follow the Japanese model to take the HEV route.
The logic behind this is actually very simple, BYD's core technology is built around batteries and motors, and even the foundation of the entire enterprise is large-scale battery production. In this way, BYD's products must be batteries as the core competitiveness, which explains why IND has always promoted large-capacity batteries in the technical route, choosing the PHEV route instead of HEV or short-range models.
After insisting on iterating on two generations of PHEV technology, BYD should have seen the future direction of the PHEV route around 2015.
Why? Around 2015, there were three clear divisions of the hybrid technology route: the first was Toyota's power shunting; the second was the P2 or P3 architecture that was relatively clear in the European market; and the third was Honda's recently launched i-MMD hybrid system, which is the DHT technology that will be highly sought after in the future.
Toyota THS is basically a route abandoned due to patent barriers, and the P2 or P3 architecture in the European market is equivalent to the technology of BYD DM II, and Honda's new i-MMD is a further optimization of BYD DM generation. Honda's i-MMD technology proposes a newer strategy, including the design of high-thermally efficient engines, drive motors and different shafts of generators, as well as engine direct drive, etc., which makes the i-MMD comparable to the fuel economy of Toyota's THS. At the same time, as long as the system increases the battery pack, it can complete the expansion of the PHEV.
Obviously, for BYD, there is originally a generation of DM technology accumulation, and returning to the DHT technology route is a better choice. A few years later, in 2020, BYD launched the DM-i super hybrid system, which was a hit on the market.
Of course, BYD's insistence on the technical route, another example is the lithium iron phosphate route. This example will be related to the third point about "choice and timing", which we will talk about in more detail below.
Interestingly, BYD's capital expenditure was at a high level from 2015 to 2018, especially in 2017. From the time node of BYD's series of explosive models in 2022, 2017 is the starting point of technology research and development investment in these models.
In short, BYD's success is not overnight, and this long-term accumulation is not as smooth as you think.
BYD's long-term accumulation lies in its technical route is always correct, from the strategic goal of electric vehicles, to the active development of PHEV models with electric drives as the core, and then to the iteration of three-wheel PHEV drive technology, it can be said that from the beginning, BYD chose the right path to succeed after accumulating three generations of models.
Like other car companies, such as Volkswagen, at the beginning of the construction of fuel vehicles, and then in the technical route need to consider the fuel vehicle technology sharing, and in the PHEV architecture can only consider the P2 architecture, and finally found that the direction is the DHT route, then the previous technology accumulation is meaningless.
In the domestic independent car companies, in fact, Geely, Changan, and GAC also have such a route swing problem, which delays a lot of opportunities for R& D investment. Therefore, two years after BYD launched DM-i products, the Great Wall and Chery had their own DHTs, the early stage of Geely Thor Power was only HEV, and GAC was even more off the HEV of the THS route. This means that the entire PHEV dividend has been eaten by the BYD family.
Third, timing and choice
Is the situation of the times creating heroes, or the heroes creating the times? The answer to this question, many people think that BYD is the former, but Wang Chuanfu thought it should be the latter in 2016.
"Technology determines strategy," a phrase Wang Chuanfu mentioned in an interview in 2016. "In a highly competitive environment, it's crucial for entrepreneurs to grasp the direction," he said. As a technology-based company, BYD prefers to do some very complex industries that are not simple to judge the direction. ”
In other words, when a company's technology is enough to affect the market, the market will naturally move closer to the company's technical route. The example Wang Chuanfu gave at the time was electric buses, which were originally a market with zero sales, and BYD created this market because BYD had the technical ability to produce and manufacture electric buses.
According to Wang Chuanfu's logic, whether it is BYD or Tesla, their success feels like catching up with the general trend of "new energy", but the essence behind it is actually that they have created the "new energy" market and gained the right to speak in the competition for technical routes.
Overall, Tesla and BYD in 2003, although they both chose the electric vehicle track, but it was too early, the technology was not mature, there was no right to speak, and there was no so-called timing.
From the flashpoint of 2003 to 2020, rather than saying that both car companies have waited too long, it is better to say that until this time electric vehicle technology can really replace the internal combustion engine. In the middle of the way, Tesla faced bankruptcy several times, musk put all his money down; BYD did not hesitate to let go, after the rapid development strategy of electronic products in 2010, it encountered a big recession, and it was not until 2015 that it eased up.
Timing is an elusive metaphysics because you can't tell whether it appeared at birth or whether it would have to wait a long time to appear.
As if they are also new energy vehicle companies, BAIC Electric Vehicles and Jianghuai Electric Vehicles may suddenly catch up with the first round of new energy outbreaks, and these halfway debut companies have made a lot of money around 2013-2017, although their technology accumulation is obviously far inferior to BYD. Even at that time, there were small enterprises such as Kandi, Zhidou and Zotye vying for subsidies for new energy vehicles, which made Wang Chuanfu helpless.
Perhaps for BYD, if it determines that the future belongs to electric vehicles, it can only persist until the time comes. Wait, wait, wait, until ten years after the establishment of the company, BYD can be regarded as "waiting" for the opportunity to develop new energy - but this is more like an opportunity created by BYD itself.
According to BYD's financial report, since the fourth quarter of 2015, the company's sales net profit margin has begun to turn positive, which should be due to the arrival of new energy subsidies. By the fourth quarter of 2017, BYD's net operating cash flow had also turned positive across the board, rising from about 2 billion yuan in each quarter to 66 billion yuan in the fourth quarter of 2021.
However, not everyone can take advantage of the trend to succeed, because as Wang Chuanfu said, "the opportunity is not waiting, but the company's technology determines."
When the tide is surging, even if you as a bystander may choose once or twice, as long as you are wrong once, you may lose everything. The above-mentioned JAC, BAIC, and Kandi are all like this, and they have won for a while. Only participants like BYD can decide where to go next.
BYD first chose electric vehicles in terms of strategic goals, and believes that electric vehicles will be popularized in 2025. This awareness determines that BYD's strategic technology reserves can keep up with the consumption trend of the market, and it is five or ten years in advance to do a good job of consumer cognition - can first think of BYD as a "global new energy vehicle leader".
The second is the insistence on the technical route, but this insistence must also be coupled to form a resonance. This is what people usually call the "course of history."
A typical example here is the choice of the lithium iron phosphate route. BYD has always insisted on lithium iron phosphate batteries — which BYD initially called "iron batteries" — a battery with low energy density but sufficient safety and controllable cost that has become BYD's killer.
However, later, there was a fork in the global battery technology route, this low energy density lithium iron phosphate battery is difficult to make a long-lasting electric vehicle, Korean suppliers and domestic Ningde era proposed the route of ternary lithium batteries. At this time, IT is impossible to say that it is not panicked, after all, its production capacity investment in lithium iron phosphate batteries is huge, and if it is abandoned by consumers, the submerged cost of completely turning to ternary lithium batteries is huge.
Later, in addition to following up the development of ternary lithium batteries, BYD is also trying to solve the energy density problem of lithium iron phosphate. By 2020, BYD has given the answer to the blade battery, which solves the problem of energy density on the one hand, and has higher safety than the ternary lithium battery with high nickel formula on the other hand. Even BYD's needle prick test is in direct opposition to the domestic battery "one brother" Ningde era.
Things are unpredictable. In 2020, when all parties debated what batteries are better for electric vehicles, Tesla, the world's largest electric vehicle company, chose to launch a Model 3 model equipped with lithium iron phosphate batteries in the Chinese market and cut the price by 30,000 yuan. For a time, all the controversy was quelled, and since Tesla could use it, BYD could naturally use it.
Soon, the loading volume of lithium iron phosphate batteries in the Chinese market has increased across the board, especially in the passenger car market. By 2021, the loading volume of lithium iron phosphate batteries will account for 51.7%, which is already an obvious "winner". BYD's blade batteries have also become synonymous with new technologies, and BYD brand PEV and EV sales have risen sharply, eliminating the need to worry about the cost of inundation of production capacity, and also obtaining higher profit margins because of low costs.
BYD chose the lithium iron phosphate technology route, after being impacted by the ternary lithium battery, the energy density was optimized by the blade battery, and the same mileage has a lower cost. At the same time, the entire market began to accept lithium iron phosphate technology, and BYD successfully promoted blade batteries.
The story of BYD's blade battery is the best annotation to "choice and timing".
Of course, BYD's success also lies in the fact that it has options to do. If BYD does not have the technical accumulation in the past ten years and does not have long-term technical research, it will not have a choice, nor will it be able to wait for the time to come, let alone form a resonance.
"We must have strong technology to see far and deeply." Wang Chuanfu said in 2016 that ATD had 15,000 engineers working on various technical directions, such as new energy technology and solar technology. Perhaps because of the far-sighted, BYD can see that the future of the car is no longer dominated by the internal combustion engine, but dominated by motors and batteries, of course, there is ALSO BYD's "deep love" for PHEV.
In fact, even in 2017, a leading independent car company still believes that the future of hybrid technology is HEV, that is, blue hybrid. The logic behind it is that once the subsidy declines, then the battery cost of phEV will not be covered, and then heV models with small battery packs will become mainstream.
By this node in 2022, PHEV is already the main route in the new energy route, whether there is subsidies or not, it will not affect the sales of PHEV models, and consumers do not care about the difference of thousands of yuan. Therefore, although the car company accelerated the development of THE PHEV model later, the time node was about two years late, and there was no product in the empty technology. By this time, BYD had surpassed it in sales.
In fact, BYD can see this, perhaps because BYD's vertical integration stems from the technology in its own hands, including core battery technology, motor technology, and battery production technology, etc., can deeply understand the curve of cost decline, as well as the understanding of scale effects.
In addition, at the end of 2021, when all new energy vehicle companies are shouting about the price of raw materials and the shortage of battery supply, BYD can still produce rapidly and sprint the production capacity to 100,000 vehicles, because BYD's batteries are manufactured in its own factory.
BYD's zero of fuel vehicles will only be a beginning, another beginning for China's manufacturing to lead the world.
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