Discontinued fuel vehicles, where does BYD's confidence come from?

Today's article, we still talk about BYD. Specifically, it is to talk about BYD's suspension of fuel vehicles.

On April 3, BYD officially announced the suspension of fuel vehicles.

In the statement released, BYD said that according to the company's strategic development needs, BYD will stop the production of fuel vehicles from March 2022, and BYD will focus on pure electric and plug-in hybrid vehicles in the future. In this way, BYD became the first traditional car company to stop production of fuel vehicles.

Maybe at this time, some small partners will wonder, now many new forces are not only new energy vehicles? It seems not unusual to only produce and sell new energy vehicles, right?

Although it can be said that way, the truth cannot be said like this. Compared with these new power brands, BYD's biggest difference is its size. According to BYD's official data, BYD's annual sales in 2021 were 730,093 units (passenger cars), of which 136,346 were fuel vehicles and 593,745 new energy vehicles were sold. In contrast, Xiaopeng, which has better sales in 2021, will sell nearly 100,000 vehicles a year, Weilai will have 91,400 vehicles, and the ideal is slightly more than 90,000 vehicles, not to mention that these three new force car companies will still have hundreds of millions to billions of yuan in losses in 2021. Compared with BYD, these car companies do not say "entering a well-off society", which is not even the "subsistence line".

So, BYD itself is an elephant, an elephant that is difficult to turn around.

So why did BYD announce the suspension of fuel vehicles at the end of the first quarter of this year when there were tens of thousands of fuel vehicle sales last year? Personally, I think there are two main reasons.

1

BYD's basic disk is no longer a fuel car

I don't know if you have ever thought about why BYD will announce the suspension of fuel vehicles at this time node, why not in 2021? Why not 2020?

The reason is also very simple, because until now, BYD's basic disk is no longer a fuel car, or BYD does not need to rely on fuel vehicles, nor can it rely on fuel vehicles.

In recent years, although BYD's fuel vehicle sales are not outstanding, they also have 200,000 sales a year. At that time, the sales of new energy vehicles were also average, with sales in 2018 and 2019 being around 220,000, and falling to nearly 180,000 in 2020. At this time, BYD will definitely not abandon the fuel car.

But the situation took a turn for the worse in January 2021. In January 2021, BYD released the DM-i super hybrid system, and released three models at the same time: Qin PLUS DM-i, Song PLUS DM-i, and Tang DM-i.

Although in the early days of the release of the DM-i super hybrid system, sales performance was average due to production capacity problems, after gradually increasing production capacity, BYD's new energy vehicle sales ushered in an explosion. Sales exceeded 30,000 in May, 40,000 in June, 50,000 in July, 60,000 in August, 70,000 in September, 80,000 in October, and 90,000 in November.

In the second half of 2021, BYD's new energy sales will increase by 10,000 units every month. As a result, sales of fuel vehicles gradually declined. In April 2021, BYD had sold nearly 20,000 fuel vehicles, but by the end of the year, there were only 5,167 left.

In terms of sales alone, it can be said that BYD's pure fuel vehicles are not attractive to consumers, and it can also be said that BYD's new energy vehicles are too attractive. But in addition to market performance, BYD itself is also contributing.

Taking the Tang car series as an example, when the second generation of Tang was launched in 2018, BYD launched 5 configuration models, and in 2019, it also launched 5 configuration models. But by 2020, BYD has only launched 1 model, and there will be no updates in 2021.

The same is true of the Song PLUS model, which was also not updated in 2021 after it was launched in September 2020.

It can be seen that after entering 2021, BYD intends to focus on the new energy business, and the redesign and update of fuel vehicles has slowly stopped. The vacancy of fuel vehicles is also perfectly filled in by their new energy, and even brings new development opportunities.

In general, BYD's suspension of production of fuel vehicles is a trend and forced to do so. If BYD's monthly fuel sales can still have 20,000 vehicles so far, and the annual sales can reach 200,000, it is estimated that BYD will not be so eager to stop production of fuel vehicles, after all, this is still a lot of income.

2

Guarantee the supply of key components

In addition to the reasons for sales, THERE is another important reason why BYD dares to bet on new energy, that is, BYD itself can ensure the supply of parts.

Sandian can be said to be the core of new energy vehicles, whether it is for pure electric vehicles or plug-in hybrid models, and the three-electric system of BYD new energy vehicles can ensure that they will not be stuck in the neck by others.

Since last year, BYD has continued to accelerate the layout of its own parts industry. Taking the power battery base as an example, BYD is expected to add a total of 205GWh to 8 production bases in 2021, including Jinan in Shandong, Wuwei in Anhui, Yancheng in Jiangsu, Wuhan in Hubei, Shengzhou in Shaoxing, Ningbo in Zhejiang, Chuzhou in Anhui, and Fuzhou in Jiangxi. The first phase of the Chuzhou project in Anhui is expected to be officially put into operation in May this year, and the production capacity is expected to be 10GWh.

Before this year's Lunar New Year, BYD also finalized the project of Xiangyang BYD Industrial Park, which will build five major projects such as new energy vehicle factory, auto parts factory, power battery factory, power battery parts factory, and zero carbon park, which will be built in three phases with a total investment of 10 billion yuan in the first phase.

So far, BYD has built or is planning 17 power battery bases, and 8 have been built, namely Qinghai Xining (24GWh), Huizhou (2GWh), Shenzhen Pingshan (14GWh), Chongqing Bishan (45GWh), Xi'an High-tech (50GWh), Changsha Ningxiang (20GWh), Guiyang Guiyang (20GWh) and Anhui Bengbu (20GWh)

If all power battery bases are successfully built, the total battery production capacity is expected to exceed more than 400GWh.

In addition, in addition to meeting its own needs, BYD also has spare energy to help other car companies. On January 15 this year, BYD and FAW jointly established a new company, the specific company name is FAW Fudi New Energy Technology Co., Ltd., will build a new power battery production base in the northeast region, and it is expected that the annual production capacity of 45GWh of power batteries can be realized after the plant is fully put into operation.

In addition to its own manufacturing and production, BYD also entered the resource recovery industry, on January 12, Changsha BYD Automobile Co., Ltd. underwent industrial and commercial changes, the company's business scope added commonly used non-ferrous metal smelting; productive scrap metal recycling; renewable resource recovery. In terms of raw materials, BYD has also received a lithium mining contract in Chile, which will have a quota of 80,000 tons of lithium mining.

In the semiconductor business, BYD founded BYD Semiconductor in 2004. Among them, automotive-grade semiconductors are the core business, which can be divided into three categories: SiC (silicon carbide) module, IGBT module (insulated gate bipolar transistor) and self-developed hybrid DM control module. In the field of IGBT, BYD Semiconductor has a market share of 19%, second only to Infineon. The SIC module is used in its own Han EV models, and the DM control module needless to say, will naturally be used in its own DM model.

Therefore, BYD is not only a BYD car, it has many related supporting industries to support this huge BYD empire. Although BYD itself cannot put down the entire automobile supply chain, it is possible to say that BYD may be the best performer in China.

3

summary

In the era of new energy, BYD has been ahead and may always be ahead. From its own production of complete vehicles to the supply of parts to the outside, BYD has moved forward step by step, and the suspension of fuel vehicles is only a small step in BYD's new energy empire. Maybe in the future, when we see non-BYD brand vehicles passing by, we will unconsciously say: seeing that this car is not, its battery/electronic control is provided by BYD.