BYD's "discontinued fuel vehicle" is determination and ambition!

[This column is jointly produced by Tencent Auto and Kung Fu Auction]

2629 words Duration to read 5 minutes.

BYD, which "dares to be the first", is in the forefront of global car companies.

On April 3, BYD announced that it would stop the production of fuel vehicles from March this year according to the needs of strategic development.

The news broke out, instantly stirring up thousands of waves from all walks of life.

Some people think that this is because "BYD new energy vehicles sell well", and some people think that this is because "BYD fuel vehicles cannot be sold", and various comments are varied and mixed.

However, the capital market took the lead in "voting with its feet".

As soon as the news was heard, the No. 4 BYD Hong Kong stock soared by 8.17%.

Yesterday, BYD A shares also rose 2.52%, closing at 241.90 yuan.

Obviously, the capital market is also optimistic about BYD's move to a certain extent, which fully demonstrates the pursuit and support of market funds.

However, what is the underlying logic of BYD's "radical" development strategy? And what kind of impact will the complete abandonment of fuel models have?

(1) "Perspective" BYD, what is the underlying logic of "oil cut"?

If you have carefully studied BYD's past production and marketing expresses, you may understand why its actions are so "radical".

2021 is a year of breakthrough growth for BYD in terms of sales.

In 2021, BYD will sell a total of 594,000 new energy passenger vehicles.

According to the understanding of Kung Fu Automobile, BYD's new energy vehicle market share will reach 17.1% in 2021.

In the first quarter of 2022, BYD's total sales of new energy vehicles reached 286,000 units.

In March 2021, its new energy vehicle sales were 105,000 units, officially breaking through the 100,000 mark, marking that the competition in China's new energy vehicle market has entered a new stage.

According to this growth rate, BYD's new energy sales in 2022 exceed one million vehicles is a high probability event, and it is even expected to win the championship.

Therefore, BYD's "cut off oil" declaration is not difficult to understand.

However, BYD is not a "cut off" in a broad sense, but should be understood as a future "hybrid big household".

From the perspective of BYD's sales structure segmentation in 2021, the cumulative sales of DM models for the whole year were 270,000 units, an increase of 467.6% year-on-year; the cumulative sales of EV models for the whole year were 320,000 units, an increase of 144.9% year-on-year.

The jump in sales of DM models has become another core engine of BYD's sales, and there is a trend to surpass its EV models.

To put it bluntly, BYD's intention is very clear, not to "give up" the share of fuel vehicles, but to have the confidence to further "eat" the share of fuel vehicles through the "fuel +" of DM models.

At the same time, the "oil cut" also means that BYD's new rhythm in the future hybrid models will be faster, and the pricing strategy will be relatively more aggressive.

It is not difficult to see that BYD will rely on the low-cost DM-i hybrid system to achieve "parity" with fuel vehicles and accelerate the replacement of fuel vehicles.

For example, BYD Qin PLUS and Song Pro, the entry provides DM-i power, and the entry price is directly reduced to the level of 100,000.

Looking forward to the future, Kung Fu Automobile believes that the basic disk of fuel vehicles may be strongly impacted by BYD, a "big hybrid".

(2) "Cut off" power generation, BYD pure electric will also usher in a "turning point"?

In addition to the "tiger eye" of the fuel vehicle market, for the pure electric market, BYD is also "not small".

At present, the mainland pure electric passenger car market is still in a relatively early stage.

Kung Fu Automobile believes that the biggest problem in the structure of pure electric products at this stage is still the lack of a universal sense of "national car" - A-class car.

The A-Class is the most difficult to develop of any model.

Consumer requirements are diverse, cost control is strict, gross profit margin is low... These are all practical problems faced by A-class cars. However, the consumer group of A-class cars is the largest, and it is also the most considerable "volume market".

In other words, whoever can grab the share of this field and sit firmly will be the leader of the pure electric market in the future.

From this point of view, this is precisely the weakest area for domestic pure electric manufacturers.

However, with the cost and scale platform of e-platform 3.0, BYD has a natural advantage in this field.

Kung Fu Automobile also expects that BYD will continue to launch a number of pure electric models to continue to deepen this market.

Based on the e-platform 3.0, BYD can cover low-end cars with less than 100,000 yuan to mid-to-high-end series of 300,000 yuan, and will launch a new luxury brand to cover higher price ranges.

In addition, BYD's supply chain of pure electric vehicles is independent and controllable, and the core components are self-developed and self-supplied, and IND shows stronger resilience in the face of rising raw material prices and shortage of parts in the whole industry.

Therefore, compared with other independent car companies, they are still in the exploration stage, and the layout of subdivisions has entered the new energy track. BYD's pure electric vehicle models have already attacked in the whole line, and the leading advantage is obvious.

Next, it is not impossible to give birth to another "Volkswagen" in the field of pure electric power.

(3) Kung Fu shooting

The development of the domestic automobile industry naturally lags behind foreign countries, and at the critical moment of moving towards the new energy era, it has won a little opportunity to "overtake in the corner".

In the era of new energy, if domestic car companies still stick to their locality and cannot go out to compete with global car companies in the international market, there will be no difference with the era of fuel vehicles.

BYD, on the other hand, has made its determination clear with practical actions.

Looking forward to the future, let us also look forward to BYD being able to tell such a "new story" of its own brand.