At present, electrification has become the trend of the times, traditional car companies have opened the pace of transformation, but most of the ways are more relaxed, almost all of them are oil and electricity at the same time slowly transition, and no car companies dare to give up fuel vehicles, betting all on the electrification route. As a member of a traditional car company, BYD does not take the usual path.
On April 3, BYD used an announcement to highlight its confidence in All in New Energy.
"The company will stop producing complete vehicles for fuel vehicles in March 2022. In the future, BYD will focus on pure electric and plug-in hybrid vehicles in the automotive segment. BYD said in the announcement on the official Weibo. With the disclosure of the announcement, BYD has also become the first car company in China and even in the world to announce the suspension of production of fuel vehicles.
Say goodbye to fuel vehicles
Why can BYD become the first car company in the traditional camp to "say no to fuel vehicles"?
Although the announcement seems to be a big deal, there should not be too much of a surprise for BYD's "oil cutout".
As a domestic new energy vehicle leader, most of the models sold by BYD have now been converted to pure electric and hybrid models, and its sales market does not rely on fuel vehicles, which is the most important difference between BYD and other traditional manufacturers.
In 2020, BYD's new energy vehicle sales accounted for 44.4% of total sales, which was already a very rare sales structure at that time, and by 2021, the proportion almost doubled to 81.2%.
In the first quarter of this year, BYD's new energy vehicle segment sold 286,000 units, accounting for a further increase in passenger car sales to 98%. In March this year, in the case of fuel-free vehicles sold, BYD sold 104338 units, an increase of 160.9% year-on-year, a record high, of which DM models sold 50,674 units and EV models sold 53,664 units.
With the hot sales of the Dynasty series of new energy vehicles, BYD has also become the annual sales champion of China's new energy passenger cars. There is no doubt that new energy vehicles have become BYD's main source of profit, and the suspension of fuel vehicles will not have much impact on them.
Moreover, BYD's fuel vehicles are not only smaller than other brand fuel vehicles, but also account for a smaller and smaller proportion in their own product sequences, and BYD's resources are currently giving priority to new energy models.
In addition to the automotive business, BYD also has mobile phone components and assembly business, rechargeable batteries and photovoltaic business. BYD's 2021 financial report shows that in addition to the automotive business contributing 112.489 billion yuan of revenue to BYD, the revenue of mobile phone components and assembly business reached 86.454 billion yuan last year, and the revenue of rechargeable batteries and photovoltaics was 16.471 billion yuan, and the three sectors accounted for 52.04%, 40% and 7.62% of total revenue respectively.
BYD has also gradually opened the blade battery, DM-i hybrid system, and e-platform 3.0 to other car companies to increase hematopoietic capacity, so IT is reasonable for BYD to choose to stop production of fuel vehicles.
However, one thing that needs to be made clear is that although the external suspension of fuel vehicles is suspended, in fact, BYD's "oil cut" is not completely broken. The discontinued fuel car is just a word game of BYD, which is actually a single-engine traditional pure fuel vehicle, and the hybrid car can still belong to the category of fuel vehicles.
The wave of electrification is unstoppable
In the current situation that the fuel vehicle market is still huge, the following three reasons have made BYD make a decision to stop production and focus on the new energy vehicle market.
First of all, it is in line with the national policy trend of developing energy-saving vehicles. 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 new energy vehicles will surely become the main theme of the future automobile market.
The development of fuel vehicles in the market is entering an inflection point, more and more new energy vehicle companies will increasingly bring the market tendency to new energy vehicles, the traditional logic of fuel vehicles is becoming more and more difficult to meet the needs of the market, and it will be inevitable that fuel vehicles will be eliminated by the market. New energy vehicles are linked to "green", "innovation" and "sustainable development", and have received preferential treatment and support from various governments, from infrastructure support to policies and regulations, the new energy vehicle market is constantly improving and optimizing.
Secondly, international oil prices continue to rise, fossil fuel resources are in short supply, 70% of the mainland oil relies on imports, reducing dependence on oil is more urgent than any country, and new energy vehicles mainly rely on ordinary metal elements such as lithium iron phosphate, no longer rely on nickel and cobalt, effectively preventing foreign capital card neck, to solve energy security problems.
Finally, the accelerated development of the new energy automobile industry has also strengthened BYD's determination to abandon fuel vehicles. This is not only the choice faced by BYD, but also the choice problem facing all traditional car companies. And the rising market share of new energy vehicles is also forcing car companies to make decisions.
According to the data of the Association, at the beginning of 2021, the penetration rate of new energy vehicles will be 6%, and by the end of 2022, this figure has reached 28%. And Wang Chuanfu, chairman and president of BYD Co., Ltd., predicted at the China Electric Vehicle 100 Forum that according to the development rate in 2021, the penetration rate of new energy vehicles is expected to reach 35% in 2022.
Although electrification is the trend of the times, the current transformation schedule planned by car companies is relatively conservative. At the end of 2021, six major automakers, Named Volvo, GM, Ford, Mercedes-Benz, BYD and Jaguar Land Rover, signed a commitment to phase out the production of fuel vehicles worldwide by 2040.
Volkswagen announced last year that it would exit the internal combustion vehicle business in 2033-2035, with the U.S. and Chinese markets coming later and becoming carbon neutral by 2050 at the latest. BMW plans to reduce carbon emissions in the production stream by 80% by 2030; in the use of vehicles, BMW will accelerate the electrification offensive to reduce carbon emissions by 40%, but it does not mention the specific time to stop selling fuel vehicles.
In the blue ocean of the new energy vehicle market, car companies with broad horizons can keep pace with the times and turn the tide. In the long run, the industry is less and less fond of spending more research and development efforts on fuel vehicles, because no matter how powerful the engine technology, the efficiency and acceleration are not as good as electric vehicles. Nowadays, BYD has preemptively shifted its focus to new energy vehicles, which can undoubtedly seize the initiative in the future market competition.
Kanche said:
New energy vehicles have embarked on the historical stage, coupled with a number of new car-making forces stirring up the wind and rain in the market, the market's valuation logic for enterprises has quietly changed. Sales volume, profits, etc. are no longer the main indicators of enterprise valuation, and the market pays more attention to the future development prospects of enterprises. BYD has done a good job for other car companies, and many car companies will keep up with BYD's pace in the future and announce the suspension of fuel vehicles. The time for fuel vehicles to be replaced worldwide may not be so fast, and there is still a huge market space for fuel vehicles in many parts of the world, and the coexistence of fuel vehicles and new energy vehicles in the future may exist for a long time. Although pure fuel vehicles are still the largest automobile market, but after that.