BYD's broken arm fuel car, how is the road ahead?

Image source: Visual China

Earlier this year, Volkswagen CEO Herbert Dies told Fortune that "even two years ago, there were many people who thought it would be better not to produce electric cars in Wolfsburg." ”

"The opposite is true now. People genuinely ask us to make changes quickly. The established giant, which acknowledges that "the era of traditional automakers is over," has set the clock for a full goodbye to fuel vehicles to 2035.

The world's first decision to announce the discontinuation of fuel vehicles came more quickly than expected.

On April 3, BYD announced that it will stop the production of fuel vehicles from March 2022, and in the future, BYD will focus on pure electric and plug-in hybrid electric technologies in the automotive sector.

This "ALL IN" new energy move caused a heated discussion for a while, in fact, BYD just did the one that broke the window paper - on the one hand, it frankly catered to the industry prospects of the new energy trend; on the other hand, from the absolute proportion of new energy vehicles in BYD's automobile sales, the suspension of fuel vehicles is nothing more than a natural success.

According to the production and sales express, from January to March this year, the cumulative sales of BYD fuel vehicles were only 5049 units, down 89.78% year-on-year, accounting for only 1.7% of the total sales; compared with the cumulative sales of new energy vehicles in the first three months of 104878, an increase of 422.97% year-on-year. In 2020, BYD's sales of new energy vehicles accounted for 48%, and the sales of new energy vehicles and fuel vehicles were roughly equivalent.

Almost at the same time that BYD officially announced its full entry into new energy, Tan Xuguang, chairman of Weichai Group, publicly poured cold water on new energy vehicles, "New energy vehicles, especially passenger cars, will have a catastrophic overcapacity." Weichai sings down, BYD does more, although the two hold different positions, but this contrast is indeed quite eye-catching. The risks faced by new energy vehicles are far more than overcapacity.

In December last year, the National Development and Reform Commission and other four departments jointly issued the "Notice on the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles in 2022", indicating that the subsidy standard for new energy vehicles will be reduced by 30% on the basis of 2021; at the same time, it is clear that the subsidy for new energy vehicles will be terminated on December 31, 2022. It is worth noting that in 2021, BYD received government subsidies of up to 2.3 billion yuan, accounting for 57% of ATD's net profit.

According to the financial report, the gross profit margin of BYD's auto business in 2021 fell by 17.39% year-on-year, and the net profit also fell by 28.08% year-on-year to 3.045 billion yuan. The disappearance of policy dividends will be a big test for BYD to increase revenue and not increase profits, but the decline in subsidies also means that the new energy automobile industry is moving towards a mature period, and with the blessing of technology iteration, the market-oriented growth path will become clearer.

The rising price of raw materials also brings more uncertainty to BYD's choice to "break away" fuel vehicles at this point in time. Affected by multiple factors such as industrial cycle, epidemic situation and international tensions, the cost of raw materials in the upstream of the automobile manufacturing industry has been expanding, such as the price of lithium carbonate per ton of battery grade has increased 10 times in one year. On April 6, according to data released by Shanghai Steel Federation, the average price of battery-grade lithium carbonate was 502,000 yuan / ton, while the average price of battery-grade lithium carbonate at the beginning of 2021 was 53,000 yuan / ton.

Since the beginning of this year, BYD has implemented two price adjustments to cope with the impact of rising raw material prices and subsidies. For the challenge of soaring raw material prices, Wang Chuanfu said, "China cannot be necked by oil trucks in the era of fuel vehicles to be necked by metal cards such as cobalt and nickel in the era of electric vehicles." He suggested comprehensively sorting out the layout and production capacity of lithium carbonate resources, increasing domestic mining and foreign imports, maintaining market supply and demand, stabilizing price expectations, and promoting the healthy and safe development of the industry.

Compared with the risks faced by the industry, the opportunities seem to be more significant in the new energy field, where every giant and challenger is rushing to pour in: Ford announced a "split" and named the division focusing on electric vehicles as Model E; Volkswagen joined hands with Huayou Cobalt and Tsingshan Group to lay out the battery raw material supply chain; on April 5, General Motors and Honda announced that they would jointly launch "affordable" electric vehicles. Almost every giant who is desperate to get rid of the shackles of the "traditional" label under the torrent of the times will sniff the frenzy and potential profiteering growth of this track, and it is only an inevitable choice to join it.

But Wang Chuanfu has come to this spring of new energy vehicle "chaos fighting", and it has been 18 years. When he acquired Xi'an Qinchuan in 2003, Wang Chuanfu was blunt about his intentions: "Xi'an Qinchuan can be used as an entry point to enter China's electric vehicle market." ”

All along, the accumulation of fuel vehicles may only be the pre-background of BYD's comprehensive entry into electric vehicles, and a number of hard powers in the fields of batteries and chips also determine that it has unique advantages.

BYD, which started with batteries, has never given up its layout in the field of batteries. At present, BYD has built or is planning in the power battery base reached 17, has been built 8, if all power battery bases are successfully built, the total battery production capacity is expected to exceed 400GWh.

In March 2020, Wang Chuanfu introduced his ace product, "Blade battery reflects BYD's determination to completely end the safety pain points of new energy vehicles, and is more capable of returning the global power battery technology route to the right path, completely erasing the word 'spontaneous combustion' from the dictionary of new energy vehicles." "And the upcoming mass production of Tesla's new sickle , the 4680 battery , may allow BYD and Tesla to start a head-on battle again in the battery field."

Recently, Musk also released a heavy news "spoiler".

On April 1, Musk tweeted that Tesla will switch from batteries to hydrogen in 2024. He also mentioned that the first vehicle to run on hydrogen fuel will be aptly called the Model H. In March last year, Musk also made a clear statement on Twitter to evaluate hydrogen fuel cells as "fool batteries", and Volkswagen CEO Diess also gave a similar judgment.

At present, the tweets that turn to hydrogen energy have been deleted from the personal homepage of Twitter's new major shareholder, but the clamor of discussion has not stopped: Is this Musk's fixed program on April Fool's Day, or is it as the industry speculates that the mass production of the new 4680 battery has encountered a bottleneck, or foreseeing the limitations of rising battery costs in the future, and has to continue to focus on hydrogen fuel cells?

I believe that in the short term, this unpredictable style of "multi-threaded entrepreneur" will not reveal his intentions. However, on March 23 this year, the National Development and Reform Commission and the National Energy Administration jointly issued the "Medium and Long-term Plan for the Development of the Hydrogen Energy Industry (2021-2035)", and the future of hydrogen vehicles has been included in the development plan.

The "Planning" mentions that by 2025, the number of fuel cell vehicles will be about 50,000, and a number of hydrogen refueling stations will be deployed. At the same time, based on the basic conditions such as local hydrogen energy supply capacity, industrial environment and market space, combined with the development characteristics of the road transport industry, we will focus on promoting the application of medium and heavy vehicles in hydrogen fuel cells, orderly expand the application space of new energy passenger and cargo vehicles such as hydrogen fuel cells, and gradually establish a complementary development model of fuel cell electric vehicles and lithium battery pure electric vehicles.

High costs, technical bottlenecks to be broken through and many other practical factors, restricting the development of hydrogen energy vehicles, last December, BYD in the investor platform clearly replied that the company has not mass production of hydrogen fuel cell products and hydrogen fuel cell models planning, but also mentioned that "will pay close attention to the development of related fields."

Earlier, it was reported that BYD insiders said, "Now the market and emerging battery technology, BYD has research, but at present it is still the company's mainstream research and development direction with the existing product line." Combined with more than 100 patents applied by BYD in the early years, including hydrogen fuel cells, methanol fuel cells and microbial fuel cells, as well as patents on methanol hydrogen production, hydrogen storage and transportation, perhaps BYD is not without ambition and layout for the future of hydrogen energy."

BYD, which calls itself the "leader of new energy vehicles", still has many challenges to cross the road to true kings, but like the decision to abandon the old calendar announced recently, the momentum is only one of the by-products. Where the next point of time will fall, how long it will be brewing, this timetable may have been engraved in Wang Chuanfu's plan. (Fortune Chinese Network)

Editor: Anqi Yang

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