【Introduction: On the evening of April 3, BYD 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 sector in the future, which is also the first car company in the world to officially announce the suspension of sales of fuel vehicles. The reasons behind BYD's decision are worth exploring. 】
In the domestic new energy vehicle market, in fact, IT can compete with Tesla in terms of volume. New forces such as Wei Xiaoli have just achieved an annual sales scale of 100,000 units. This time, BYD completely cut off the fuel vehicle business, which will help it further consolidate its advantages in the field of new energy vehicles and launch an impact on Tesla.
The proportion of fuel vehicles is negligible
From the sales data, in 2021, BYD's annual sales reached 730,000 units, of which the sales of new energy vehicles reached 604,000 units, accounting for more than 83%. From the perspective of sales this year, although BYD's sales have repeatedly reached new highs, BYD's fuel vehicle sales in January and February were 4635 and 5049 respectively, and the production and sales data in March have been shown as 0. In stark contrast, in March, BYD's monthly sales exceeded 100,000 units for the first time in its history, reaching 104878 units, an increase of 333.06% year-on-year. In the mournful domestic automobile market, it is very difficult to achieve this result. Such a beautiful report card also strengthens BYD's determination to transform into new energy vehicles.
In the case of a small proportion of sales, IND is not much competitive in the field of traditional fuel vehicles. Whether from the perspective of brand appeal or product strength, BYD does not have much advantage in the field of traditional fuel vehicles compared with giants such as Volkswagen and Toyota. In particular, the current layout of volkswagen, Toyota and other auto giants in China has been very perfect, whether from the perspective of production capacity or product line, it is impeccable. In this case, BYD does not have to maintain its own fuel vehicle business.
Hybrid replacement of fuel vehicles is likely to become a major trend
In fact, unlike many car companies that have officially announced that they will enter the field of pure electric, BYD also maintains plug-in hybrid technology in addition to the pure electric market. According to BYD's sales data, in the whole year of 2021, BYD's total sales of new energy vehicles 593745, of which the cumulative sales of EV pure electricity were 320,810, and the cumulative sales of DM hybrid were 272935, and the situation of the two technical routes in the proportion of sales has been formed.
From a performance point of view, there is not much difference between hybrid models and conventional diesel locomotives. In the case of limited battery power, consumers can choose to drive it with fuel. This can effectively make up for the lack of range anxiety and charging time of electric vehicles. However, because a car is equipped with an internal combustion engine and two sets of pure electric powertrain systems, the weight of the vehicle will be relatively large, so it is necessary to solve the problem of greater fuel consumption in the case of power loss in the early design stage, that is, it is necessary to sacrifice a part of the power in exchange for fuel economy. In the future, as emission regulations in China, Europe and other places become more and more stringent, stopping the sale of fuel vehicles and turning to the sale of hybrid vehicles is not only a transitional stopgap measure, but also more and more important for car companies. In the case that the energy density of batteries is still insufficient compared with fossil fuels, hybrid technology will still have its place in the future for a period of time.
BYD urgently needs business focus
According to the financial report data, BYD's revenue in 2021 reached 216.142 billion yuan, an increase of 38.02% year-on-year. However, in stark contrast to the continuous rise in revenue, the profit attributable to the parent company was only 3.045 billion yuan, down 28.08% year-on-year. In the automotive sector, which accounts for more than half of ATD's revenue, its gross profit margin fell by 7.81% year-on-year to only 17.39%, a new low in 14 years. However, what needs more attention is that after deducting government subsidies of up to 5.867 billion yuan (the government subsidies included in the profit and loss of the current period were 2.263 billion yuan), BYD's actual profit in 2021 was only 782 million yuan. In 2022, BYD's gross profit margin pressure will continue to be under pressure: the market quotation of battery-grade lithium carbonate has risen from 50,000 / ton at the beginning of 2021 to the current 500,000 / ton, which has directly led to the collective price increase of domestic electric vehicles this year; and the price of battery-grade cobalt and nickel required for ternary lithium batteries has also been affected by the Russian-Ukrainian war and has risen sharply.
In addition, according to relevant data, by the end of 2021, the national passenger car production capacity totaled 40.89 million units, and the capacity utilization rate was only 52.47%. In particular, 36 of these car companies have a capacity utilization rate of less than 20%, which is in a deep loss. Despite the overall overcapacity, there are still 10.46 million vehicles under construction in the mainland, and most of the capacity under construction is new energy vehicles, not to mention that the production capacity of many traditional car companies can also be transformed into new energy vehicle production capacity through transformation. In this case, especially luxury brands like Porsche, Lotus, and BBA entering pure electric vehicles, bydir's electric vehicle market will inevitably face a price war in the future.
With the start of domestic new energy vehicle subsidies to zero in 2023, BYD is still facing great pressure on profitability. Therefore, cutting off the fuel vehicle business at this time, on the one hand, can reduce the complexity of the model matrix, whether from the perspective of research and development, manufacturing, logistics or market promotion, more resources can be focused on the new energy vehicle sector; on the other hand, in the already fiercely competitive fuel vehicle market, BYD does not have the ability to seek higher product premiums and gross profit margins. Therefore, in this case, the timely strategic changes and cutting off the fuel vehicle business are also to improve the company's profitability.
Comments
For BYD, compared with the three-electric system, it still has many shortcomings in automatic driving that need to be filled. Therefore, in order to truly grow into a global car company and compete with Tesla for the throne of the world's largest new energy vehicle champion, BYD still needs to invest a lot of money in automatic driving. Cutting off the fuel vehicle business can also raise more funds for its own self-driving business.
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