With the help of the dual carbon strategy, BYD's "de-oiling" accelerates the transformation of the industry

On April 3, BYD announced that according to the needs of strategic development, it will stop the production of fuel vehicles from March 2022 and focus on EV pure electric and DM plug-in hybrid vehicles.

This means that BYD has become the world's first car company to discontinue fuel vehicles.

So why does BYD dare to be the first to eat crabs? Why did BYD choose to discontinue fuel vehicles at this time? What impact will THIS STRATEGIC ADJUSTMENT BYD have on the global automotive industry?

From the "quantitative change" of the new energy vehicle market to the "qualitative change" of today's discontinued fuel vehicles, BYD's move conforms to the direction of mainland industrial development and conforms to the development trend of the times, which is not only conducive to promoting the realization of the mainland's "double carbon" strategic goal and promoting sustainable social development with a green and low-carbon cycle; it also highlights BYD's ambition for the future and competes for the pyramid "top" of the global new energy vehicle market to lead the transformation of the automotive industry.

Conform to the trend of industrial development

At present, the mainland has clearly put forward the "carbon peak" in 2030 and the "carbon neutrality" target in 2060. According to relevant statistics, the transportation sector is the third largest carbon emission source in the mainland after industry and construction, and the carbon emissions of the automobile industry account for more than 80% of the carbon emissions in the mainland transportation sector, accounting for about 7.5% of the carbon emissions of the whole society.

Among them, the carbon emissions at the use end of the car account for 90% of the total carbon emissions of the car. According to the "China New Energy Vehicle Industry Development Report (2021)", compared with fuel vehicles, the carbon emissions of new energy passenger cars are reduced by about 15 million tons per year during the use phase. In order to accelerate the "double carbon" goal, the "Carbon Peak Action Plan before 2030" issued by the mainland clearly states that by 2030, the proportion of new new energy and clean energy powered transportation will reach about 40%.

It can be said that the development of new energy vehicles is not only one of the main paths to innovate and break through in the face of energy crises and challenges, but also one of the main paths to help achieve the goal of "double carbon", but also the only way for the mainland to move from an automobile power to an automobile power, and it is also one of the important forces for the development and transformation of the world's automobile industry.

As the global leader in new energy vehicles, BYD announced the suspension of traditional fuel vehicle production and the full development of new energy vehicles, which is precisely around the national "double carbon" strategic goal, adhering to the new development concept of "innovation" and "green", and leading the transformation of the automotive industry with the driving force of scientific and technological innovation.

"From a global perspective, it is a global consensus to combat climate change and achieve carbon peaking and carbon neutrality." Wang Chuanfu, chairman and president of BYD, said that the automobile industry, as the pillar of the national economy, has entered a new development stage of accelerating change and riding on the momentum, and new energy vehicles have become the top pillar for the transformation of new and old kinetic energy in the industry and the promotion of consumption, while new energy vehicle companies, including BYD, should firmly seize the opportunity to promote high-quality development of the industry.

Forward-looking layout creates water and water

According to data from the Ministry of Industry and Information Technology, sales of new energy vehicles will account for less than 15% of overall vehicle sales in 2021. So, why did BYD choose to announce the cessation of fuel vehicle production at this time?

Behind this is not only BYD's accurate judgment of industrial policies, leading the development trend of the global automobile industry; it is also an inevitable result of the "long-term layout" of new energy vehicles, and it is also a confidence in its technology and brand.

As early as 2006, BYD successfully developed the first F3e electric vehicle equipped with lithium iron phosphate battery; in 2008, BYD launched the first hybrid car F3 DM to the market; in 2018, when the new energy vehicle market was still not recognized by the market, BYD proposed to "clarify the ban on fuel vehicles as soon as possible"; today, BYD has completed the comprehensive layout of the new energy vehicle industry chain, from batteries to motors, from electronic control to vehicle-level chips, all have strong self-research and self-production capabilities.

This is also reflected in the market recognition, in the past March sales, BYD passenger car sales of 104338, an increase of 160.9% year-on-year. Among them, DM plug-in and mixed sales of 50,674 units, a year-on-year surge of 615.2%; EV pure electric models sold 53664 units, an increase of 229.2% year-on-year.

More critically, the mainland new energy vehicle market has entered a stage of rapid growth. According to relevant data, the penetration rate of the mainland new energy vehicle market has grown rapidly from 6% in January last year to 22% in December last year, with an average increase of 1.3 percentage points per month. For example, according to the speed of industry change last year, the market penetration rate of new energy vehicles in the mainland can reach 35% by the end of this year.

It is foreseeable that AFTER BYD has achieved from "quantitative change" to "qualitative change" in the layout of the new energy vehicle market, relying on its adherence to the green dream and its dedication to technological innovation, IT will enter a new stage of high-quality development.

According to BYD's plan, it will focus on pure electric and plug-in hybrid vehicles in the future, and is expected to sell 1.5 million units this year.

The butterfly effect may be set off

In fact, in the context of carbon neutrality, a number of multinational car companies have given a clear timetable for "no combustion and electrification transformation", and plan to stop production of fuel vehicles from 2025 to 2040.

Last November, at the 26th United Nations Climate Change Conference (COP26), six car companies, including BYD, Volvo, Ford, General Motors, Mercedes-Benz, and Land Rover Jaguar, signed the Declaration on Accelerating the Transition to Zero-Emission Cars and Trucks, aiming to achieve 100% of zero-emission vehicles and vans sold by 2040 or earlier.

Today, only 4 months apart, BYD has announced the suspension of fuel vehicle production, greatly improved the progress of "decarbonization", and become the world's first car company to stop production of fuel vehicles, which not only highlights the high-quality development of the mainland new energy vehicle industry, encourages Chinese car companies to accelerate the transformation of new energy vehicles, and fully grasps the opportunity of "lane change and overtaking"; it will also bring a demonstration effect to the transformation of the global automobile industry, which is expected to further promote the global electrification process.

Looking back at the rapid development of BYD and the new energy vehicle industry in the past few years, it can be found that whether it is the product electrification layout or the discontinuation of fuel vehicles, BYD's understanding and practice of the industrial electrification trend and the "double carbon" goal have been one step ahead.

Based on the correct judgment of the new energy vehicle market and the keen insight into policy requirements, BYD has accelerated the electrification process while also taking the lead in implementing carbon neutrality in the whole chain from the user end to the production end. In February 2021, BYD launched a carbon neutral planning study to explore carbon footprint standards for the new energy vehicle industry.

At present, in order to further promote the decarbonization of the whole industry, BYD is building a zero-carbon park, giving full play to its unique ecological advantages in the field of new energy, and combining green solutions such as photovoltaics, energy storage, new energy vehicles, cloud rail and yunba to achieve the "double carbon" goal at the production end. This year, BYD's "zero-carbon park" is expected to land in Shenzhen, which will be the headquarters of the first zero-carbon park for Chinese auto brands.

Author: Wei Hongquan

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【Source】 Southern Press Media Group South + client