With the suspension of fuel vehicles, BYD's sales will double in 2022

"BYD has ushered in a period of development that has never been seen in history, or an unprecedented period of growth."

In June 2021, Wang Chuanfu, chairman of BYD Group, stressed in a speech entitled "BYD's persistence".

On April 3, 2022, the moment BYD led the world's car companies to announce the cessation of production of fuel vehicles, the automotive industry seemed to feel the weight of the word "unprecedented".

"Stopping combustion" is really the trend of the times

Stopping the fuel vehicle business is not a new concept.

Car giants at home and abroad have watched Tesla and other new forces chisel out the kangzhuang avenue of electric vehicles, and they have also followed the entry bureau and carried out electrification transformation. "Stop the combustion" is often the last step in this series of transformations.

Some websites have specifically sorted out the timetable for multinational automobile groups to stop selling fuel vehicles, of which Toyota expects to achieve 100% pure electrification in China, Europe and North America by 2030, GM's models will be switched to 0 emission vehicles in 2035, and Kia will achieve full electrification in markets outside South Korea in 2040...

Source: Pacific Motors

Electrification is the trend of the times, and car companies need to start "decommissioning" at their own pace.

However, no one thought that among a number of traditional car companies, the most decisive and decisive is BYD, which announced that it would stop producing fuel vehicles at the latest, the earliest execution time, and the early "immediate immediately" execution.

BYD immediately "stops" and accelerates the implementation of "double carbon"

The general environment of "stopping combustion" is the gradual advancement of the national "double carbon" strategic goal.

Han Bo (deputy director of the Institute of Economics of Yunnan Academy of Social Sciences) said well that to achieve the "double carbon" goal, comprehensive green transformation is the core, carbon reduction is fundamental, and carbon sinks and negative emissions are complementary. It will fundamentally change our original production and lifestyle, and give birth to the development model of "technology is king".

BYD's strategic adjustment is highly compatible with "double carbon": under the guidance of the new development concept of "innovation" and "green", it will lead the transformation of the automotive industry with the impetus of scientific and technological innovation, and promote the sustainable development of society with green and low-carbon cycle. As Wang Chuanfu said,

"BYD should not only be a 'new energy champion', but also a responsible enterprise."

BYD Han EV Source: BYD official website

At the same time, the suspension of production of fuel vehicles and the entry into comprehensive new energy are also the needs of the market. Recently, Wang Chuanfu said in an interview with People's Daily, "We recently did a test at a local auto show, spent 5 days to observe the on-site car viewing behavior, and found that 60%-70% of consumers were watching new energy vehicles." ”

At present, the penetration rate of new energy vehicles in mainland China has increased by 16% in 2021 alone, reaching 22%, an average increase of 1.3 percentage points per month.

It can be said that the new energy vehicles in the early stage of development are mainly driven by policies, and at present, they have entered the market-driven period from the "policy + market" two-wheel drive, and the enthusiasm and vitality of the industry are being fully mobilized.

BYD Meta PLUS Source: BYD official website

It is worth noting that "stopping combustion" is not something that can be stopped if you want to. The reason why BYD can take the lead in pressing the stop button is inseparable from its long-term layout of main electric vehicles and the underpinning of opening up the vertical self-developed industrial chain and building a technical "moat".

Accelerating electrification, BYD "stops burning" water to a natural conclusion

First of all, BYD continues to increase the proportion of total sales of new energy models. From less than 40% in the second quarter of 2020, it climbed all the way to 98% in the first quarter of 2022.

In BYD's march 2022 production and sales report, for the first time, the production and sales of new energy models were equivalent to total production and sales, with single-month sales of more than 100,000 units, of which 54,600 were pure electric passenger cars and 51,400 plug-in hybrid passenger cars were produced. In the first quarter, 286,300 new energy vehicles were delivered, an increase of 333% year-on-year, ranking first among the new energy vehicle companies in China.

The excellent market performance has undoubtedly strengthened BYD's confidence in stopping production fuel vehicles.

Source: BYD March 2022 production and sales express

BYD's technical "moat"

In addition, opening up the vertical industrial chain and building a technical "moat" is also the confidence that BYD dares to be the first in the industry.

In the new energy automobile industry, BYD is the first automaker to open up the industrial chain and realize the self-developed production of batteries, IGBTs and electrification platforms.

In February 2022, BYD's battery market share has reached 21.24%, an increase of 5 percentage points over last year.

Image source: China Automotive Power Battery Industry Innovation Alliance

It should be noted that the "demon nickel" farce at the beginning of the year and the soaring price of lithium iron phosphate undoubtedly sounded the alarm for the new energy automobile industry, as Wang Chuanfu said, China was stuck in the neck by oil. Therefore, the development of new energy vehicles can not rely on nickel and cobalt, and it is imperative to solve energy security problems.

In order to solve this problem, BYD gave the answer sheet called blade battery, blade battery sample as its name, the shape of the flat shape, auxiliary heat dissipation at the same time, but also conducive to reducing the number of built-in electrode plate layers. Once damaged by external forces, the damaged part triggers a short circuit and generates less heat than ordinary lithium iron phosphate batteries.

In view of the endurance problem that lithium iron phosphate batteries are most easily criticized, blade batteries use lamination process. Compared with the winding structure, it has a more uniform current density and is more suitable for high-power discharge. For example, the new Tang EV equipped with blade batteries released on April 1 has a pure electric cruising range of 600-730km under CLTC test conditions.

BYD Tang EV Source: BYD Weibo

In the field of chips, BYD Semiconductor has also entered the supply system of many manufacturers while realizing the self-supply of IGBT chips. According to the data of the first half of 2021, BYD's power semiconductor device production capacity is 1.3 million, the output is 1.1052 million, the capacity utilization rate is 85.02%, and the production and marketing rate is 99.88%.

Platform architecture, BYD's DM-i super hybrid has changed the traditional hybrid technology mainly depends on the engine, oil-based design architecture, similar to range extended hybrid technology, so that when the car is running at low and medium speeds, the engine can always run in the most economical and efficient speed range.

The difference is that because the DM-i system adopts the mode of direct engine connection to the vehicle, it improves the operation efficiency during high-speed cruising, so that the overall fuel consumption is further reduced.

The core of this architecture lies in the Snap Cloud-Plug Hybrid special high-efficiency engine, EHS electric hybrid system, DM-i super hybrid special power blade battery.

DM-i architecture composition Source: BYD

In addition to the hybrid platform, BYD's pure electric e platform 3.0 has realized the platformization of three levels from three electric components - the key system of the whole vehicle - the whole vehicle architecture. The high degree of integration and the optimization of the battery structure as much as possible make the car with an A-class standard dimensions have a space and ride experience close to that of the C-class car.

For example, the Dolphin model equipped with this platform has a body of more than 4 meters and a wheelbase of 2700mm. With a small shape and excellent interior space layout, it is no wonder that it has achieved a single monthly sales of more than 10,000 in 2021, becoming a phenomenon-level explosive model.

BYD Dolphin Source: BYD official website

Technology empowers the new product matrix, which is BYD's decisive skill in selling all the way, and it is also the key to resisting the supply pressure. The lack of cores began in 2021, and the only two declines in BYD's new energy vehicle sales were in the off-season of the Spring Festival.

In general, BYD took the lead in stopping the production of fuel vehicles, one is the long-term focus on electric vehicles, full electrification has come to fruition; the second is the vertical integration of the industrial chain, batteries and IGBT self-sufficiency is conducive to dealing with the core problem of supply security, platform technology to empower the new model matrix, showing a strong competitive advantage.

BYD e-platform Source: BYD official website

So the question is, has BYD, which has completely transformed into a new energy vehicle company, reached the point where it can fight with Tesla?

In 2022, can BYD catch up with Tesla?

Sales only. From 2021 onwards, BYD's new energy model deliveries will be less than 1/3 of Tesla's, and with the passage of time, the sales gap between the two car companies will be decreasing.

The chart shows that in the first quarter of 2022, Tesla's growth momentum is gradually slowing, with a month-on-month growth rate of only 0.4%, almost stagnant; while BYD's growth rate is 7.6% month-on-month, and it is also in this quarter that Tesla's year-on-year sales gap was narrowed to 24,000 units.

Talk about production capacity. In 2021, BYD will deliver a total of 750,000 vehicles (including fuel vehicles), and in 2022, it will be put into operation with the blade battery production lines of the second phase factories in Qinghai, Xi'an and Chongqing, and BYD said that the delivery volume in 2022 is expected to reach 1.5 million units.

Tesla currently has a total capacity of 1.25 million units in its four gigafactories, with Tesla delivering a total of 936,000 units in 2021.

Therefore, in terms of production capacity, BYD is not inferior to Tesla; in terms of delivery trends, the beginning of the year ushered in a big sale, under the influence of the Spring Festival off-season, it will still narrow the gap with Tesla's delivery volume to the lowest value of 24,000 vehicles in recent years, and the prospect is quite optimistic; product supply and response to chip shortages, BYD comes with its own industrial chain advantages.

Overall, it is only a matter of time before BYD catches up with or even surpasses Tesla in terms of sales.

BYD Song PLUS DM-i Source: BYD official website

In addition to comparing sales, it should also be noted that BYD and Tesla are two companies with completely different market orientation, industrial structure and research and development direction, and can look at the development of the two with a more open eye.

BYD may still be on the road of intelligence, but the integration of the industrial chain, the launch of the platform ecology, the first to start the "stop fire" and other initiatives, but also highlight BYD's future-oriented and courageous Internet thinking, maintaining such momentum, BYD will become a more potential "light of guodian".

In 2022, BYD is very hopeful to usher in the year when the world's new energy vehicles reach the top.