Independent Scarce Penetration
Endure the pressure of pioneers and take the risk of martyrs
Author: Mu Ning
Editor: Hao Koko
Wind: Southern Words
Source: Rhodium Finance - Rhodium Finance Research Institute
The transformation must be thorough, and the brave man must break his wrist and be wolf-spirited and courageous.
Judging from BYD's recent actions, Wang Chuanfu has undoubtedly done it.
On April 3, BYD Automobile announced that it would stop the production of fuel vehicles, and the future automotive segment would focus on pure electric and plug-in hybrid vehicles, resulting in the birth of the world's first discontinued fuel vehicle company.
A stone thousand layers of waves.
There is a warning, at the end of 2021, at the United Nations Climate Change Conference, in the "stop selling fuel vehicles in 2040, completely replace fuel vehicles by new energy", Volvo, GM, Ford, Mercedes-Benz, BYD, Jaguar, Land Rover and other 7 signed, clearly indicating that the sale of fuel vehicles will be completely stopped in 2040.
In less than half a year, Wang Chuanfu fulfilled his promise. So the praise of "doing what is said" and "moving quickly" is endless.
Wang Chuanfu once said: "In a country as large as China, 70% of the oil energy is dependent on imports, the oil reserve is only 28 days, and only new energy can avoid being stuck in the neck of the oil card." ”
Indeed, combined with the broad market prospects, the maturity of technical iteration, the enthusiasm of capital support, the improvement of consumer acceptance, the gradual improvement of infrastructure and other factors, the transformation of new energy in car companies is imperative, but the length of time.
From this point of view, BYD's "oil cut" is a strength show. Pioneering the industry and embarking on a new path.
Just like that, is BYD's value a new "spring" coming?
01
Stop selling the truth kill four birds with one stone
Throw away the "chicken ribs"?
LAOCAI
At least for now, the outlook is still unclear.
In the past, BYD fuel vehicles not only had a low sense of existence, but also lowered the high-end attributes in the field of new energy. Some public opinion questioned whether the suspension of the sale of fuel vehicles was suspected of dragging oil bottles, and whether it was a commercial act of packaging.
According to the data, the latest March production and sales express report shows that BYD's new energy vehicle production in March was 106,700 units, with sales of 104,900 units, and the first monthly sales exceeded 100,000 vehicles, of which BYD's DM plug-in hybrid model sold 50,600 vehicles, an increase of 615.2% year-on-year EV pure electric model sales of 53,600 units, an increase of 229.2%. The production and sales of fuel vehicles are all 0.
Even if the dimension is extended, in the first quarter of 2022, bydir's cumulative sales of fuel vehicles were only 5049 units, a year-on-year decline of 89.78%, accounting for only 1.7% of total sales. In the whole of 2021, BYD Automobile sold 740,000 new cars and only 136,000 fuel vehicles.
So, the fundamental reason for BYD's "oil cut" is that the fuel vehicle cannot be sold at all?!
Moreover, the suspension of the sale of fuel vehicles means that BYD can also obtain higher income.
According to financial reports, the Administrative Measures for the Integration of Average Fuel Consumption of Passenger Car Enterprises and New Energy Vehicle Credits shows that car factories can obtain points similar to carbon emission quotas for the production of new energy vehicles.
In 2020, BYD received 467,525 units of points, which is expected to generate $350 million in revenue, equivalent to more than half of the company's net profit of 4.23 billion yuan in that year; however, BYD still sold a large number of fuel vehicles in that year.
To be fair, BYD fuel vehicles also have a glorious history, and even the brand power exceeds Geely, the Great Wall, and Changan. However, due to the failure to keep up with the trend of high-end transformation, it has slowly fallen behind. Until March 2021, its new energy vehicle sales exceeded that of fuel vehicles for the first time.
In addition to sales, the low-end differentiation is also obvious. For example, the price of Qin plus fuel models is as low as 100,000 yuan, and the entry price is even only 70,000 or 80,000 yuan, while the price of the electric version of the model directly rises to 145,000 yuan or even more expensive.
From this point of view, BYD's suspension of the sale of fuel vehicles can be described as killing four birds with one stone: throwing chicken ribs, playing advertising, winning subsidies, and upgrading the brand.
Of course, there is also a voice that believes that although by BYD, the "road" of fuel vehicles is very narrow, after all, it is two-legged walking. Cutting off one's own pulse early, there is no shortage of gambling considerations.
Not a deliberate boast. Looking at the industry, a small number of domestic car companies, including BAIC and Changan, will fully cut into electric vehicles in 2025. Most of the overseas car companies will be after 2030, and the aforementioned Volvo, GM, Ford, Mercedes-Benz, etc. will set the time for 2040.
Yu Shengmei, an industry analyst, said that the reason for choosing a gentle transition is that on the one hand, the fuel vehicle base of the above-mentioned car companies is larger. On the other hand, in the current new energy vehicle track, there are still many imperfect uncertainties in technology, industrial chain and supporting facilities.
Only by judging the hour and sizing up the situation and making a smooth transition can we go steady and far. Look at the recent suspension of Weilai's production and Xiaopeng's ideal price increase, it is not empty.
02
Subsidies increased net profit decreased
What about profitability? How aggressive is it?
LAOCAI
Focusing on BYD, there are also embarrassments and urgencies.
2021 can be described as a big year for its sales. Sales for the full year were 730,000 units, up 75.4% year-on-year. Among them, the sales volume of new energy vehicles was 593,700 units, an increase of 231.6% year-on-year, and sales accounted for more than 80%, and the cumulative sales of pure electric vehicle models and DM hybrid models were 320,000 units and 270,000 units, respectively, an increase of 44.9% and 467.6%.
The high-light performance of new energy is also where Wang Chuanfu dares to cut off a vein.
Embarrassingly, while sales broke new highs, profits were not satisfactory.
For the whole year of 2021, the revenue was 216.142 billion yuan, an increase of 38.02% year-on-year; the net profit was 3.045 billion yuan, down 28.08% year-on-year; after deducting non-recurring gains and losses, the company's net profit was 1.255 billion yuan, down 57.53% year-on-year.
The comparison of the industry is more intuitive: Great Wall Motor's revenue is 136.405 billion yuan and net profit is 6.726 billion yuan; Geely Automobile's revenue is 101.6 billion yuan and net profit is 4.847 billion yuan.
Compared with the top three, BYD has the largest revenue, the lowest net profit, and what is the quality of performance? Is something big but not strong?
Gross profit margin is also not optimistic, the overall gross profit margin of 13.03%, down 6.36 percentage points year-on-year, hitting a new low in nearly 14 years; of which the gross profit margin of mobile phone parts and assembly is 7.57%, and the gross profit margin of automobiles and related products is 17.39%. The gross profit margins of the two core business products are the lowest in the past 14 years.
It is worth noting that this is not real profitability. According to the 2021 annual report, BYD's new energy vehicle subsidy revenue totaled 5.867 billion yuan, and the government subsidy included in the profit and loss of the current period was 2.263 billion yuan, accounting for 57% of BYD's net profit.
If after deducting subsidies, BYD's actual profit in 2021 is less than 800 million yuan.
Stretching the dimension, from 2018 to 2020, BYD received government subsidies of 2.073 billion yuan, 1.484 billion yuan and 1.678 billion yuan, respectively. Net profit attributable to the mother was RMB2,780 million, MOP1,615 million and MOP4,234 million respectively.
In other words, BYD received more subsidies in 2021, and its net profit was worse than in 2020.
What an embarrassment.
The reason for chasing this may be an important consideration for other car companies that cannot stop fuel vehicles immediately--- cost.
According to 21st Century Business Herald quoted by BYD insiders, in 2021, due to the impact of the global epidemic, the short-term pressure on the electronic business was affected by factors such as rising raw materials and commodity prices, and the company's overall costs rose.
That's true. Taking April 6 as an example, Shanghai Steel Union data show that the average price of battery-grade lithium carbonate is 502,000 yuan / ton, compared with 53,000 yuan / ton at the beginning of 2021.
On the other hand, IT is difficult for BYD to offset costs through greater economies of scale in the short term.
Because the capacity is there. Judging from the data of the first quarter, production and sales are close to full production and sales, and they are basically in a state of full production and full sales. The minutes of the investor meeting after the release of the 2021 financial report also revealed that BYD's cumulative undelivered orders reached 400,000 vehicles, and it is still increasing month by month.
From this point of view, after the oil cut, whether it can really boost profitability and get rid of doubts is still a time test.
Therefore, the radicality of decision-making has to be said.
Dolphin Investment Research pointed out that the main reason for the decline in the company's gross profit margin comes from the change in the model structure of the revenue side and the aggressive pricing strategy on the one hand, and the price increase of upstream raw materials on the cost side on the other hand.
As mentioned above, in March last year, BYD's fuel vehicles still accounted for more than 40%. In the first quarter of this year, it accounted for less than 2%.
It is difficult to imagine how fierce BYD's product structure adjustment and transformation have been in the past year.
From Wang Chuanfu's remarks, we may be able to glimpse one or two. "At this stage, it is not too much to use the term 'fighting a war', and it is necessary to make decisions quickly when fighting a war, change it if it is wrong, adjust it in the process of implementation, and iterate quickly."
"Rapid iteration" is true, but the question is, is it necessary to control the scale? Is it scientific to readjust the industrial structure so drastically within a year? Is there a negative impact behind the righteousness? Overconfident and aggressive?
The steps are too big and easy to pull the crotch. Run too fast, be wary of falling.
Moreover, looking at the road of new energy, BYD still has bottlenecks that have not yet been broken.
03
Intelligent short board
It's not easy to eat a good professional meal
LAOCAI
The biggest constraint is more intelligent. Entering the second half of the track, intelligence is almost synonymous with high-end and quality of new energy vehicles, and it is also the most core competition of each company.
Wilson monitoring data shows that from January to July 2021, the average price of BYD bicycles was 151,800 yuan; the average price of Weilai bicycles was 432,900 yuan.
When it comes to BYD's intelligent shortcomings, it has been a cliché, but it has to be talked about.
Media commentator He Xi believes that compared with the new forces such as Xiaopeng, Weilai, and Ideal, as well as foreign brands Such as Tesla, BYD's biggest shortcoming is product intelligence, such as intelligent cockpit, car machine system, Internet of Vehicles, automatic driving and other fields BYD is not enough to compete with competitors. In terms of brand building, BYD still has a cheap and low-end label in the hearts of many people, and how to build a high-end brand and product intelligence in the future is the direction of BYD's thinking.
On February 25, 2022, BYD selected Baidu as its intelligent driving supplier. Baidu provides it with an INTEGRATED ANP intelligent driving product and a man-machine co-driving map. It is reported that the Baidu intelligent driving team has entered the field in advance to cooperate with BYD for development, and will soon achieve mass production of cooperative models.
This is seen as an important measure to fill the gap. Just looking closely, there are also variables.
In fact, as early as April 2018, BYD took the lead in reaching a strategic cooperation with Baidu. However, before BYD, Baidu's Apollo program has 99 partners.
Another friend, Nvidia, partners include GM Cruise, Didi, Kodia and other autonomous driving companies, but also with Mercedes-Benz, Jaguar Land Rover and other global car companies, as well as China's "Wei Xiaoli", SAIC Zhiji and other new forces to reach commercial cooperation.
In other words, how many characteristic barriers and core advantages of the above empowerment are worth observing.
In addition to intelligence, the improvement of basic quality control is more urgent.
On April 6, the vehicle quality network number [725963] complaint shows: the front end of the vehicle into the cab during the operation of the air, the left side of the door is also such as the air intake, when the internal circulation of the three hot air, if someone speaks to produce ha gas, directly on the front windshield inside, resulting in blurred vision can not see, seriously affecting safety, there is a great safety hazard. At this time, you must immediately open the outer loop to stop talking, in order to slowly see the front.
On April 5, the number [725684] showed: BYD Qin car 16 years to buy, the last six months feel that the battery life is very poor, only 6-7 degrees of electricity, these days to the 4S shop test, the test of 7.7 degrees of electricity, the original was 13 degrees, the whole attenuation of 41%, the request to replace the battery, 4S shop refused. Hope to solve it as soon as possible.
......
(The above complaints are reviewed by the platform)
Speaking of thousands of ways, product quality is king, especially the new energy track with higher sensitivity. The above slot points are vigilant against the average values of BYD and Wang Chuanfu, who are eager to transform. Are you really ready to bet on new energy?
04
A real voice
LAOCAI
Yes, behind the self-cutting and focusing, it is not easy to eat the professional rice of new energy.
Whether it can usher in the "new spring of value" is still the strength to speak.
Objectively speaking, "cutting off oil" and stopping the sale of fuel vehicles is a driving force for the accelerated transformation of the industry. It can also release more new energy production capacity, and its contribution to one battle, there is a scale effect of Libya Di.
For example, in terms of blade batteries, BYD said on a conference call a few days ago that the scale effect and yield improvement of the battery can bring cost optimization and return the lithium iron phosphate route to the main track. It has a high degree of competitiveness in chemical composition, structure and production process, which has helped the company's model competitiveness to be significantly improved.
In addition, although BYD has abandoned fuel vehicles, the hybrid is still in production, and it can also make up for the market to a certain extent.
Industry analyst Li Chen believes that BYD's super hybrid system DM-i has a high reputation in the current independent brand, and the technology is excellent, even comparable to Toyota. Thanks to the system, the 2022 Song MAX DM-i 100 km of power loss fuel consumption is as low as 4.4L, and the travel is as low as 0.3 yuan per kilometer; Commuting in the city can choose pure electric mode to achieve zero fuel consumption for daily travel; With the support of extreme fuel consumption, the comprehensive endurance can reach 1090 kilometers. It is also a good transition between fuel oil and new energy sources.
Obviously, BYD and Wang Chuanfu have the confidence to bet on the treasure, not blindly eyeballs. When encountering performance bottlenecks, it also needs to be broken and established.
However, before opening the industry, we must also endure the pressure of pioneers and take the risk of martyrs. In the crisis of mutual manifestation, whether it can really make a miracle and do a good job of the first crab eater, the hero's broken wrist is only the beginning, and the follow-up quality polishing, refinement, professional precipitation, and technical advantage shaping are the key.
The new energy automobile industry has ushered in a new wave. Value advancement, or regret folding, a real force to speak.
This article is original for Rhodium Cai
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