| David
A paper announcement, BYD ran ahead of global car companies.
On April 3, BYD announced that it will stop production of fuel vehicles from March 3, 2022 and focus on pure electric and plug-in hybrid vehicles in the future.
After the announcement, BYD completely transformed into a new energy vehicle company and joined the new car competition. Behind BYD's radical and decisive, is the layout of fuel vehicles unavoidable? Or is it out of the confidence of integrated industrial technology?
Let go, All in New Energy
As soon as the announcement of the suspension of fuel vehicles came out, a common view in the industry was that for BYD, traditional fuel vehicles have long been a "chicken rib" in its automotive business sector.
"BYD stopped production of fuel vehicles, just like the Great Wall stopped production of cars." Some insiders said that they are all cutting short boards.
At present, BYD's fuel vehicles are few and far between: in addition to the song PLUS, Song PRO, two popular SUVs that still provide 1.5T + 7-speed dual-clutch power, only BYD F3, a low-end car that has been launched for 17 years, is left with a low-end car that understands the price of 37,900 yuan.
The data shows that in 2017, BYD fuel vehicle sales accounted for 72.4%, in 2021, fuel vehicles accounted for 18.5%, and by the first quarter of 2022, fuel vehicles accounted for only 1.7%.
According to the shell financial reporter investigation, BYD's total car sales from January to February this year was 185,600 vehicles, of which new energy vehicle sales reached 180,500 units, fuel vehicles in BYD's product structure has tended to be "invisible", and in terms of price, fuel vehicle sales accounted for 3/5 of the Price of Song fuel version of the model compared to Song new energy model Price Gap of nearly 1/3, only more than 100,000 yuan, in the brand power is also slightly insufficient.
BYD has been consciously shrinking the fuel vehicle business, and new energy practitioners found that "mainstream car manufacturers have no longer set up new fuel vehicle projects after a national survey in 2020."
Not only BYD, Changan Automobile and BAIC Group have earlier announced that they will fully stop selling fuel vehicles in 2025, Nissan and Honda are scheduled to fully stop selling fuel vehicles in 2025 and 2040 respectively, Toyota plans to stop selling fuel vehicles in China, North America and Europe in 2030, while its luxury brand Lexus will also be transformed into a pure electric brand in 2035.
BYD's direct suspension of production this time is quite aggressive compared with other car companies, and behind it may be confidence in its own products and technologies.
As early as 2003, BYD announced the acquisition of Qinchuan Automobile, aiming to establish a platform for the industrialization of automobile electric vehicles. Wang Chuanfu, chairman and president of BYD Group, stressed at the time: "The automotive power battery project will determine bydir's future. ”
Since 2008, BYD has seen the market potential of hybrid vehicles and launched the first plug-in hybrid model F3DM. Since then, BYD's plug-in hybrid technology has been iterative.
After several technical iterations, BYD's hybrid technology basically equaled the performance of major competing models, and in January 2021, BYD officially launched a new hybrid solution - DM-i super hybrid platform, and the three models based on the platform, Qin PLUS DM-i, Song PLUS DM-i and Tang DM-i, were launched simultaneously.
Unlike Geely Automobile, which only wants to complete the hybrid vehicle product line, Great Wall Motors wants to apply hybrid technology to high-end products, and BYD's hybrid technology route is more bold and effective.
As early as 2007, Wang Chuanfu boasted about Haikou, and in 2015 he will be the first in China and the first in the world in 2025. End of 2017. At the celebration of the 23rd anniversary of BYD's establishment, Wang Chuanfu put down his harsh words: it will reach trillions of yuan in revenue in 2025!
From this point of view, the reason for BYD's transformation is not difficult to understand, on the one hand, it is the implementation goal of "starting with the end", on the other hand, the fuel vehicle market is limited and intensified to shrink, BYD wants to achieve Wang Chuanfu's goal of the first market share in 2025, and must let go of a bo, All in new energy.
Range extender + pure electricity, into the hinterland of the newly built car
Not only is the transformation radical, BYD's pricing is equally bold.
"BYD's pricing has not only made the new forces uncomfortable, but also hit the fuel car hard." Khun Tong Fund risk control officer "Gray Cat" said. BYD's pricing strategy is to suppress fuel vehicles in the case of high oil prices, while making it difficult for new forces to digest cost pressure in the case of lithium battery price increases, and the new forces are currently losing money in an all-round way, and they are in a dilemma in pricing.
After the withdrawal of F3 fuel vehicles with a starting price of 45,000 yuan, BYD now starts at a pure electric A0-class car of about 100,000 yuan, while the DM-i plug-in hybrid starting price is 111,800 Qin Plus DM-i, and the mainstream price focuses on the range of 100,000 to 300,000. "Hantang opened up the high-end market, and DM-i plundered the home of fuel vehicles."
Some owners of joint venture cars said that even if everyone can't buy BYD, people who buy joint venture cars will buy more preferential joint venture cars because of BYD, "Without domestic competition, Toyota can't cut prices so fiercely." Leiling now has more than 25,000 discounts, and the landing price of the double engine deluxe version has dropped to less than 130,000."
Occupy the market first, then price. This is BYD's Internet play in the new energy market. This also directly caused BYD's unsightly financial report data.
The relatively aggressive pricing strategy has led to a further decline in BYD's profitability. In 2021, BYD's gross margin was 13.02%, a new low since 2013.
On the other hand, compared with BYD, Tesla has already embarked on a growth arc. Tesla achieved a profit margin of 30.6% in the fourth quarter of 2021, the highest level of any car company to date.
Whether national or global, BYD and Tesla are firmly in the top two positions of the new energy market.
From 2015 to 2018, BYD won the global new energy vehicle sales champion for four consecutive years. After Tesla was born, the global new energy vehicle sales champion changed hands, and Tesla's sales volume has been the first in the world for three consecutive years since 2019.
In recent years, Tesla's global market share has been declining, with its global market share of 17% and 16% in 2019 and 2020, respectively.
In 2021, Tesla's global market share of electric vehicles has dropped to 14.4%, but it still ranks first, and BYD, with a market share of 9.1%, ranks second.
In Q1 2022, BYD's domestic sales of new energy vehicles 284737 units, an increase of 433.4% year-on-year, while Tesla delivered 310048 units in China. The delivery gap between BYD and Tesla has been narrowing, from more than 120,000 vehicles in Q1 2021 to more than 20,000 vehicles in Q1 2022, in just one year.
Tesla and BYD have set the battery, motor, electronic control and other industrial chain self-developed self-production system and vehicle production process, compared with other new car forces, has a more obvious integration advantages and efficiency advantages.
Taking batteries as an example, Tesla and BYD have increased battery life by highly integrating battery design with vehicle design. Tesla's 4080 cylindrical CTC technology and BYD blade battery C to P technology are all technological innovations in the structure to battery capacity, which is difficult for those new cars with low integration to do.
Tesla and BYD are not only currently leading new energy vehicles, but also joining forces. In February, BYD announced that it had received an annual battery order from Tesla for 204,000. The competition and cooperation between the two will be the next direction of attention in the industry.
The way to compete with Tesla
On April 8, Tesla's gigafactory in Austin, Texas, was officially put into operation.
At present, Tesla has established its own production base in the three major global car markets in North America, China and Europe, and has six factories. The Shanghai plant and the Fremont plant in California are planning to expand production, and together with the Berlin plant, which is expected to have an annual production capacity of 500,000 units in March, Tesla is estimated to have a production capacity of 1.9 million to 2.7 million units in 2022.
By the end of 2022, BYD's actual available production capacity will reach 1.9 million vehicles, all in China, and the production capacity and transportation efficiency cost cannot be matched by Tesla.
In addition, in terms of brand degree, Tesla with its sense of science and technology and founder celebrity effect, in the market promotion is easier than other new cars, BYD although it has blade batteries, DM-i super hybrid, e platform 3.0 and other core technologies, but has a brand chronic disease, it is difficult to associate with high-tech new cars.
The German Motor Vehicle Management Center and the polling agency YouGov reported that tesla is the most innovative car manufacturer in the field of electric vehicles from the perspective of mileage, energy consumption and charging efficiency, followed by BMW, Audi, BYD and Mercedes-Benz. In contrast, manufacturers such as Toyota, Nissan, Honda and Fiat have been seen as laggards in the industry.
Cutting off the low-end, low-volume fuel vehicle business may be BYD's last resort in order to enhance its brand power. At present, BYD passenger cars are mainly divided into Dynasty Network and Ocean Network. Recently, BYD will successively launch high-end models, and Tesla frontal hard.
According to the analysts on the snowball, "Happy and Comfortable", entering 2022, the intention of the BYD brand to break through upwards is very obvious, as the price of BYD's flagship model Hantang, some models began to enter the price of more than 300,000.
From April to May, the Denza brand also returned to BYD with three blockbuster new cars (luxury MPV + medium and large SUV + fashion SUV), with the goal of seizing the mid-to-high-end market of 300,000-700,000 yuan. It is expected that by October, BYD's new luxury brand will also release a subversive new energy "hardcore off-road", when the price will further break through to about 1 million yuan level.
In addition, Tesla did not have hybrid-powered cars, which gave BYD a chance to raid.
According to reports, if European consumers buy electric vehicles, the most important thing is still the mileage. The U.S. and Chinese electric vehicle markets are dominated by pure electric vehicles, while hybrid vehicles occupy half of the European market, and the top brands are Mercedes-Benz, BMW, Volkswagen and Audi.
According to the BYD investor meeting, BYD's cumulative undelivered orders have reached 400,000 units, such as Song PLUS DM-i, BYD Dolphin and other popular new cars, and the waiting cycle is often as long as 3, 4 months or even half a year.
Of the 400,000 undelivered orders held by BYD, nearly 300,000 are DM-i models, and only 100,000 are pure electric vehicles. The supply of the former is much smaller than that of the latter, and BYD's official website shows that there are 16 pure electric vehicles on sale, while there are only 6 DM-i models.
It can be seen that the hybrid DM-i model is currently the most popular model for fuel transformation electric. In October 2021, the State Council issued the "Carbon Peak Action Plan before 2030", which stated that by 2030, the proportion of new new energy and clean energy powered transportation vehicles will reach about 40%.
Wang Chuanfu also proposed: adhere to the pure electric and plug-in hybrid "two legs" to walk.
BYD conservatively expects sales of 1.5 million units in 2022; if the supply chain is good, it will hit the sales target of 2 million units.
It remains to be seen whether BYD's internationalization can be smoothly promoted. Although China has demographic and policy dividends, it is obviously unrealistic to rely on China alone to compete with Tesla for the sales championship.
BYD's financial report shows that in 2021, its overseas sales volume was 15,363 vehicles, an increase of 107.75% year-on-year. However, from the perspective of model composition, among them, more likely to be the export of commercial vehicles such as pure electric buses and pure electric taxis.
"If there is no accident, BYD will become the first car company in domestic production and sales in 3 to 5 years." Some investors said. It is also said that 2 years is enough.
However, BYD, like other new car manufacturers in China, has also encountered two "card neck links" for new energy vehicles, one is the key mineral supply chain upstream of the power battery, and the other is the vehicle-grade chip supply chain. At present, the self-development rate of automotive chips in the mainland automotive industry is only 10%, and none of the top ten suppliers of automotive chips occupying 80% of the market are from China.
BYD used lithium iron phosphate blade batteries to avoid the former as much as possible, but the situation of the latter is not clear, and it is possible to repeat the tragedy of Huawei's "sanctions".
April 9 news, reportedly, Tesla Model Y equipped with 4680 batteries will be produced at the Texas Gigafactory in the United States, and is expected to be put into mass production at the end of the year or next year. Musk said that the Model Y alone can achieve the goal of 1 million vehicles per year, but this is far from enough, his goal is to have a 20% global market share.
On the other hand, BYD conservatively expects sales of 1.5 million units in 2022; if the supply chain is good, it will hit the sales target of 2 million units.
While Wei Xiaoli was still trapped in 100,000 deliveries, Tesla and BYD had launched an attack on millions.
Shen Yanan, co-founder of Ideal Auto, previously said that by 2030, there may be fewer than 10 car brands left in the world. The Chinese market will be dominated by 3 car companies, two of which are likely to be Tesla and Apple. Ideal hopes to become a third.
At present, it seems that in the competitive race of new cars, the rear situation is still unclear, only BYD closely follows Tesla to guard the top two positions, and narrows the gap in early 2022.
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