laitimes

BYD goes to the high end, not only is it difficult to spontaneously combust frequently

BYD goes to the high end, not only is it difficult to spontaneously combust frequently

Wen 丨 Ning Que Editor 丨 Baijin

Source 丨Zhengjingshe(ID:zhengjingshe)

After unloading the "burden" of fuel vehicles, BYD's troubles have not decreased much.

The clarity of the new energy trend, the big limelight of blade batteries, the competitiveness of the DM-i super hybrid platform, and the deeply rooted low-quality low-end image, high incidence of "spontaneous combustion" events, intelligent shortcomings and other stubborn elements are intertwined, which not only allows investors and consumers to hope and wait and see, but also makes its profit bottleneck and high-end difficulties clearly visible.

BYD goes to the high end, not only is it difficult to spontaneously combust frequently

01 The blade failed to erase "spontaneous combustion"

Founded in 1995, BYD first started by producing mobile phone batteries, and once did battery OEM for Nokia and Motorola, and once became the largest battery supplier in China. After acquiring Xi'an Qinchuan Automobile in 2003, he officially entered the automotive field. After being listed on the Main Board of Hong Kong in 2000, it became famous due to Buffett's entry. Under the rise of new energy vehicles in recent years, there is a sudden sense of enlightenment.

In The "100 Most Influential Companies in 2022" by Time Magazine, BYD is the only Chinese car company on the list, and it is also evaluated as the only new energy car company in China that hopes to compete with Tesla.

But along the way, BYD has not escaped the shadow of spontaneous combustion. Since 2022 alone, there have been three spontaneous combustion incidents: on February 13, a BYD Qin PLUS DM-i in Zhongshan, Guangdong Province, caught fire and burned on the road; on March 25, a new BYD Tang by a car owner in Shanghai spontaneously combusted, and the whole vehicle burned to the point that only a pair of frames remained; on April 2, a car spontaneous combustion occurred in a BYD 4s store in Shaoguan, Guangdong Province.

According to the incomplete statistics of the analysts of "Zhengjing Society", only in the domestic media reports in the past two years, BYD ranked first with 11 fire accidents, and many of its E5, E2, Tang, Qin and other models have spontaneous combustion incidents; while Tesla's fire accidents have only 5.

As early as 2020, BYD Chairman Wang Chuanfu said at the blade battery conference that the word "spontaneous combustion" should be completely erased from the dictionary of new energy vehicles. But facts have repeatedly proved that even BYD itself is still far from this dream.

Studies have shown that the aging of the battery itself, external collisions, extreme temperatures, electronic control systems, high loads, etc., may lead to fire.

In fact, behind the rapid development, "spontaneous combustion" has become a nightmare for the new energy automobile industry. Whether it is the big manufacturer Tesla, BYD, or the traditional car manufacturers GAC Group, Beiqi Blue Valley, or "Wei Xiaoli" and other car-making rookies, there have been spontaneous combustion incidents.

According to the latest data given by the Fire and Rescue Bureau of the Ministry of Emergency Management on April 3 this year, in the first quarter of 2022, there were 640 new energy vehicle fires, an increase of 32% year-on-year, equivalent to an average of 7 new energy vehicles "burning" every day.

A cluster of shocking flames not only consumes capital and consumer confidence in new energy vehicles, but also hinders BYD's eagerness to climb up.

02 The reason for "oil abandonment" is not simple

Analysts of "Zhengjing Society" noted that the reason behind BYD's recent hotly discussed announcement of "stopping the production of fuel vehicles" is not simple. It can be said that it is a natural success, and it can also be said that while "throwing off the baggage", it does not lose the opportunity to kick a heavy kick to the traditional fuel vehicle.

In a big way, after years of growth, new energy vehicles have reached the stage of rapid climbing market demand. In October 2021, the State Council issued the "Carbon Peak Action Plan before 2030", which clearly stated that by 2030, the proportion of new new energy and clean energy powered transportation will reach about 40%.

At the same time, compared with fuel vehicles, new energy vehicles have advantages such as energy saving and environmental protection, coupled with the gradual decline in prices, more and more consumers have begun to have.

On the other hand, BYD is one of the earliest car companies in China to focus on new energy vehicles, from the release of the first electric concept car in 2004, to today's 18 years. At present, it has completed the industrial chain layout of the core three electric vehicles of new energy vehicles, and obtained independent core technologies such as blade batteries, DM-i hybrids, and IGBT chips.

Among them, DM-i plug-in hybrid technology is an important innovation of BYD, which to a certain extent promotes the parity between plug-in and hybrid models and fuel vehicles. For example, Qin PLUS DM-i, Song PLUS DM-i, Tang DM-i and many other plug-in models have a starting price of only 30,000 or 40,000 yuan higher than the starting price of the same oil car.

Blade batteries are even more prominent. Its most advantageous place is that it does not use precious metal materials, which is cheaper than ternary lithium, and through structural design innovation, the energy density of lithium iron phosphate reaches the level of ternary lithium batteries of the same volume.

Back to BYD's fuel vehicle business, it was originally when new energy vehicles were still swaddling, and "cottages" came to earn some "fast money" while waiting and seeing the wind. At that time, the middle and high-end were things that could not be imagined, and could only take the low-end and low-quality route, which was also the root cause of BYD being labeled as "cheap", the reputation has not been good, and the market acceptance rate is not high.

Therefore, at present, the trend of new energy is already clear. For BYD, which has thrived on core technologies such as DM-i super hybrid platform and blade battery, the time is ripe to stop production of fuel vehicles and specialize in new energy.

According to public information, in the investor conference call in mid-December 2021, BYD positioned its target sales volume for 2022 at 1.2 million units, of which 600,000 were pure electric models and 500,000-600,000 plug-in hybrid models.

For the full year of 2021, BYD achieved total sales of 730093 vehicles, an increase of 75.4% year-on-year. Among them, the sales volume of new energy vehicles was 593745 (including 320,810 pure electric vehicles and 272935 plug-in hybrid models), an increase of 231.6% year-on-year, achieving the first domestic sales of new energy vehicles for 9 consecutive years, and the market share reached 17.1%.

In sharp contrast, the fuel vehicle business is weak, with sales already slipping to 140,000 units in 2021, down 41.7% year-on-year. Among the 104338 vehicles announced in March 2022, 53,664 were pure electric models, 50,674 plug-in hybrid models, and zero fuel vehicles.

03 From low to high, it is even more difficult

Starting from the foundry, by adhering to self-research all the way, BYD has gradually gained a foothold in the domestic new energy automobile industry, but there are also many troubles.

Judging from the financial report data, BYD has fallen into the decline of "increasing revenue without increasing profits". In 2021, the revenue was 216.142 billion yuan, an increase of 38.02% year-on-year; the net profit attributable to the shareholders of the parent company was 3.045 billion yuan, down 28.08% year-on-year.

Analysts from "Zhengjingshe" believe that the decline in net profit is related to the decline in new energy subsidies, and it is also related to BYD's long-term suppression in the low-end market: although a number of models have been laid out and listed in the two major fields of pure electricity and hybrid, the price is basically between 100,000 and 200,000 yuan.

To increase profits, BYD also needs to launch new models with higher prices to make a new round of highs, in other words, it needs to enter the high-end market.

But BYD's low-end brand image has long been deeply rooted in the hearts of consumers. As we all know, BYD's automobile business started at the low end and cottage, and many cities like to use BYD's new energy models as online car models, so the image of low-end and low-end has not changed.

It is easy for the brand to go down, but it is difficult to move up. This can be verified by the development of DENZA, a high-end brand under BYD.

Denza brand was founded in 2010, has launched Denza 300, Denza 400 and Denza 500, the price is between 300,000-400,000 yuan, but its voice in the new energy market has not been large, it is difficult to support BYD's expectations.

To this end, BYD also plans to create a new high-end brand to test the high-end market. Some sources declare that this new high-end brand may be a new energy hardcore off-road vehicle, and the benchmark is actually Mercedes-Benz Big G, which inevitably has the feeling of being too anxious, jumping too high and pulling pain.

What is more obvious is that intelligence is the most important competitiveness of high-end new energy vehicles, which obviously belongs to BYD's shortcomings. Its left-handed Baidu right-handed NVIDIA bet, competitors are also doing more, the variables are not small. In the two major areas of intelligent cockpit and intelligent driving, at least in terms of the current information, it has been subjected to complaints and complaints such as extremely poor experience and inability to upgrade, and there is no hope of significant improvement and surpassing competitors.

Time is running out, and the competition in the high-end market of new energy is becoming increasingly fierce. For example, Geely launched the new energy high-end brand Extreme Kr, and the Great Wall launched the new energy high-end brand salon, and so on. Even compared with them, BYD's advantages are not obvious.

It is worth mentioning that along with the problem of "spontaneous combustion" of BYD cars, there are also widespread doubts about its quality by consumers. In the case of BYD Han, consumers have repeatedly complained about its abnormal body noise, black screen of the car machine system and the failure of the automatic driving function. All of this, for its high-end road, is also very unfavorable. 【Produced by "Zhengjing Society"】

Editor-in-charge | Tang Weiping, Editor| Duhai Baijin, Editor| An An Proofreader| Ranran

Disclaimer: The views expressed herein are for reference only and should not be used as investment advice. Investment is risky, and you need to be cautious when entering the market

Friends who like the article, please pay attention to the serious society, we will continue to carry out value discovery and risk warning for listed companies

If you reprint any original article of Zhengjing Society, please keep the copyright information at the beginning and end of the article in its entirety, otherwise it will be regarded as infringement

Read on