BYD Chairman Wang Chuanfu Image Source Network
BYD (002594. SZ) waved, bid farewell to the fuel car, and chose the "All in" new energy vehicle. This rhythm is somewhat surprising to the outside world.
On the evening of April 3 this year, BYD announced that it would stop the production of fuel vehicles from March 2022. In the future, BYD will focus on pure electric and plug-in hybrid vehicles in the automotive sector. This official announcement means that BYD has become the world's first traditional car company to officially stop production of fuel vehicles.
Image source BYD official
BYD's move, seemingly sudden, is actually traceable - in June 2021, when the agency surveyed, BYD revealed that it will be fully electrified in the future. In 2020, the sales volume of fuel vehicles is 230,000 units, and the internal sales volume in 2021 is expected to be about 150,000 fuel vehicles, and the planning of fuel vehicles has been stopped, and it will be fully replaced as soon as 2022.
On the other hand, from the sales point of view, in March 2021, BYD's new energy vehicle sales officially surpassed fuel vehicles, accounting for 59.33% and 40.66% of the sales volume respectively. Since then, its new energy vehicles have continued to soar, and even let BYD ascend to the throne of the domestic new energy vehicle sales champion in 2021. In January and February this year, BYD's new energy vehicles accounted for 97.3%, and fuel vehicles accounted for only 2.7%, becoming an indispensable existence.
BYD fuel vehicles and new energy vehicles sales accounted for (%) Data source: company announcement
It can be seen that BYD's choice to stop production of fuel vehicles is a long-term plan. But the speed of its All in new energy vehicle process is still somewhat unexpected, after all, its new energy vehicles will only begin to take off in 2021. Before that, the sales of its new energy vehicles even declined for a while.
What makes BYD's new energy vehicles rise rapidly? Where did it come from to say goodbye to fuel vehicles so quickly?
Two major killers helpED take off
FOUNDED IN 1995, STARTED WITH THE BATTERY BUSINESS, ACQUIRED XI'AN QINCHUAN AUTOMOBILE FACTORY IN 2003 TO ENTER THE AUTO INDUSTRY, AND SET UP AN ELECTRIC VEHICLE R&D TEAM "FORESAVER", BECOMING A "Pioneering Cow" in China's new energy automobile industry. In December 2008, BYD launched the world's first mass-produced plug-in hybrid car, the F3DM.
In 2010, the Chinese government opened the floodgates for new energy vehicles - the subsidy scheme for individual purchase of new energy vehicles came out, sounding the clarion call for the development of the new energy vehicle industry. However, due to safety, endurance and other issues, in the following many years, even if there are subsidies, the penetration rate of new energy vehicles has not risen quickly. It wasn't until the end of 2020 that penetration rose to 6 percent.
During this period, BYD's sales of new energy vehicles even shrank for a time - from 2018 to 2020, sales were 247,800 units, 229,500 units, and 189,700 units, respectively, decreasing year by year.
With the support of policies, technological progress and product enrichment, the penetration rate of New Energy Vehicles in China has increased rapidly in 2021, from 6% at the beginning of the year to about 20% at the end of the year. This year was also a year of blowout sales for BYD - new energy passenger car sales were 593,700 units, an increase of 231.6% year-on-year. BYD is both a beneficiary and a promoter of the rapid increase in the penetration rate of new energy vehicles.
BYD new energy passenger car sales and growth rate
Technological progress can be said to be the most important driving force for the rapid increase in the penetration rate of new energy vehicles and the blowout of BYD's sales. And this is inseparable from BYD Chairman Wang Chuanfu.
In 1987, Wang Chuanfu graduated from Central South University of Technology (now Central South University) majoring in metallurgical physical chemistry, and entered the Beijing General Institute of Nonferrous Metals Research in the same year to pursue a master's degree, the major is still related to batteries, after graduating in 1990, he stayed in the hospital to work, and did the work in batteries. In other words, Wang Chuanfu himself is an expert in the field of batteries.
In terms of research and development investment, Wang Chuanfu is also very willing, and he is even called a "technology maniac". From 2018 to 2020, BYD's R&D investment exceeded 8 billion yuan.
Source: BYD Annual Report
Years of high R & D investment and technical precipitation, so that BYD in 2020, 2021 has successively sacrificed the "blade battery" and "DM-i super hybrid" two major killers. It is also really these two major killers that have caused BYD's sales to soar.
In March 2020, BYD released blade batteries. The battery uses lithium iron phosphate technology, which not only increases the volume utilization rate by more than 50%, but also reduces the manufacturing cost by 30%.
BYD's first-generation blade battery has an energy density of 140Wh/kg and a volumetric energy density of 230Wh/L. The battery was first applied to the pure electric model - BYD "Han", with a maximum endurance of 605km. According to the plan, it is expected that in 2025, the single energy density of BYD blade batteries will reach 180Wh/kg, the system energy density will be increased to 160Wh/kg, and the volume energy density will be increased to 330Wh/L.
Blade batteries can effectively alleviate the range anxiety of car owners, and safety is relatively high. And these two points are the pain points of many new energy car owners.
BYD Han, equipped with blade batteries, can be said to be the culmination of BYD's technology. "Han" also lived up to expectations, and after its release, it attracted the attention of the market. The listing of "Han" also successfully led BYD to break through the bottleneck in the field of pure electricity - unveiled in April 2020, listed in July, and reached the level of monthly sales of more than 10,000 in November, with annual sales of 40,556 vehicles, accounting for 22% of BYD's total sales of new energy passenger cars that year.
BYD "Han" image source network
The release of blade batteries and the listing of "Han" have given the market hope. In the secondary market, BYD's "Ren Dou Second Pulse" has also been opened up - BYD, whose stock price has been sideways for many years, has continued to soar after the "Han" listing and hot sales.
February 2014 - April 2022 BYD stock price Graph source Oriental Wealth
In 2021, BYD's new energy passenger car sales increased by 231% year-on-year, and DM-i super hybrid technology also contributed.
Released on January 11, 2021, dm-i Super Hybrid is an electrically-based architecture that enables more power, less oil, and efficient oil use. When the power is sufficient, the DM-i super hybrid is a pure electric vehicle; when the power is insufficient, it is an ultra-low fuel consumption hybrid. The model of this technology has a pure electric mileage of up to 120 kilometers and a comprehensive mileage of 1200 kilometers of oilable electricity.
"We want to let the DM-i super hybrid enter the compact car, medium and large SUV segments, kill a blue ocean in the Red Sea, and accelerate the replacement of traditional fuel vehicles by new energy vehicles." At the DM-i platform conference, Wang Chuanfu said with confidence.
He didn't brag. As the world's first model equipped with DM-i super hybrid, BYD's "Qin PLUS DM-i" was launched on March 8, 2021, priced at 107,800-14.78 million yuan. With excellent performance and moderate price, Qin PLUS DM-i became popular after its listing, with sales of up to 83,456 units in 2021, accounting for 14% of BYD's total sales of new energy passenger cars that year.
Qin PLUS DM-i image source BYD official website
Subsequently, BYD's "Song PLUS DM-i" and "Tang DM-i" were released, both of which achieved good results. At the 2021 annual report exchange meeting at the end of March this year, BYD said that the delivery cycle of DM-i in 4S stores may take 4-5 months, which shows the popularity of DM-i models.
Excellent performance and sales, so that BYD DM-i Super Hybrid won the "Heart of China" 2021 Top Ten New Energy Power System Award. Behind this honor is BYD's technological accumulation for more than ten years. Yin Chengliang, deputy dean of the Automotive Engineering Research Institute of Shanghai Jiao Tong University, said, "BYD Qin PLUS DM-i, which adopts plug-in hybrid technology, has a good performance in power and smoothness, and more importantly, it eliminates the user's mileage anxiety." ”
DM-i Super Hybrid Award-Winning Graph Source Network
"The advantage of BYD's new energy vehicles is that it started relatively early, its technology accumulation is more, the technical route is not only pure electricity, there are also hybrids, and its battery competitive advantage is very strong." Moreover, BYD has a semiconductor business, and its anti-risk ability is also relatively strong. Zhang Xiang, dean of the New Energy Automobile Technology Research Institute of Jiangxi New Energy Technology Vocational College and an automotive analyst, told Cai Entropy.
After many years of dormancy, BYD has accumulated a lot of money, relying on two major killers, so that its new energy passenger car sales reached 593,700 units, sitting on the throne of the domestic new energy vehicle "brother".
But "one brother" also has its own weaknesses.
The troubles of the "one brother" of new energy vehicles
BYD may seem tough, but it is only ahead in some areas, and it is not invincible.
"BYD's most important competitive advantage is the power battery, the motor and electronic control system in the three-electric technology are not very famous, and its intelligence is relatively weak." Zhang Xiang told Cai Entropy.
Although BYD is a leader in the field of power batteries and power systems, but the rapid development of science and technology, BYD's advantages can not always be maintained.
In the field of power batteries, although the current installed share of lithium iron phosphate exceeds that of ternary lithium batteries, BYD's competitors are very strong. In the first quarter of this year, BYD's domestic loading volume market share was 20%, which was similar to that of CATL (300750. SZ) up to 50% market share is still a big gap, and the Ningde era is still making progress.
On January 18 this year, CATL launched the power exchange service brand "EVOGO" and the overall solution of combined power exchange. In simple terms, this is a mode of replenishing power by changing batteries: 1 battery has a range of 200 kilometers, 2 blocks of 400 kilometers, and 3 blocks of 600 kilometers, which can be arbitrarily selected according to the mileage; a single block changes power for about 1 minute, and the owner does not need to get off the car.
On April 18, EVOGO landed in Xiamen, and it is expected that by the end of this year, the number of substations in Xiamen will increase to 30. At that time, anywhere on Xiamen Island, the driver can find a substation within a radius of 3 kilometers.
If the power exchange technology is rolled out, it can effectively solve the mileage anxiety of car owners and the efficiency of supplementing kinetic energy, which will enhance the competitiveness of the Ningde era.
In addition, CATL will release a new battery this year - Kirin Battery. According to Wu Kai, chief scientist of the CATL era, in terms of system weight, energy density, volume energy density, etc., Kirin batteries will become the highest level of power batteries in the industry.
In the field of power systems, the "back wave" has emerged - Geely (00175. HK) Emgrand L Thor Hi · The X went on sale worldwide on April 26 this year. This is a plug-in hybrid vehicle similar to the Qin PLUS DM-i, and the fuel consumption of both is 3.8L/100km. And The Geely Emgrand L Thor Hi · X's comprehensive endurance is as high as 1300Km, priced at 129,800-14.58 million yuan, and its performance is not weaker than that of Qin PLUS DM-i.
It can be seen that BYD will be challenged to varying degrees in both blade batteries and DM-i super hybrids, and it cannot sit back and relax.
As of March this year, BYD has won the first place in China's new energy passenger car sales for 10 consecutive months, and its strength is beyond doubt. But it is relatively weak in the field of intelligence.
In the field of intelligent cockpit, BYD has a DiLink intelligent networked car machine system, which mainly relies on Android ecological download of car applications. However, the problem of "car machine caton" of the model it is equipped with has been criticized - on the automotive quality website car quality network, BYD Han EV has been complained by a large number of car owners about the car machine caton, which is inconsistent with the publicity.
BYD "Han" complaint Source Car Quality Network
In the field of automatic driving, unlike the outside world that BYD's layout is relatively late, as early as 2013, BYD signed a cooperation agreement with Beijing Institute of Technology to jointly develop autonomous driving technology.
Although it is early in the morning, BYD does not seem to pay much attention to automatic driving, although it has a "DiPilot" intelligent driving system, but it is currently difficult to compete with the head of the enterprise. According to the 2021 China Autonomous Driving Patent Ranking released by Zero One Think Tank, BYD ranked 10th.
At present, the three major parts of smart cars - three electric systems, intelligent cockpits and automatic driving, intelligent cockpits and automatic driving are BYD's weaknesses; in the three-electric system, although the battery is industry-leading, it is also threatened by competition.
However, in the face of competition and his own weakness, the technology maniac Wang Chuanfu naturally will not sit still.
Face up to weaknesses and catch up
New energy vehicles are the trend of the times. At the beginning of 2021, the penetration rate of new energy vehicles in China was only about 6%, and it has now reached about 20%. BYD's domestic market share of new energy vehicles increased from 14% in 2020 to 23% in the first quarter of this year.
BYD, which is riding on the east wind of the industry, began to accelerate the layout of new energy vehicles.
Pure electricity and hybrid are the technical routes of BYD's layout. DM-i Super Hybrid belongs to the plug-and-mix technology platform; in September 2021, BYD released a pure electric platform - e platform 3.0, which is also a big killer.
The three-electric system (battery, motor, electronic control) is the top priority of pure electric vehicles, and BYD e platform 3.0 adopts cutting-edge technologies such as a new generation of SIC electronic control, eight-in-one motor assembly, heat pump technology, and motor boost charging architecture. Equipped with an electric vehicle equipped with e-platform 3.0, zero hundred can accelerate as fast as 2.9 seconds, and the power consumption of 100 kilometers is 10% lower than that of the same class.
The minimum low-temperature endurance is increased by 20%, the comprehensive mileage is up to exceed 1000km, and it supports 800V high-voltage flash charging, achieving "charging for 5 minutes and 150 kilometers", which basically solves the mileage anxiety of car owners.
BYD, which is well aware of its weaknesses and industry trends, will increase its layout in the field of autonomous driving from 2021.
In February 2021, BYD participated in the C3 round of financing of artificial intelligence chip company "Horizon"; in February this year, BYD chose Baidu (09888.HK) as its supplier of intelligent driving technology; on March 23, BYD announced a cooperation with NVIDIA (NVDA.NASDAQ) on intelligent driving technology - from the first half of 2023, BYD will be equipped with Nvidia's DRIVE Hyperion platform on some new energy vehicles; in April, BYD and Horizon officially announced a fixed-point cooperation, BYD will be equipped with Horizon high-performance, high-power autonomous driving chip journey on some of its models,5 and related models will be available as early as mid-2023.
In September 2021, Wang Chuanfu was released in the 2021 Lenovo (00992. HK) innovation and technology conference, when talking about intelligent transformation, said: "At present, it has entered an era of intelligent change, new IT is becoming a new engine of intelligent change, at the same time, the big change in the automotive industry, electrification is the first half, intelligence is the second half. BYD is accelerating the digital and intelligent transformation of the manufacturing industry, and will grasp intelligence as a leading project. ”
At present, BYD is focusing on autonomous driving, mainly in cooperation with other companies. Although this method saves a lot of trouble, it will make it lose the "soul" of the smart car. This means that BYD will be subject to the core technology of autonomous driving.
In terms of automatic driving research and development, Wang Chuanfu, who has always insisted on independent research and development, has not retreated from difficulties. On December 24, 2021, BYD and Momenta established Shenzhen Dipai Zhixing Technology Co., Ltd., which will rely on BYD's intelligent technology accumulation and vertical integration capabilities, as well as Momenta's years of accumulation in intelligent driving, and is committed to creating high-level intelligent driving solutions.
BYD actively exerts its own driving, although it is late, but it arrives.
BYD, which entered the automotive market with low-end cars, has never given up the exploration of high-end brands. In terms of brand building, the "Han", "Song" and "Tang" series of dynasties not only drove BYD's sales, but also enhanced the company's brand image. The Dynasty series is mainly "luxurious and stable", which is considered a mid-range model.
In terms of high-end brand building, BYD will rely on "Denza" and a new brand to enter the high-end market in the future. Denza has the attribute of "technology + luxury", there is a luxury gene of Mercedes-Benz, there is also BYD technology, and the price range is mainly 300,000-500,000 yuan. The follow-up more high-end brands will use BYD's more high-end technology, and the price range is mainly 50-1 million yuan. At the 2021 performance exchange meeting, BYD said that the new brand will be released in October 2023.
Of course, IT is not difficult for BYD to challenge the high-end, after all, it is not easy to go from the middle end to the high end. Let's say Great Wall Motors (601633. SH), chairman Wei Jianjun bet on the high-end brand "WEY", whose development was not successful. When BYD releases models of more than 300,000 yuan, consumers may issue "soul torture": buy BYD, or Tesla (TSLA.NASDAQ), Weilai (09866.HK), ideal (02015.HK)?
Although the current penetration rate of new energy vehicles in China is only about 20%, it has long been a red sea. Of course, under the development trend of new energy vehicles, BYD bid farewell to fuel vehicles and can focus more energy on new energy vehicles, which is not a good thing for it.
This is also a new starting point in the history of BYD's enterprise development.