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BYD: A giant ship sailing in the deep sea

BYD: A giant ship sailing in the deep sea

Discontinued sale of fuel vehicles.

BYD made an announcement to stop the production of fuel vehicles. When everyone is still shouting the slogan of 2025, 2030 or 2035, BYD quietly reduces the proportion of fuel vehicles again and again, completing the perfect transition from fuel vehicles to new energy vehicles, and the fire stoppage has not brought much loss to BYD.

BYD: A giant ship sailing in the deep sea

In its April 18 announcement, BYD expects a net profit of 650 million to 950 million yuan in the first quarter of 2022, an increase of 174% to 300% year-on-year. Of course, this is the profit of the entire group, but after the announcement, BYD also said that "the group's new energy vehicle sales hit a record high, the market share continued to rise, driving a significant improvement in profitability, and to a certain extent, hedging the profit pressure brought about by the rise in upstream raw material prices."

More intuitively, BYD's new energy vehicle sales in March 103229, an increase of 334% year-on-year. In the sales list of new energy manufacturers released by the Association, BYD ranked first, accounting for 23.2% of the share. As another important business of BYD, mobile phone components and assembly business are affected by weak industry demand and profitability. Under the premise that the share of new energy vehicles in China is rising, it is not surprising that the two major businesses of BYD Group have such two states.

BYD: A giant ship sailing in the deep sea

As a "new" new energy vehicle company, BYD also has an almost legendary experience, expanding from a mobile phone battery factory to a car factory; becoming the only investment object of Buffett in China; the Bahamas will take the BYD Dynasty series as a state guest car, taking the British Prince William and his wife to experience a Chinese manufacturing; completely transforming new energy vehicle companies and so on.

On the contrary, BYD is also crossing the mountains, spontaneous combustion incidents, DM-i stalls, the former low-end brand image, and even the bad user experience brought by the dealer system, all remind BYD at all times, maybe it can be better.

BYD is like a giant ship sailing in the deep sea, hard and stable, but at any time facing strong winds and rain.

"Electric Drive"

The start-up BYD relies on cost advantages to stand out in the field of mobile phone batteries and stabilize its position. After its listing in Hong Kong in 2002, BYD expanded decisively, adding cars to the field of mobile phone batteries, while carrying out mobile phone components and assembly business. In BYD's 2021 financial report, the revenue of these two businesses accounted for 92.04% of the total, of which automobiles and related products accounted for more than 50%.

As early as 2003, when BYD acquired Xi'an Qinchuan Automobile, Wang Chuanfu, who started with batteries, announced that BYD's ultimate goal was the electric vehicle market. Almost the same as everyone else, the first step is imitation. AS A new student in the automotive industry, BYD aimed at the most popular Toyota Corolla in the market at that time after the failure of the first 316 model, and the BYD F3 was born.

BYD's electrification has always been hidden in the heart, as early as the 2006 Beijing Auto Show, BYD F3e had appeared on the scene, but due to the low level of domestic infrastructure improvement at that time, it had to give up. After that, the "dual-mode" electric vehicle F3DM, which was born in 2008, is more familiar to consumers. The engine can be driven directly or purely electric, with a pure electric endurance of 100 km, but the price of 150,000 does not make the F3DM achieve good results. Instead, the F3 achieved its first annual sales model in 2009 with 285913 units.

BYD: A giant ship sailing in the deep sea

Since then, BYD has shifted towards the B-end in the field of electrification, and the first pure electric vehicle, the e6, was used as a taxi in Shenzhen in 2010, but only 300 were in operation by the end of 2011. In addition, the field of electric buses is favored by BYD, and in the past decade and more, BYD's electric buses have been sold to more than 50 countries and regions and more than 300 cities around the world. The global electric bus market has delivered more than 68,000 units, which is inseparable from its own cost and technical advantages.

BYD: A giant ship sailing in the deep sea

2013 is the tenth year of BYD's car construction, and it is also BYD's first turning point. Because it has never been possible to break through the technical barriers of the West in the field of fuel vehicles, and can touch the ceiling with his hand, Wang Chuanfu decided to shift his core strategy to new energy vehicles. BYD "Qin" was released, and the Dynasty series was born. In 2015, BYD's new energy vehicle revenue accounted for 48%, almost the same as fuel vehicles, from 2016, the situation reversed, BYD new energy vehicle revenue began to be higher than fuel vehicles, until 2022 completely eliminated.

BYD: A giant ship sailing in the deep sea

The era of relying on fuel to feed pure electricity has passed, and the era of "electric drive" has arrived, and BYD cannot sit still this time.

In the fourth quarter of 2021, BYD's market value exceeded 900 billion yuan in one fell swoop, ranking seventh in the total market capitalization of Shanghai and Shenzhen at its peak, in addition to banks, Ta was preceded by only two trillion market capitalization companies in Guizhou Moutai and Ningde Times. You know, until the beginning of 2020, BYD's market value is only more than 100 billion yuan. In less than two years, the market capitalization has increased six or seven times.

Today, most OF BYD models are in short supply, and customers basically wait for months from ordering to delivering and picking up. It is also revealed that BYD still has a backlog of 400,000 orders, compared with BYD's annual sales of new energy vehicles in 2019 of only 229,500 units.

So what happened to BYD in 2020-2021?

Strong keel

At the end of the first quarter of 2020, the blade battery turned out to be the first product of Fordy, which was established by BYD's battery business, which can be described as a blockbuster. Perhaps we can say that this is a big counterattack after BYD's frustration with the ternary lithium battery, compared to Ning Wang's ternary lithium to become the industry boss, BYD has a little reluctance.

The frequent spontaneous combustion accidents of electric vehicles in the early days also made safety the first element. The biggest advantage of iron lithium batteries is safety. BYD in the blade battery conference is more with the theme of "Safe World", the puncture experiment on the stage, ternary lithium, lithium iron phosphate battery, blade battery in the face of steel needle puncture, blade battery does not fire and smoke, the surface temperature is only 30 - 60 °C. Blade batteries also impact the hearts of consumers with the intuitive comparison of acupuncture experiments.

BYD: A giant ship sailing in the deep sea

Wang Chuanfu even said that "blade batteries are expected to completely erase the word spontaneous combustion from the dictionary of new energy vehicles."

In addition, the blade battery effectively improves the space utilization rate in the battery pack by virtue of the CTP structure and the shape of a single battery similar to the long and thin, thereby improving the overall energy density of the battery pack and obtaining a longer cruising range. At the same time, compared with ternary lithium batteries, the cost of lithium iron phosphate batteries is lower.

BYD: A giant ship sailing in the deep sea

The significance of blade batteries for lithium iron phosphate is more to increase the energy density and obtain longer cruising range. However, the essential problems of lithium iron phosphate batteries still exist, such as poor charging and discharging performance in low-temperature environments, inaccurate SoC estimation leads to sudden power failures, etc., and at the same time, spontaneous combustion events in models equipped with blade batteries in the past two years have also occurred from time to time, and acupuncture experiments are equivalent to system-level safety, which is probably inappropriate.

If blade batteries make consumers feel safe, then scarcity has become a bridge for BYD to heat up rapidly.

On January 11, 2021, BYD's DM-i super hybrid technology was released, and three new models equipped with DM-i technology, Qin Plus, Song Plus and Tang, were officially released.

BYD: A giant ship sailing in the deep sea

The popularity of dm-i models may have exceeded BYD's own expectations, and when it was first launched, it was difficult to find a car, and some owners said that the pick-up time was more than 4 months. Interestingly, if you search for BYD's related complaints today, there are still quite a few DM-i problems that can't mention the car.

BYD: A giant ship sailing in the deep sea

If the production capacity is insufficient in a short period of time, it may be the "happiness trouble" of the car company, but it is not necessarily a good thing in the long run. Fortunately, BYD's expansion of production is very rapid, with AND's annual production capacity of 600,000 vehicles in 2020, and the planned production capacity of 3 million vehicles in 2022, and the actual production capacity can also reach 2 million vehicles.

Supply outstrips supply, and DM-i naturally has a unique attraction for consumers.

The core strengths of dm-i models are excellent fuel consumption control and cost control. Once the hybrid market was once dominated by the Japanese two fields, Qin Plus DM-i loss power fuel consumption of 100 kilometers 3.8 L (actually slightly higher) and 10 - 15 million prices, undoubtedly to the two fields of hybrid models to come to the head of a blow, a large number of personal users and online car orders poured in, while 100 + km of pure electric endurance can also meet the vast majority of urban commuter distance. At this price point, economy is the first factor.

BYD: A giant ship sailing in the deep sea

In addition to DM-i, BYD has also proposed DM-p, which stands for Powerful to meet the needs of consumers who are looking for performance. In the past March, Han DM-p was officially released, 3.7 s 100 km acceleration and 5.2 L of power loss 100 km fuel consumption show that the DM hybrid system has found a balance between cost, performance and energy consumption after many generations of evolution.

The complete product matrix of BYD EV and PHEV models has brought MORE sales to BYD. If at this stage you enter the experience store of a new power brand, there are few options for models, taking Wei Xiaoli as an example, the ideal is only SUV models, Xiaopeng does not have medium and large SUV, Weilai has no sedan models before ET7, and other new power brands are even more pitiful.

For BYD, the complete product matrix allows consumers to actively choose rather than passively. Especially in the new energy market of 100,000 to 200,000, there are very few remarkable models. "Sedans, SUVs" and "100,000 to 300,000" are the two most selected models in China and the price ranges with the largest sales in the automobile market, and BYD has achieved full coverage.

BYD: A giant ship sailing in the deep sea

Next, the continuous introduction of the Ocean series and warship series models will make BYD's product matrix more abundant, and scarcity has become one of the important factors for BYD's success.

In addition, BYD's self-research system and vertical integration capabilities also bring cost advantages.

BYD's self-research system on the one hand to reduce the cost, such as batteries, BYD's blade batteries have begun to fully supply, and Tesla signed a 20 GWh blade battery contract, obviously the current BYD battery production capacity has reached a certain order of magnitude, so large-scale production capacity, cost advantages are naturally highlighted, and the ability to negotiate with upstream suppliers is also stronger. On the other hand, the supply side is more reliable and unrestricted. Nowadays, many car companies are also building their own battery moats, GAC's giant bay, the Great Wall's hive, Volkswagen's layout in European battery factories, Tesla is even more.

BYD: A giant ship sailing in the deep sea

Speaking of the supply side, after the new crown epidemic, the global automotive industry chain has been more or less affected, and the most serious is the shortage of chip supply. Yu Chengdong, CEO of Huawei's smart car BU, said in an interview that once a chip of 10 yuan and 20 yuan has been speculated to 2500 yuan. Major car companies have also been exposed to the news of excessively high-priced acquisition of chips.

However, when BYD faces a lack of cores, the impact on production capacity is extremely limited, sales are rising, and even some chips can be supplied. In the prospectus of BYD Semiconductor, brands such as Xiaopeng, Lantu, Yutong, Xiaokang, and Changan have become BYD's customers.

Under BYD's self-developed system, IGBT and SiC power modules are also products with BYD's independent design and production capabilities, which allows the costly SiC to be installed in the electric drive system of Han EV. It has become one of the factors for the Han EV to accelerate to 3.9 s from 100 km/h, while also reducing losses and improving battery life. In the future 800 V high-voltage platform adoption, SiC power modules will be more favored.

BYD: A giant ship sailing in the deep sea

When it comes to vertical integration capabilities, we can trace it back to the early BYD cars. From the mats, interior parts, shelves, airbags, front and rear bumpers, etc., BYD wants important parts in the entire automotive production process. In the era of electrification, BYD is even more so.

Of course, BYD is not perfect.

Not to be overlooked

It seems that the discussion of "intelligence" is inseparable.

New forces car companies are coming, intelligent propaganda is overwhelming, intelligent cockpit, intelligent driving, intelligent... If the wheels can be intelligent, I believe that everyone will not miss this publicity opportunity. Intelligence is the most obvious difference between new cars and traditional fuel vehicles, of course, this is indeed the only way for the further evolution of cars.

What about BYD's intelligence?

In April 2018, BYD launched DiLink 1.0, an intelligent networking system compatible with mobile phone ecology and automobile ecology, opening the era of networking. By 2022, although DiLink has undergone 3 major iterations, it still looks like an in-car Pad and lacks high-quality human-computer interaction design. Examples include voice assistants, more flexible interface layouts, and reduced multi-level menu settings. In addition, DiLink's UI design and vehicle system fluency are relatively weak. In today's smart cockpit so involuted, DiLink can only say that it has just passed.

BYD: A giant ship sailing in the deep sea

However, in smart driving, BYD is obviously a bit behind.

Go first, arrive late. AS early as 2013, BYD cooperated with Beijing Institute of Technology to develop a wire-controlled autonomous driving experimental car, followed by a joint research and development of autonomous driving and intelligent transportation with the Communication Research Institute of the Singapore Science and Technology Research Bureau, and cooperated with Baidu in 2015 to carry out driverless research and development. It can be said that BYD has been paying attention to the direction of intelligent driving.

It wasn't until the launch of the BYDHan EV in 2020 that diPilot intelligent driver assistance systems met consumers. However, the early DiPilot performance was not satisfactory, according to the 42 Mark basic assisted driving ability ranking in Garage 42, the BYDHan EV scored only 12 points.

BYD: A giant ship sailing in the deep sea

At last month's Han family press conference, DiPilot was updated with new functions such as automatic lighting lane changes and avoidance of large trucks. The hardware uses a combination of front-facing monocular camera + 5 mmwave radar + 4 surround view camera + 12 ultrasonic radar. Compared with the previous upgrade of 2 millimeter wave radar, but in 2022, the era of lidar everywhere, as BYD's flagship model, such a hardware configuration is also a bit out of step.

At the software level, more and more high-speed intelligent driving functions are on the car, and the head player has begun to test urban intelligent driving. Fortunately, at the 2021 Lenovo Innovation and Technology Conference, Wang Chuanfu mentioned that "the great change of the automobile industry, electrification is the first half, intelligence is the second half", BYD also accelerated the process of intelligence:

BYD and Momenta form a joint venture, Dipai Zhixing.

BYD strategically invests in lidar company Sagitar Juchuang.

BYD has partnered with Baidu, which provides BYD with an ANP intelligent driving system.

At the NVIDIA GTC conference, BYD announced that the new generation of models will use NVIDIA Orin chips.

BYD cooperates with Huawei MDC.

BYD and Horizon have partnered to launch the first BYD model equipped with the Journey 5 chip to be launched in the first half of 2023.

BYD carries out cooperation models from algorithms, lidar, chips, platforms and other aspects to accelerate its own intelligent process, blossom at multiple points, and catch up.

BYD: A giant ship sailing in the deep sea

Maybe some consumers are not so intelligent and still define the car as a pure means of transportation, so let's talk about BYD's own problems.

The first is the user experience, BYD is basically zero in the layout of the energy network, compared to Tesla, Weilai, Xiaopeng and other car companies with energy system, the user's energy experience in the process of using the car is weaker.

In addition, the direct operation model of the new forces today allows consumers to far exceed the car purchase experience of the former 4S stores in terms of car purchase experience, and various services are comprehensive. The distance between car companies and consumers is getting closer and closer, and the concept of user co-creation follows, which also improves the user's desire to buy.

BYD: A giant ship sailing in the deep sea

If there is no competition, the traditional 4S store model is also understandable. However, in the era of chaotic direct sales system, BYD still adopts the sales method of the fuel system, and even generates some additional costs in the process of car purchase, which will undoubtedly have a negative impact on the brand.

Since the brand image is mentioned, most people mention BYD, still think of the F3 of the fuel era, and the low-end brand image has been formed in most people's minds, especially in the 70s and 80s. Even if BYD becomes strong today, it is difficult to change obsession. In fact, this is also the problem of many domestic car companies, Dongfeng to create Lantu, Geely to create Extreme Kr, Changan to build Avita and so on. If it's hard to change the image, then reshaping an image becomes the solution for everyone.

The same is true of BYD.

Brand up

On April 22, bydir's high-end brand Denza's first high-end MPV was officially named - Denza D9.

BYD: A giant ship sailing in the deep sea

Yes, Denza is back. As a joint venture brand of Daimler, the parent company of BYD and Mercedes-Benz, 12 years ago, the story after that is obvious to all. At the end of 2021, Denza and Daimler jointly announced the equity transfer plan, and in 2022, BYD and Daimler will hold 90% and 10% of Denza's shares, respectively.

Denza has lost a lot of money in the past 12 years, but fortunately it has left a brand, after all, with the blessing of Daimler, the story of Denza is better. This time Denza chose to start over, but also made a lot of changes, especially in brand marketing, the establishment of a new direct sales channels, APP construction, Zhao Changjiang also frequently interacted with fans on Weibo, narrowing the distance with consumers and so on.

In the price range of 10-300,000, BYD has opened the second pulse of Ren Dou, and then use Denza to impact the high-end market of 30-500,000, which is naturally beyond reproach, but BYD's ambitions are far more than this.

During the 2021 Guangzhou Auto Show, Du Guozhong, deputy general manager of BYD's automobile brand and public relations business department, said in an interview with the media that "BYD's high-end brand is currently planning, its brand, marketing team, and sales network are completely independent, and the first model is positioned as a high-end off-road vehicle, with a price range of 500,000-900,000 yuan."

A luxury brand positioned to surpass Denza is in the making. If the new brand can be successful, BYD has achieved full coverage from the range of 10-1 million yuan. But it is easier for a brand to go from high to low, from low to high, in addition to using enough product strength to support, brand recognition is the top priority.

This long-distance giant ship is strong and reliable, but it is also afraid of violent storms, even if it will not sink the ship, it is indispensable to "patch up the seams". After docking on the shore, a new round of ocean opening will begin.

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