laitimes

New energy vehicle battle royale

Author | Wei Qiyang

Source | Insight into the New Research Institute

"Tesla's Elon Musk is a cool classmate."

Lei Jun visited Tesla's headquarters twice in 3 months in 2013, and after returning to China, he also wrote a thousand words on his Weibo "After-View Feeling", which is Lei Jun's praise for Tesla and Musk in "After-View".

Lei Jun's recognition of Tesla is not only in the mouth, but also in action, ordering 4 Model Ss in one go, two for their own use, two for UC Browser chairman Yu Yongfu and Cheetah Mobile chairman Fu Sheng.

In 2021, after a gap of 8 years, Lei Jun can no longer hold back his restless heart, with the enthusiasm when he founded the Xiaomi mobile phone, announced that he would invest 10 billion US dollars in 10 years to build a car.

Yes, what Lei Jun wants to build is a smart electric car like Tesla.

This legendary story is just a microcosm of the current new energy tide in full swing. Before Lei Jun, there is another story about car-making jointly created by the new car-making forces led by "Wei Xiaoli"; Baidu, which hopes to achieve dimensionality reduction advantages through automatic driving technology; Huawei, which does not build cars, but has already injected its "soul" into Xiaokang Celis and Beiqi Extreme Fox; of course, there are upstarts like Extreme Krypton, Ean, and Zhiji, who rely on traditional car companies and fight for their fate.

This is an unprecedented battle royale in the automotive industry, and the reason why it will trigger all kinds of players to go forward and follow, in the view of Wang Xing, the founder of the US group, is because: in the coming era of intelligent electric vehicles, Chinese companies have no reason to lose.

Traditional cars that lose at the starting line, the market has not been exchanged for technology

In fact, in the evaluation of the trend of the automotive industry, Wang Xing still has half a sentence: in the era of traditional fuel vehicles, Chinese companies have no reason to win.

In the era of traditional fuel vehicles, are Chinese cars really so bad?

In 1886, when the German Carl Benz invented the automobile, China had just experienced the Second Opium War and the Taiping Heavenly Kingdom Movement, and everything was in ruins, and the foreign affairs movement initiated by the Qing government was still in the "self-improvement" stage.

In 1913, when the American Henry Ford established the first mobile production line of the automotive industry, China had just overthrown the feudal monarchy, and the society was in the midst of civil strife of the democratic revolution, and there were few cars, let alone the automobile industry.

In the 1970s, a number of Japanese car companies through technical diligent study, production management optimization and innovation, the ultimate squeeze in the supply chain, the overall production level of the industry was raised to a higher level, but also completed the position of the automotive industry competition pattern, China is still in the turmoil of the decade of catastrophe.

In the traditional automobile era, Chinese automobiles have missed every node of the industry's leapfrog development and are not on the same starting line as foreign brands.

Looking back at the history of the development of China's automobile industry, it can be found that whenever Chinese automobiles make progress, they are stagnant for one reason or another.

First of all, in 1931, with the support of the young marshal Zhang Xueliang, Li Yichun, director of the Minsheng Factory, produced China's first car, the Minsheng brand 75-type car, when he wanted to "roll up his sleeves and work hard", the 918 incident broke out, and the car-making project had to stop.

Then in 1936, the Chinese government planned to cooperate with the German Mercedes-Benz Company to establish the "China Automobile Manufacturing Company" to produce cars in the mode of first assembly and later manufacturing, not wanting the outbreak of the War of Resistance Against Japan the following year, and this plan was finally shelved.

After the founding of New China, with the support of Soviet experts, in 1956, China rolled off the production line of the first "Jiefang brand" car in Changchun, but soon after Sino-Soviet relations broke down, the Chinese automobile industry, which lost technical support, fell into a long period of stagnation.

So much so that after the reform and opening up, when a Toyota motor technical representative was invited to visit the Shanghai Automobile Factory, he found that China was still in the stage of hammer-making cars, and was surprised to say that "this is the production method of our grandparents."

It was not until 1984, when Shanghai Volkswagen began to assemble the first Santana, the state even set up a "Shanghai Santana Car Localization Production Community" for the Santana project, at which time Chinese cars ushered in changes and turns in the era of traditional fuel vehicles.

Santana's success has made foreign brands have a great interest in the Chinese market, after China's accession to the WTO in 2001, all the brands that can be named are scrambling to enter China to establish joint ventures, corresponding to the outbreak of China's automobile consumer market, and the double-digit growth for more than ten consecutive years has become China's best feedback to these foreign brands.

But what has Chinese auto gained from working with foreign brands?

On the surface, each car company can form a closed-loop research and development system from the bottom up, can achieve a completely independent supply chain, and countless industrial talents... In it, cold and warm know that what makes it difficult for Chinese cars to let go is that after catching up for such a long time, there is still a chasm as wide as a heavenly barrier with foreign brands.

Let's take a look at the market sales of passenger cars in China in the past 5 years, in the average annual sales of about 20 million, the share of independent brands has remained at about 40% for a long time, which means that the majority of the shares are still joint venture brands and foreign brands.

Source: Multiplying Association Tabulation: Insights New Research Institute

The original intention of Chinese automobiles is to exchange "market" for "technology", but the current reality is that the "market" is given, but the "technology" has not been learned. Still the example of Santana, all in 2022, the Germans are still squeezing toothpaste to upgrade the elimination technology on Santana, embarrassingly, the market is quite recognized, in 2021 Santana sold 137336 in China, ranking 18th in fuel cars.

Whenever Chinese cars play "transmission from Aisin", "engine from BMW" and so on, on the one hand, it represents its own lack of core technology, on the other hand, it means that the premium of the product is still in the hands of foreign brands.

New energy vehicles reopened, where are the opportunities in China?

Chinese cars are finally waiting for the opportunity for energy change.

In the era of traditional fuel vehicles, foreign brands have nearly a hundred years of precipitation in the three core technologies of automobiles (engine, gearbox, chassis), which has an absolute competitive advantage; in the era of new energy vehicles, the three core technologies of automobiles are switched to batteries, motors and electronic controls, and Lei Jun's evaluation of Model S at that time was "four wheels plus two iPads", at this time, the core of the car changed from a mechanical product to a digital product.

The core components of the product have changed, the evaluation dimension of the product force has changed, the interactive experience of the product has also changed, the set of game rules that the traditional car has stuck to has been pushed down one by one like dominoes, and then it has to be reshaped, and Chinese cars and foreign brands have finally stood on the same running line.

The reason why the industry is full of confidence in the "curve overtaking" of Chinese automobiles in the new energy era is because of the success of China's mobile phone counterattack.

The same is the stall of technology switching, first Apple suddenly emerged, opened the curtain of the traditional mobile phone "change of dynasty", while harvesting the world's largest consumer electronics market, but also Chinese mainland to establish an "Apple industry chain" that many countries envy.

Apple's 2021 Supplier Responsibility Progress Report disclosed the list of major suppliers in 2020, and among its top 200 suppliers, there were 96 Chinese mainland manufacturers, accounting for nearly half.

With the combination of "Qualcomm + Android", coupled with mature suppliers such as Lens Technology, Luxshare Precision, and Sunwoda from the "Apple industry chain", China's mobile phones have completed the counterattack on traditional foreign brands such as Nokia and Motorola, although there is also Apple, the mountain has not been turned over, but the overall market share of more than 50%, making China's mobile phones a force that cannot be ignored in the industry.

Similar to mobile phones, Chinese cars and foreign brands have competed for more than 30 years, and the biggest gain is the formation of a relatively complete automobile industry system, that is, we can also build cars without relying on the power of foreign brands, and we must know that Santana's initial localization rate is only 2.7%.

Different from Chinese mobile phones, today's Chinese cars not only have a mature supply chain and industrial base, but also have different advantages from foreign brands.

One is the battery.

In 1999, Zeng Yuqun, who graduated from the Department of Ship Engineering of Shanghai Jiao Tong University, and two old leaders founded ATL (the predecessor of the Ningde era), and because of their emergence in technology, they successfully broke into apple's supply chain and became the battery supplier of iPod.

In 2011, when the tide of new energy vehicles just started, Zeng Yuqun saw the opportunity to spin off ATL's automotive power department separately and established the Ningde Era, due to the endorsement of Apple, the Ningde Era successfully won the order of BMW, and then the development was smooth.

In 2017, China's new energy vehicle sales reached 770,000 vehicles, an increase of 53% year-on-year, the world's first for three consecutive years, which also made the Ningde era surpass Panasonic to become the world's largest power battery manufacturer, in 2018, the Ningde era with a large number of orders set a record for 24 days of lightning listing, and then the Ningde era all the way to become another legend of "Ning Wang".

In addition to the Ningde era, there is also BYD, which also started from consumer batteries, transforming the production line through semi-automated production methods to reduce the production cost of secondary batteries, and in the era when Motorola and Nokia are still in the sky, BYD successfully entered the supply chain of these mobile phone giants and completed the initial original accumulation.

After entering the field of new energy vehicles, unlike the Ningde era, which mainly attacked the direction of ternary lithium technology, BYD bet on the direction of lithium iron phosphate and began to build cars.

Whether the shoes fit or not, you know best.

Where the lithium iron phosphate battery is good, where is not good, BYD has a large number of verifications on its own car, the heart is mirrored, and the feedback from users promotes BYD's continuous iteration in battery technology.

In 2020, BYD made a major breakthrough in the direction of lithium iron phosphate, with a 96 cm long, 9 cm wide and 1.35 cm high monomer battery wrapped in an aluminum shell, arranged in a column, and then inserted into the battery pack like a "blade".

The flat design of this cell increases the internal space utilization rate to 60%, the capacity density of the battery is increased by 50%, and it has higher safety than ternary lithium batteries. BYD spared no expense and held a "super conference" for "blade battery" on Shenzhen Satellite TV.

Before the advent of the "blade battery", BYD's power battery is self-produced and sold, basically internal digestion, but with the huge installed capacity of BYD Automobile, its power battery shipments can also rank fourth in 2019, with a market share of 9.52%; after the advent of "blade battery", BYD began to explore the path of battery supply, forming a duopoly pattern with the Ningde era in the domestic market, and the two joined hands to win more than 70% of the market share.

The reason why batteries are important for new energy vehicles is that at the user level, it is the core focus of the experience; at the product level, the cost of power batteries can account for more than 35% of the cost of the vehicle BOM, which is much higher than the cost of SoC on mobile phones.

Cataline Times and BYD have an absolute right to speak in the field of power batteries, which also means that Chinese automobiles have obtained the highest technical density and the highest cost of new energy vehicles, and by virtue of this alone, Chinese automobiles can take the initiative and lead in the competition with foreign brands.

The second is that the Chinese government has foresight and foresight, and strongly promotes the construction of charging piles, especially in 2020, "new infrastructure" is included in the national strategic level, charging piles as one of the main contents of "new infrastructure", has received unprecedented attention, and has also bred charging pile construction and operation enterprises represented by special calls and star charging.

Source: China Charging Alliance, Zhiyan Consulting Drafting: Insight New Research Agency

Over the past few years, China has the world's largest charging/replacing network, which has built a solid underlying foundation for the popularization of new energy vehicles, and it can be said that China's new energy vehicle consumption market is ready to erupt at any time.

In fact, in 2021, China's new energy passenger car sales reached 3.31 million, accounting for 53% of the global market share, surpassing Europe and becoming the world's largest new energy vehicle market.

Look for the winning code for this "battle royale"

The largest market cannot be equated with the strongest industry, and the largest market does not mean that Chinese cars have an absolute advantage.

In order to complete the counterattack, Chinese automobiles must also take the lead in determining their unique differentiated advantages in this industrial change, in addition to the core technologies of batteries, motors, and electronic controls, users can perceive the unique experience.

In a 2015 study by the Institute of Electrical and Electronics Engineers (IEEE) and IHS Automotive Consulting, a car had only 50,000 lines of code in the electronic system of a car in the early 1980s, and now the electronic system of high-end luxury cars has 65 million lines of program code, which is 1300 times that of the former.

Based on this, Wang Jin, former senior vice president of Baidu and general manager of the autonomous driving division, specially wrote an article proposing the concept of "software-defined cars", which is also an iron law to win in the industrial competition of new energy vehicles.

We can look at how Tesla does it.

When Musk reviewed the Model S in 2015, he said that the design idea at that time was to build a "computer with wheels."

Computers are no stranger to us, the most important hardware is the chip, the most important software is the system.

Using this as an analogy, Musk built Tesla with a two-pronged chip system.

Before developing the most core intelligent driving chip of new energy vehicles, Tesla had cooperated with two giants, Mobileye and Nvidia, but the "experience" of these two cooperations was not very good.

When using the Mobileye chip program, Tesla experienced a series of car accidents, Mobileye believes that Tesla's function exceeds the safety bottom line, Tesla believes that Mobileye's solution does not meet the demand; when using the Nvidia chip solution, the 500W power consumption of the NVIDIA Drive PX Pegasus platform has become the short board of Tesla's vehicle performance, equivalent to running for two hours, the chip will use 1 kWh of electricity, for this reason, Musk has personally complained:" Weak chickens with the same performance that consume more power and consume similarly."

In 2016, Musk dug up the former AMD architecture god, known as the "silicon immortal" Jim Keller, Tesla's self-developed chip project gradually surfaced, Tesla will be used for computing vision of the module proportion of greatly increased, which makes Tesla's main camera visual perception capabilities greatly enhanced, in addition, Tesla also built a supercomputer Dojo for supporting algorithm iteration in the cloud, its computing power ranks fifth in the world, and China's Shenwei Taihu Light is on an equal footing.

Mastering the "core technology" of the chip, Tesla is no longer "subject to people", in the function of innovation is also more arbitrary, Tesla's autopilot department a key member once said that Tesla's self-developed chip is a big reason is "hope to strip the chip and algorithm, on the chip algorithm research and development, combined with the scene." ”

At the software system level, unlike friends who put BlackBerry's QNX and Google's Android directly on the car, Tesla chose to develop its own intelligent driving system on the basis of Linux, from June 22, 2012, Tesla officially delivered the Model S, Tesla has been tirelessly exploring the system update, and has experienced three stages, seven major versions and countless innovations.

For example, the first people to drive a Tesla will be amazed by the cool function of the door handle automatically popping up, as long as you move your mouth in the car, the car can understand what you mean, put the songs you want to listen to, and take you where you want to go. While there were many bugs in early vehicles, with each generation of systems updated, some features were fixed and the car evolved forward.

For example, Tesla through the ability of system software to make the car more intelligent, in the October 2015 launch of the V7.0 version, Tesla for the first time added automatic lane keeping, automatic lane change and automatic parking three major auxiliary driving functions, which caused a sensation at the time, Tesla received countless praise at the same time, competitiveness also went up to a higher level.

Facts have proved that the combination of software and hardware of the chip + system has become the main premium in Tesla vehicle sales, creating a new thinking model for new energy vehicles in both technical and commercial dimensions.

Because the parts of electric vehicles are one-third less than that of fuel vehicles, the vehicle structure is greatly simplified, in the long run, electric vehicles will gradually be standardized at the hardware level in the future, so in order to reflect the differences in products, we must start from software.

Deloitte's analysis report also predicts that by 2030, the cost of software will increase from the current 10% of the vehicle BOM (Bill of Materials) to 50%, where the software includes AI algorithms, operating systems, and electronic hardware such as controllers and chips with a high degree of software and hardware integration in addition to application development.

Chinese cars have obviously studied Tesla's success in depth, and the various players who have entered the game have their own talents.

The new car-making forces represented by Wei Xiaoli have touched Tesla across the river since its birth, from the three electricity to the chip, from the system to the algorithm, in the core technology, it is resolutely not to be necked by foreign brands, and the product creation has also formed a highly recognizable brand mark.

As mentioned earlier, new energy vehicles can be compared to digital products, at this time, the successful experience of Xiaomi and Huawei in the field of mobile phones has added a lot of points to their entry into the car, and the experience here is not only in the technical level of product experience, but also includes supply chain management capabilities, channel construction capabilities and marketing innovation thinking capabilities.

Finally, it is represented by extreme krypton, wisdom, those traditional car companies conform to the trend of transformation and emerging brands, qualification and production capacity are their trump cards, in the intelligent difference route, some of them are self-reliant, form a global team to tackle the technical problems, like the extreme Krypton SEA Haohan intelligent evolution experience architecture (Sustainable Experience Architecture) in the hardware, system and ecology three levels, to build a three-dimensional layout of the trinity, Redefining the R&D cycle of software vehicles can reduce the time to software development by more than 50%.

Some have pulled up technology companies as partners to make up for the shortcomings in research and development, such as behind Zhiji is SAIC and Ali, one is one of the automotive groups with the strongest comprehensive strength in China, and the other is a technology giant with top technical strength.

In January last year, zhiji automobile released two products, in the software level made a huge innovation, on the one hand, the use of a new generation of domain fusion central computing digital architecture, eliminating the barrier between hardware; on the other hand, through a series of super hardware blessing, can create a "full-scenario, most continuous" zero takeover intelligent driving experience.

At the beginning of the new energy vehicle revolution, Tesla rode first, running in the front, but it is not impeccable, the strong rise of Chinese cars, with different differentiated routes, strive to narrow the gap, recall the mobile phone reform after the advent of the first generation of iPhones, Chinese cars seem to be walking on the same road as the Collective Breakthrough of Chinese mobile phones.

epilogue

In fact, before Wei Xiaoli ran out, the new car-making forces had already carried out a reshuffle, and now it is only a new stage of competition in the new energy vehicle industry, and it is far from over.

Taking the mobile phone industry as a mirror, the transformation of smart phones has created Apple, and the Rongmi OV has been precipitated by Chinese mobile phones, before which there was the defeat of China Cool Union, and there was also the sigh of Huawei's stranglehold.

New energy vehicles will obviously also experience a long and tragic battle royale, the above is the final survival law, but in addition to this must add an iron law of "scale".

An internal speech by Li Shufu, chairman of Geely Holdings in 2021, was widely circulated in the automotive industry, And Li Shufu mentioned: "In today's world, the electric vehicle industry is competing for deer, and under the impetus of capital carnival, everyone's little life is good." However, I think the basic law of the automotive industry will not change, that is, scale, and eventually the number of global auto industry companies surviving will not be too much, only large-scale enterprises can survive. ”

Say a thousand, ten thousand, differentiation is the foundation, scale is the key to being able to hammer the word, but how to do scale, Chinese cars still have to continue to learn.

Resources

1, Lei Jun, Tesla's Elon Musk is a cool classmate

2. Xiang Tea History Museum, who invented the earliest car in history? When was China's first car built?

3, rice to wear the boss, chase the kite car: new energy stage, localization singing

4. Yuanchuan Technology Review, the "MediaTek Moment" of new energy vehicles

5. The history of Chinese automobiles

6. Geek Park, Tesla's software iteration history: three stages, six major versions, and countless innovations

7, Deloitte, arrow on the string, software-defined car

8. Wang Jin, Autonomous Driving - Software-Defined Cars (SDV)

9. Li Shufu, my six views on the future world and the development of automobiles

Read on