A year of new energy reshuffle
According to the China Association of Automobile Manufacturers, China's auto industry will reach a new high in production and sales in 2023, reaching 30 million units. "Automobile Business Review" once wrote that it did not expect Chinese cars to enter the 30 million era in such a tragic way in 2023.
The annual report card of the new energy vehicle market in 2023 has also been revealed, reaching about 9 million units, a year-on-year increase of about 30%. It looks like the growth is good, but in fact the market space is more crowded. BYD alone has achieved sales of 3.02 million units, coupled with Tesla's 1.84 million deliveries, leaving little market space for 50 car companies.
In 2023, traditional car companies will roll each other, new EV manufacturers will make efforts, some car companies will exceed their sales targets, the ranking of sales/delivery volume will change dramatically, and some car companies will begin to fall behind. Not to mention that BBA is under great pressure, even Porsche has begun to sell at a reduced price, and no one can stay out of this complicated involution knockout game.
Ideal "ambitious"
From the perspective of the whole year, Li Auto delivered a total of 376,030 new vehicles, compared with 133,246 vehicles delivered in 2022, a year-on-year increase of 182.2%, which is a very good result among all new energy vehicle companies. In 2024, the ideal target sales volume will exceed 800,000 units, and for a while, there are constant doubts on the Internet.
According to the terminal sales data, in the first 11 months of 2023, BMW Brilliance sold 635,400 units, FAW-Audi sold 549,600 units, and Beijing Benz sold 545,800 units, and if Li Auto sets its sales volume at 800,000 units in 2024, it does have hope to challenge BBA's sales in China.
If you think that the ideal only relies on the "refrigerator color TV sofa" to win the market, then you underestimate not only the car, but also the rich people who buy luxury cars with an average price of more than 350,000 yuan. can be called a daddy car, at present, not only ideal, but also Zeekrypton 009, Denza D9, Trumpchi E8, Volvo EM90, VOYAH Dreamer, etc., but their sales gap is really not small. This is a fully competitive market, and the market choice is not necessarily right, but there must be a reason.
There is also an argument that ideals can only be stained with the light of range extension if they sell well. It has always been an extended range route, and the M7 sold 432 units a month at the worst time, and it was not until the later facelift, increase and reduce the price that the market was opened. After the release of the Nezha S extended range version, it did not help the brand stabilize sales. If the answer was really that simple, the second and third ideals would have come out long ago.
When it comes to ideals, we can't fail to mention Huawei, and many media claim that Li Xiang "suffers from Huawei phobia", which is not an exaggeration, and Li Xiang shows some behaviors from time to time, which may be even worse.
For example, "Huawei's super ability has caused the sales of Ideal ONE to collapse, and the production was stopped ahead of schedule and lost more than one billion yuan in one quarter," Li Xiang once told the media; in 2021, he began to implement the IPD system of learning Xi from Huawei; in order to implement the study of Huawei, Li Xiang also asked executives from various departments to read more than ten books about Huawei. Before the launch of the new M7, Ideal gave training to the sales side, including "Wenjie is not Huawei's car, but Thalys's car". After last year's strategy meeting, Ideal no longer let sales mention this topic, and the new competitive strategy is to "avoid Huawei's edge".
Huawei is in full swing
The ideal "phobia" is enough to prove that Huawei is strong, but this is not all there is to Huawei. In December 2023, 24,468 new vehicles were delivered in the AITO Wenjie series, an increase of 29.96% month-on-month, and a total of 94,380 units were delivered in 2023. Among them, 20,611 new M7 vehicles were delivered in December, bringing the total number of deliveries to 48,552 units.
It is reported that it is not the market that is now limiting the delivery of Wenjie, but the production capacity. It is reported that the cumulative number of units of the new M7 has exceeded 120,000 units, and that of the M9 has exceeded 30,000 units in the seven days since its launch. According to 36Kr PowerOn, Huawei will also build independent stores for smart cars, which is expected to reach about 800 in 2024 and 1,000 in 2025, which means that Huawei will use one year to complete the current total number of stores of Li Auto. For Huawei, Ideal is not the only competitor, and it does not set limits for itself, this opponent can be Tesla or even BYD.
Huawei's real strength is intelligent driving, and it is undoubtedly the first echelon in China, many industry insiders told us. Momo Zhixing, known as the "mass production king" of China's intelligent driving, commented that "Huawei is like the original Tesla, a catfish in the autonomous driving track in 2023".
With the launch of Huawei ADS2.0, it is no longer entangled in opening several cities, using a few lidars, and directly mass-producing the intelligent driving ability of "all cities can be driven", which instantly breaks the original competitive rhythm and pulls up an open platform for technology sharing, which begins to generate "potential energy" advantages for OEMs.
Timeline of the implementation of urban NOA Source: Zoth Research
Data shows that in 2023, high-end intelligent driving (represented by NOA in the Chinese market) will continue to maintain an upward momentum. In August, 54,500 new vehicles were delivered in the Chinese market (excluding imports and exports) with NOA as standard, a year-on-year increase of 346.72% and a month-on-month increase of 5.62%. Therefore, intelligent driving has increasingly become an important factor for consumers to consider when purchasing, and the sooner the car companies make efforts, the more likely they are to enjoy market dividends. At present, a number of brand models such as Xpeng, Ideal, AVATAR, and Zhiji have been vying to develop urban NOA, and car companies that have been slightly slower to respond have also begun to popularize high-speed NOA on a large scale.
Huawei's customers are not only Thalis, but also Changan, FAW, Chery, BAIC and so on. Huawei splits the car BU and hopes to form an alliance of in-depth cooperation, but Huawei is not willing to be a supporting role like Bosch, from design and production to sales and after-sales are responsible for him, and the cooperative car companies are a bit like a supporting role.
However, car companies are more worried about whether Huawei can maintain the principle of neutrality after acting as such an important supplier. Huawei, which is making more and more cars, has put a lot of pressure on the main brands of OEMs. When Huawei's sales are close to one million, it is difficult to say whether the car companies behind it are still willing to play a supporting role.
BYD: The Iron Throne is hard to do
As the sales leader of new energy vehicles in China, BYD will almost be in the dust in 2023, and its sales will be more than a little bit away from other car companies. Its dynasties, oceans, denza, formula leopard, and Yangwang collectively made efforts, with sales of 341,043 units in December, a year-on-year increase of 45%, and annual sales of 3,024,417 units, a year-on-year increase of 61.9%, exceeding the target of 3 million units set at the beginning of the year, and winning the double championship of the new energy vehicle market in the Chinese market and the global market.
As one of BYD's star models, the Qin has achieved annual cumulative sales of 482145 units with its excellent cost performance and stable performance, becoming BYD's sales leader, while the cumulative sales of Han have reached 228383 units, Tang has reached 137184 units, and Song PRO and Song L have also achieved more than 220,000 units.
On the other hand, the performance of the Denza N7 and N8 in the market is a bit weak, with cumulative annual sales of only 8,656 units. The main reason for the sluggish sales is that these two models not only have to face the competition of powerful players such as Tesla Model Y, Zeekrypton 001 and Ideal L7 in the market, but also face the encirclement and suppression of 250,000-level models such as Wenjie M7 and Xpeng G9. BYD may need to re-examine the positioning and market strategy of the Denza N7/N8, and only through continuous product innovation and market adjustment can it make a breakthrough in this market segment.
Under the premise of adhering to a prudent financial strategy, BYD also had to slow down. BYD's financial report shows that the total fixed assets of "projects under construction" have dropped from 56.1 billion yuan in Q1 2023 to 41 billion yuan in Q3. This means that BYD's next momentum of domestic production capacity explosion may gradually decline. In 2023, BYD's sweet growth moment of "production and sales" will also follow, and it will also begin to enter the stage of adjustment and upgrading of production capacity.
What worries BYD even more is that the second half of the year has started to play intelligently, although BYD is accelerating the make-up class, it is difficult to say that it is ahead. 2023 is regarded as the "first year of urban NOA landing", and from Huawei and Wei Xiaoli to Chang'an and the Great Wall, various car companies have increased the layout speed of urban NOA tracks. According to data from Kaiyuan Securities, in the first half of 2023, 209,400 new cars were delivered by domestic passenger car front-loading NOA, a year-on-year increase of 108.98%. But BYD was absent from the feast. Zhao Changjiang, general manager of the sales department of BYD's Denza brand, said that the high-speed NOA will not be pushed on the Denza N7 until the end of December last year, and the urban NOA will not be pushed on the Denza N7 until Q1 2024.
Ping An Securities said in a research report that in the context of a sharp decline in battery costs and the acceleration of high-end cars into gasoline and electricity parity, high-end cars are more focused on polishing intelligent longboards and comfort. Both of these are currently not BYD's longboards, and continuing to roll up costs will cause more problems in BYD's supply chain. BYD, which needs to cut prices at the end of the year to play a role in sales, has been regarded by many investors as weak growth and uncertain prospects.
In the end, the essence of the price war is the maximization of involution
In the past, until December, the task of reducing the price of new cars of automobile manufacturers was basically completed and will not be reduced again, but it will continue to decline in December this year. The current price war can be summed up in 12 words: 'large-scale, large-scale, high-frequency, and irregular', and we have no way to judge the trend at all. Wang Meng, an expert of the China Automobile Dealers Association and deputy secretary-general of the Beijing Automobile Dealers Industry Association, was quite emotional when he talked about the current situation of the car market to the reporter of the Economic Observer.
Has the price dropped? but not as much as expected. According to data from the National Bureau of Statistics compiled by the China Association of Automobile Manufacturers, from January to October this year, the profit margin of the automobile manufacturing industry was 4.9%, a decrease of 0.8 percentage points compared with 5.7% in the whole of 2022.
According to a report jointly released by the Passenger Car Association and a third-party market consulting agency, Anluqin, from January to October 2023, the average price reduction in the passenger car market has fluctuated from 17,000 yuan to 24,700 yuan, and the average price reduction in the new energy passenger vehicle market has increased from 5,600 yuan to 11,900 yuan.
It is worth noting that although the price war has been protracted, up to now, there has been no effective market clearance in China's auto market, and the market concentration of leading manufacturers has basically remained stable. According to the data of the Passenger Association, since the beginning of this year, the monthly market share (CR10) of the top 10 manufacturers in terms of sales volume has remained at about 60%, while that of CR5 and CR3 has remained at about 40% and 28% respectively.
In fact, the price war did not start last year, at least it has started before the epidemic, and only Weimar, Tianji, and Aiways will be "eliminated" by the new forces in 2023. This year, we have frequently seen a certain new force accept the capital injection of the Middle East tyrants, refinance the market xxx billion yuan, and join hands with the old car companies in Europe and the United States, but the general environment is not good, and the local tyrants may not have so much money to arrive. A few years after the beginning of 2024, "Gaohe will have news that there is no money to stop work", although Gaohe has officially refuted the rumors, but there have been a lot of lawsuits against Gaohe suppliers for arrears.
The market is very complex, although it is said that every round of price war market will accelerate the clearance, but this acceleration may be more than a year or five years. Take the mobile phone market as an example, as early as 2017, the entire mobile phone has reached the top saturation, and what remains is to fall year after year, but the market concentration of both domestic and international markets has not changed very much. It is a bit naïve to think that two rounds of price wars can clear the opponent, and it is unrealistic to expect the opponent to make a mistake and go out of the game by himself.
In the final knockout round, there are only two ways for all car companies to face them, either a leading generation in technology or a leading generation in cost.
Later, even the first-line luxury brands of fuel vehicles began to reduce the prices of some of their key models, and no longer pursued the premium of luxury brands. For example, Mercedes-Benz's EQE electric car, with an official price of 500,000 yuan, has dropped to 350,000 yuan in the second half of this year, BMW's X5 electric car, with an official price of 750,000 yuan, has a market transaction price of 470,000 yuan, and the price of a Land Rover Defender has dropped from the official nominal price of 1.049 million yuan to 819,000 yuan.
In the past, Ideal Management would often use the price of the product to emphasize the image of its luxury brand. In January this year, Li Xiang, CEO of Ideal, also posted on Weibo, "Ideal L9 will stick to the price range of 400,000-500,000 yuan, and Ideal L8 and L7 will stick to the price range of 300,000-400,000 yuan." However, in the fourth quarter, the starting price of the ideal L7 terminal has been less than 300,000 yuan. According to the report of "Late Auto", the current ideal terminal discount margin can reach up to more than 30,000 yuan.
Price reductions may not be all bad, and jokes like "If you don't work hard, you can only start BBA" became popular at the end of the year. On the one hand, it is dissatisfied with the frequent "impact of high prices" of domestic independent brands, and on the other hand, BBA is "really fragrant" after the price cut.
In the first 11 months of this year, BMW sold nearly 90,000 BEVs in China, up 211% year-on-year. Among them, the highest-selling NEV model is the BMW i3, which sold a total of 47,600 units in the first 11 months. The sales of this car alone are almost equal to the combined sales of Mercedes-Benz and Audi new energy vehicles throughout the year.
Originally, for nearly a year after the launch of the all-new i3 in March last year, the monthly sales of this "special car for China" hovered in the three-digit or even double-digit range - after all, the price of 349,900 yuan and the NEDC range of 526 kilometers are not competitive in the face of mainstream electric products in China. In the first half of this year, after the BMW i3 started a price cut that was almost crazy (the price after the discount was more than 200,000 yuan), the sales volume immediately rose.
Mercedes-Benz and Audi's trams also often give a profit margin of 100,000 yuan, so why don't they sell well with the i3 at a 60% discount? Another reason is that BMW's electric car appearance still retains obvious brand family characteristics, and does not make a clear distinction between electric vehicles and fuel vehicles like Mercedes-Benz and Audi. For example, the Mercedes-Benz EQ series has changed to a more obvious pure electric vehicle feature, and the front of the car uses a closed design, and does not retain the traditional grille, which can be seen at a glance its new energy vehicle identity.
In short, you think that the i3 is selling well because BMW's new energy transformation has successfully taken a big step, but in fact, everyone still loves the former BMW. Every BMW i3 sold is the owner's tribute to the "blue sky and white clouds" of the internal combustion engine era.
There is no cost or technology leadership in price reduction, just to quench thirst, BBA itself is profitable and may be able to resist for a while, compared with domestic independent brands are much more miserable.
In January this year, Tesla took the lead in starting a price war for volume, and the two brands of Wenjie and Xpeng quickly followed up with price cuts. Among them, the prices of the M5 and M7 will be reduced by 28,800-30,000 yuan, the price of the Xpeng G3i will be reduced by 20,000-25,000 yuan, the price of the Xpeng P5 will be reduced by 23,000 yuan, and the price of the Xpeng P7 will be reduced by 30,000-36,000 yuan.
Although NIO, which claims to never reduce prices, did not directly reduce prices, it lowered the starting price of all models by 30,000 yuan by unbinding the rights and interests of battery swaps. NIO encourages users to swap batteries and gives away 4 or 6 battery swaps every month.
The price reduction of 350,000 yuan at every turn did not bring much sales to Xiaopeng and Weilai. In the first half of the year, Xpeng's sales continued to be sluggish, and it was not until the release of the G6 and G9 in the second half of the year that Xpeng won a respite. In 2023, Xpeng Motors delivered a total of 141,600 new vehicles, a year-on-year increase of 17%, but the annual target completion rate was only 60.75%.
According to relevant data, in December 2023, NIO delivered 18,000 new vehicles, a year-on-year increase of 13.9%, and in 2023, NIO delivered a total of 160,000 new vehicles, a year-on-year increase of 30.7%. NIO did not meet the annual sales target of 245,000 units set by CEO Li Bin, and only achieved 65.3% of the annual target.
More importantly, only two of the three "Wei Xiaoli" companies "recorded an annual loss of 10 billion yuan, although the loss is shrinking", but the excessive burden will obviously affect the layout space in the next few years.
Xpeng has repeatedly reiterated that it does not make batteries, and chooses to grow in the MPV industry, which has a low penetration rate, to release the x9 at the beginning of this year. Although NIO is shouting "reducing costs and increasing efficiency", it is also spending 40 billion yuan on research and development, self-developed semi-solid-state batteries with a range of up to 1000km, self-developed intelligent driving chips, self-developed global 900V high-voltage architecture, Tianxing intelligent chassis system, etc. You can say that Weilai is a waste of money, but it can't be said that it is completely foolish, semi-solid-state batteries, according to the observation of many people in the battery industry, it is not too much to shout a sentence of "far ahead", and Wei's self-developed intelligent driving chip can also be called the top three in the industry.
However, the problem is that being able to run through does not mean that it can be verified in mass production, and the difficulty of the mass production stage is not lower than that in the R&D stage. Li Bin is still the Li Bin we are familiar with, who dares to think and bet and does not accept the definition of others.
Many people have a misconception that only new energy vehicles have serious overcapacity, and the fuel vehicle market is very good, which is due to policy guidance. In fact, the overcapacity of fuel vehicles is even more serious.
"Changan Ford cuts production capacity by one million", "GAC Mitsubishi Changsha plant stops production for several months", "Volkswagen and GM's traditional car production capacity in China may be idle by 2030...... According to various sources, the tide of overcapacity of fuel vehicles in this round is unstoppable, and even the head cannot avoid it.
According to the data of the Passenger Association, by the end of 2022, the total production capacity of the top 20 car companies was 37.49 million vehicles, accounting for nearly ninety percent of the total, but the overall utilization rate was less than fifty percent. Among them, Geely, Great Wall, SAIC Volkswagen, Changan Ford, Beijing Hyundai, Yueda Kia and other car companies with a large proportion of fuel vehicles, the capacity utilization rate is less than 40%.
If it is said that car companies blindly expand production due to wrong economic forecasts, there is still room for salvation, but sadly the performance cannot keep up with the needs of the times. For example, Changan's 1.4T turbocharged engine has a maximum horsepower of 160 horsepower, a maximum torque of 260N/m, and a maximum torque speed of 1400~4000 rpm. It is a small displacement but high horsepower, high torque, fast power response and wide range of engines. Compared with the Volkswagen 1.4T, the Hyundai 1.4T, and even the Honda low-power 1.5T, they all have a good performance.
Chery's latest 1.6T and 2.0T engines are at the international leading level and are not inferior to joint venture models. For example, Chery's 2.0T engine has a maximum horsepower of 254 horsepower, a maximum torque of 390N/m, and a thermal efficiency of 38%, which is ahead of the domestic 2.0T engine and comparable to the BBA 2.0T displacement engine.
But so what? Engine technology is close to the limit, the input-output ratio is very low, and it is difficult to compete with plug-in hybrids in terms of power performance and fuel economy, and there are even more and more pseudo-innovations in transmission gears.
In the era of fuel vehicles, no domestic car companies dare to argue with Porsche, but in the era of "horsepower equality", "intelligent surplus" and "software-defined vehicles", Porsche often appears in the "background board" of domestic brand press conferences and becomes the object of "hanging".
Even with the bonus of faith, in the face of the product power of the 898,000 Taycan entry-level model with a range of more than 400 kilometers, 000 acceleration in 5.4 seconds, and a black screen from time to time on the triple screen, Porsche fans still have to do some psychological construction. After all, the 300,000 Model 3 Performance next door and even the Nezha GT in its early 200,000s can overwhelm it in parameters, which is unheard of in the era of fuel vehicles.
Even if the Model 3 and Nezha GT are still a bit expensive for ordinary people, then the BYD Qin, which accelerates from 000 to about 7 seconds, is it not fragrant as long as 80,000 or 90,000? Five or six years ago, a luxury performance car of about 300,000 yuan had the performance of 000 acceleration in 7 seconds. And such a magical scene will only appear in new energy vehicles.
Not only China and the United States are accelerating the use of new energy, but also the old European car companies have also had a timetable for the withdrawal of fuel vehicles, and even some large manufacturers have stopped developing fuel engines. According to a 2021 forecast by Gianluca Campone, senior partner at McKinsey & Company, 60% of supercars sold worldwide will be electrified by 2025, with 30% fully electric and the other 30% plug-hybrid. When supercars, which are the anchor of fuel vehicle performance, are fully embracing electrification, what reason should car companies not change?
Excess is not terrible, the market economy will inevitably have a surplus after various cycles, and the terrible thing is that I don't know why there is a surplus. The surplus of fuel vehicles is related to the fact that major car companies underestimate the development process of new energy, and they have been unable to find a suitable transformation path. In contrast, Chery has been deeply involved in the overseas market for many years, and the current overseas sales have contributed nearly eighty percent, and fuel vehicles account for a considerable part of it.
(To be continued)
The next preview: "Involution is not equal to chaotic volume", Ningwang market shrinks the battery industry, and the intelligent lidar rolls out in the second half