The restructuring window has closed, and the hot new energy vehicles are false fires, and most car companies will be eliminated

Recently, at the 2024 Chang'an Partner Conference, President Wang Jun unveiled the fig leaf of the new energy vehicle market, saying that at the peak, 300 companies applied for car manufacturing qualifications, and China publicly released 62 new energy strategies, and now only 17 still have sales, and the vast majority of annual sales are below 4 digits, and there are not many car companies that have entered the new energy track in the past three years, only 5, which shows that the window period for the reconstruction of new energy vehicles has closed.

It seems that the hot new energy vehicle market is getting "cold" year by year. The competition in the automobile market is intensifying, and there are more and more eliminators. Earlier, the major car companies are involution, volume configuration, fight price, foreign brands of oil vehicles continue to decline in price, the configuration of independent models is more and more abundant, and the cost performance continues to increase, which has a serious impact on most of the models with weak system strength, and the number of outers has also increased.

In 2024, the competition in the automobile market will be more intense, the involution of car companies will be more diversified, the price war will escalate, new technologies will emerge in an endless stream, and the number of technology companies entering the game will increase, so Wang Jun, president of Changan Automobile, also predicts that more cars will be eliminated in the future, and in the future among the remaining 126 brands, the TOP10 car companies will account for more than 85% of the share, and the remaining 116 brands will share the remaining 15% of the share.

Mergers and acquisitions are a major trend in the industry

There is no doubt that the new energy vehicle market is hot, and the mainland new energy vehicle industry is in a period of rapid development, with the production and sales of new energy vehicles exceeding 9 million units last year, ranking first in the world for nine consecutive years, and the market penetration rate has also increased to 31.6%. However, the seemingly thriving new energy vehicle market is actually a small number of car companies that can make a profit.

Now the price of new energy vehicle parts continues to rise, last year the average price of mainstream ternary lithium battery cathode materials in the mainland has doubled, while the average price of lithium iron phosphate battery cathode materials has also increased. However, in the market environment of involution, major car companies can only get more chances of survival by vigorously stacking configurations and price reductions, so on the one hand, the price of parts continues to rise, and on the other hand, the market price of vehicles continues to fall, and it is difficult for car companies' new energy products to achieve profitability.

Most new energy vehicle companies are in a state of loss, and NIO has accumulated a loss of 76.4 billion yuan in net profit attributable to the parent company in the past five and a half years from 2018 to the first half of 2023. Xpeng Motors had a cumulative loss of 9.028 billion yuan in the first three quarters of last year, close to the annual loss in 2022. The state-owned enterprise BAIC Blue Valley is also expected to have a net loss of about 5.7 billion yuan in 2023.

There are only a few new energy car companies that can achieve profitability, all of which are brands with large market volume, such as BYD, Tesla, Ideal, Aion, etc., these car companies rely on the volume of models, diluting the R&D and manufacturing costs of each car, so they have more advantages in the price war, and they also rely on the advantages of a strong industrial chain to further control the price of parts and components of new cars.

With its strong strength, the leading new energy brand has also seized a large number of market resources. In the future, more than 85% of the new energy vehicle market will be occupied by a small number of car companies, and most car companies will compete for a small market share. This means that most car companies are struggling to increase sales and profits.

No car companies can continue to operate in a long-term loss state, and new energy vehicle companies that have not achieved profitability for many years are likely to give up the opportunity to compete for market share in 2024. Zhu Huarong said that among the more than 70 Chinese new energy passenger car brands, only four or five are profitable. In the future, mergers and acquisitions, shutdowns and mergers will be the general trend of the industry.

Creating your own perk is the way out

New energy car companies have reached a time of serious surplus, due to the low threshold of manufacturing technology of electric vehicles, coupled with the flood of capital in the new energy tuyere, many emerging car companies are easy to get financing, so there are many new energy brands on the market, and the models are also dazzling, but there are not many models that can really go away.

In the past few years, the new energy vehicle market is still in its infancy, and the smart electric vehicle market is far from the white-hot stage. In this process, it is particularly important for car companies to quickly complete the occupation of consumers' minds, just as when talking about range extender cars, they think of ideal cars, when they talk about battery swapping, they will be linked to Weilai, and when they talk about intelligent driving systems, they will think of Xiaopeng Motors, etc., these head new power brands have already occupied the minds of consumers, so they can still attract the attention of many consumers in the fierce market competition environment.

Other new power brands have not well occupied the minds of consumers, and it is difficult to gain high attention in the market, which has the consequence that it is difficult to move the volume of models, and the company's revenue is difficult to reach the ideal state. For the new car-making forces that have been unable to make ends meet for a long time, before realizing self-hematopoiesis, the main way to survive is financing, and supporting the brand through the power of capital.

However, as the Matthew effect in the new energy vehicle market becomes more and more obvious, resources are moving closer to the top brands, and the capital market has narrowed the financing window of car companies. Then most of the new power car companies have no "life-saving money", and the end is to lose the market.

However, this is not to say that there are no opportunities in the new energy vehicle market, and if other new car manufacturers can build their own longboards, then they have more chances of survival. There is no merchant in this world who wants his products not to sell well. The fact is that not all products can be widely accepted by the market, but these brands will not die out because of this, niche and big brands, or have stronger product characteristics, obviously a more suitable path for these small labels.

The long board is long enough and the characteristics are obvious, which can also help the brand create its own characteristics, so that these "niche" new power brands can have a greater chance of survival in the future.

People's car evaluation/people's car network

Wang Jun, president of Changan Automobile, said that with the intensification of market competition and the acceleration of technological change, some car companies may be eliminated due to backward production capacity and low technical level, which will bring about a reshuffle effect in the industry. In the future, the pattern of domestic car brands will be affected by many factors, including market share, brand positioning and strategy, industry trends and environment. At the same time, the differentiation between private enterprises and state-owned enterprises will be further intensified, and the weak can only end up in failure, and only the strong can get more chances of survival.