Oil vehicles are accelerating their exit, the pressure on joint ventures is huge, BYD may be blocked, and the top ten predictions of the 2024 auto market

According to the China Association of Automobile Manufacturers, in 2023, the production and sales of automobiles in mainland China will exceed 30 million units for the first time, with 30.161 million units and 30.094 million units, respectively, an increase of 11.6% and 12% year-on-year.

Among them, the production and sales of new energy vehicles were 9.587 million and 9.495 million respectively, an increase of 35.8% and 37.9% year-on-year, respectively, and the market share reached 31.6%, an increase of 5.9% over last year.

Two years ago, could you have imagined such an outcome?

I believe that most people's answer is no.

But this is only the beginning, because the penetration rate of new energy passenger vehicles in China is less than 40%, if you count the stock, then the gap between new energy vehicles and fuel vehicles will be even greater.

Therefore, new energy vehicle manufacturers must continue to work hard.

So what will the automotive industry look like in 2024? Here are our 10 predictions.

1. BYD continues to make great progress, and there is no small resistance to market share improvement

To understand BYD's strength, you only need to remember 2 sets of data.

First, its cumulative sales in 2023 have exceeded the 3 million mark, a year-on-year increase of 62.3%.

Second, its share of the domestic new energy market exceeded 35%.

Judging from the current situation, BYD holds core equipment such as blade battery, e-platform 3.0, super hybrid DM-i\DM-p, Yi Sifang platform, Yunyuan intelligent body control system, as well as two series of models such as Dynasty and Ocean, as well as sub-brands such as Denza, Equation Leopard, and Yangwang, unless irreversible major changes occur, there is no doubt that it will continue to sit first in the world in 2024.

What's more, some of BYD's current models and platforms on sale have been aged, and it is very likely that they will be updated in 2024 to make sales go to the next level.

However, it should be noted that the strength of competitors is also improving, and even catching up in some technical experiences, and they have the ability to prevent BYD's market share from continuing to expand.

In 2024, the sales of new energy vehicles will most likely exceed 10 million, but BYD's market share may be suppressed below 40%.

2. Tesla's low-end models and 4680 batteries may be on the car

According to statistics, Tesla's domestic sales in 2023 will be about 1.81 million units, just completing the sales target of 1.8 million units, and globally, the sales gap between Tesla and BYD is more than 1 million units.

If it wants to boost sales quickly, Tesla now has 3 things to do: launch low-end models, 4680 batteries on a large scale, and FSD systems to quickly land.

But from an objective point of view, the impact of the FSD system may not be as big as the other two things.

First of all, there is no clear timetable for the FSD system to enter China, and it also has certain doubts in the United States; secondly, even if the FSD system enters China, it will take a certain amount of time to popularize it on a large scale; third, the level of domestic intelligent driving is not low, and the mainstream manufacturers are crazy involution, 3 years ago FSD entered China, and now into China, the effect is different.

In contrast, low-end models can expand the user base in a short period of time, accumulate popularity, increase attention, and then gain sales.

The 4680 battery can greatly reduce the production cost, allowing Tesla to be more relaxed in product development and pricing.

But Tesla has a certain degree of difficulty in carrying out these two operations.

First of all, Tesla has a high-end image both at home and abroad, and whether the launch of low-end models will affect Tesla's brand image is a more troublesome problem.

Secondly, the progress of the 4680 battery is not as expected, mainly due to Panasonic, so will Panasonic be able to solve the problem in 2024?

3. Joint ventures continue to be "under great pressure"

The size of China's imported car market is relatively small, so the domestic market is dominated by independent and joint ventures.

In 2023, the market share of Chinese brands will reach 56%, an increase of 4.7 percentage points over the same period last year. The influence of the joint venture brand is gradually declining.

The current predicament of joint ventures is twofold.

In the field of fuel vehicles, many of their markets have been lost to Chinese brands such as Geely, Changan, and Great Wall.

In the field of new energy, they now have little to say. Except for Volkswagen, no joint venture brand has successfully entered the mainstream new energy market.

If it is only lost in sales, joint venture manufacturers may not be so panicked, but now is a period of industry change, new energy manufacturers continue to encroach on the territory of fuel vehicles, and joint venture manufacturers have not yet found a way to deal with it. In December 2023, the penetration rate of new energy of mainstream joint venture brands was only 7.4%, and it is in a situation where "the share of fuel vehicles has been attacked by surprise, and the share of new energy cannot be grasped".

In the first half of 2024, if Toyota, Honda and other manufacturers still can't change in the new energy market, their market share will accelerate in the second half of the year.

4. The price war will continue

From an objective point of view, it is not appropriate to simply call price reductions in the automotive industry a "price war".

Fuel vehicles are gradually being phased out, and traditional car manufacturers are forced to exchange price for quantity to clear inventory, which is actually a normal phenomenon.

New energy vehicles are booming, the scale is small in the early stage, the technology is immature, the cost is high, and the pricing is relatively high. However, after the expansion of sales scale, the rapid improvement of the supply chain, and the entry of technology research and development into the harvest period, the cost is rapidly compressed, and the terminal retail price declines, which is the general law of industry development.

If nothing else, these conditions will continue in 2024.

Fuel vehicles are unlikely to "turn over", and price reduction to survive will become the norm, but many models with price reductions this year cannot be sold, and many classic fuel vehicles that people are familiar with next year may also collapse the price system.

New energy vehicles continue to improve, the cost will further decline, and many models will give a more affordable price after they are listed. During the period of industry change, the price of automobiles will inevitably be affected.

5. New forces launch a new round of knockouts

In the past few years, new EV manufacturers have been a powerful force in China's new energy market, which has promoted the popularity of new energy vehicles in China and, to some extent, even dominated the industry's fashion trends.

However, the current market situation is different from a few years ago, in addition to the two giants of BYD and Tesla, the Chinese brands represented by Geely have come from behind, and the transformation is gradually getting better;

Among the mainstream new automakers, only Li Auto's monthly sales have stabilized at more than 40,000 units and achieved profitability, while the monthly sales of other new forces mostly hovered below 20,000 units and suffered huge losses all year round.

This situation is unlikely to continue, and in 2024, the market competition will further intensify, and there are a few new forces with sluggish sales that may be eliminated.

6. The internal pattern of Chinese brands will change

In 2023, the share of Chinese brands will continue to increase, and it seems that the momentum is strong, but not all Chinese brands are proud.

For example, Chinese brands that people are familiar with in the past few years, such as Roewe, Trumpchi, MG, etc., are actually declining in sales.

During the period of industry change, it is not only joint venture brands that are hurt, but also smaller Chinese brands that have not caught the new energy express.

In fact, even in the field of new energy, there are a few happy and a few worried.

Needless to say, Geely rushed into the 60,000 club, Aion and Changan stabilized at the level of 40,000 monthly sales, and the monthly sales of Great Wall New Energy were less than 30,000, and there was a lack of Changan Deep Blue, Geely Galaxy, Extreme Krypton, Lynk & Co, which can play new energy sub-brands, in addition to Chery's new energy sales have always hovered below 30,000 units.

In 2024, Chinese brands will also start the knockout round. But the advantage of Chinese brands is that most of them can come up with a complete set of new energy solutions, which is much stronger than traditional joint venture brands that are at a loss.

7. Huawei may continue to grow

Since the second half of 2023, it is not Tesla that has brought a "small shock" to other new energy brands, but Huawei, which does not make cars.

Huawei's automotive business has been operated independently, based on its core equipment such as the HarmonyOS intelligent cockpit, DriveONE power platform, and ADS2.0 high-end intelligent driving system.

Fighting, technically, can not be beaten for the time being, joining, and not willing to give up their own things, this is the tangled psychology of many new energy manufacturers in the face of Huawei. In 2024, Huawei's models will be further expanded, and this entanglement will continue for a long time.

But that's not a good thing for Huawei.

Huawei claims not to make cars for more than half a year, and has reached in-depth cooperation with BAIC, Chery, Ruifeng, Cialis, Chang'an, etc., but Cialis belongs to "lying flat", BAIC, Chery's own new energy performance is not good, so take some models out to cooperate, Ruifeng belongs to the "jungle" type, and Huawei cooperates with medium and large MPVs, which are niche models, and only Changan has achieved the kind of cooperation that Huawei wants.

The remaining Geely, SAIC, FAW, GAC, Dongfeng, Great Wall, and BYD are still on the sidelines. In fact, this also proves from one side that domestic mainstream manufacturers are indeed relatively strong in the field of new energy technology, each has its own solutions, and they have invested huge amounts of money, and it is difficult to give up their original things to cooperate with Huawei.

But at the same time, Huawei has applied for a series of "Jie" character trademarks, including "Wenjie", "Zhijie", "Yongjie", "Huijie", "Zhujie", "Proud Jie", "Zhijie", "Yijie", "Zunjie", "Qingjie", etc., not long ago, VOYAH also announced its marriage with Huawei, which is also another signal.

It remains to be seen whether other large manufacturers will join Huawei's circle of friends in 2024.

8. Reverse joint ventures may be accelerated

In the era of fuel vehicles, the familiar "joint venture" is generally a domestic manufacturer with people and money, and a foreign-funded manufacturer with technology and brand.

But that has changed since the early days of the EV industry. Mercedes-Benz and BYD have established a joint venture more than ten years ago, and Toyota's joint venture with BYD is also operating.

In the past 2023, Volkswagen will take a stake in Xpeng, Audi will find SAIC, and Stenllantis, the world's fourth largest car company, will subscribe for 20% of the shares of Leap one after another.

Compared to previous joint ventures, these joint ventures or collaborations are "reversed" because the Chinese brands in the joint venture relationship play the role of technology exporters.

China accounts for 60% of the world's new energy market and cannot be lost, but foreign brands have average technical strength and need to find technology exporters.

Which country in the world has a large number of new energy manufacturers and strong technical strength?

China!

If nothing else, there will be more reverse joint venture cases in 2024, which is really a feng shui turn.

9. High-end intelligent driving will become more popular

The matter of autonomous driving has been mentioned since the early days of the commercialization of electric vehicles, but it will suddenly accelerate in 2023, and gradually expand to models of 200,000 yuan or even cheaper.

In 2024, there is no reason to stop this trend. Huawei has previously announced that it will launch ADS2.0 intelligent driving assistance nationwide by the end of the year, and other manufacturers are also working hard to promote it nationwide. If nothing else, high-end intelligent driving will become the standard configuration of mainstream new energy models next year.

In terms of technology, intelligent driving will also continue to be upgraded, and L3 autonomous driving may usher in small-scale commercial use. Of course, in 2024, the mainstream in the field of intelligent driving will still be at the level of L2+.

10. The Chinese army accelerated its descent to sea

In 2023, China will become the global automobile export champion with 5.26 million units, which is the first time in history.

In 2024, Chinese car companies will accelerate their overseas expansion, compared with Geely and Chery, which "ate crabs" more than 20 years ago, Chinese manufacturers are now strong and strong when they go to sea, have technology and capital, and have accumulated certain operational experience overseas.

In 2023, SAIC Motor exported 1,208,200 units, Chery exported 937,100 units, and BYD exported 252,000 units............

We know that once China achieves the first place in any field, it will be difficult to lose again, and in the next few years, the position of the world's first automobile export is likely to be occupied by China.

Conclusion: In 2023, the trend of the automotive industry's transformation to new energy is becoming more and more obvious, Chinese brands have been making great progress for a whole year, and the market competition in 2024 will be more intense, and products, technologies, services, and experiences will continue to improve.