Frankly, I think that if there were no trade barriers, they would probably have almost destroyed the vast majority of their competitors in the world.
The success in sales is certainly gratifying, but the competition from competitors, especially the strongest ones, is certainly even more intoxicating. The above sentence comes from Tesla CEO Elon Musk's speech at the earnings conference.
Individual struggle
For the time being, Tesla will bid farewell to the high-growth range because of the slow product iteration and the price reduction is not large enough, and do not talk about the extremely cruel competition situation in China's new energy vehicles, you might as well take a look at Xiaomi Auto first.
After Xiaomi's official announcement on March 12, SU7 was officially released, I had dinner at McDonald's, and I listened to the two men at the next table discussing Xiaomi cars, whether it was this scattered social observation, or Baidu index, WeChat index and other data performance, it means that Xiaomi car SU7 at the press conference on March 28 will be the peak of popularity in this year's Chinese car conference.
It's another thing to be hot and unsuccessful.
The current situation is that there are a lot of people who look at Xiaomi cars, and there are not many people who are optimistic about Xiaomi cars. The reason, it comes and goes, such as the timing of Xiaomi Automobile's entry into the game, and the timing of Xiaomi's mobile phone entry back then, which is not the same. What stinky fish and rotten shrimp were used to make mobile phones, but now Lei Jun lifted the quilt, and it was full of Li Shufu, Wang Chuanfu, Li Bin, and Li Xiang, and he was so scared that he couldn't sleep.
Another example is everyone's expectation for Xiaomi cars is to make a friend for 99,000, you drive a BYD Qin Plus hybrid, I drive a Xiaomi SU7 pure electric, and everyone runs Didi Express together after being fired at the age of 35 and enjoys life on wheels. If it starts at 199,000 and drives a Xiaomi car, it will be a betrayal of the class.
If you are sure that Xiaomi Auto will not fail, then you really have to seriously find some reliable reasons.
Focusing on Xiaomi and Lei Jun itself, one is that Xiaomi Group itself has abundant cash flow, and Lei Jun is a continuously successful entrepreneur and investor.
In addition, Huawei is now also killing in the field of new energy vehicles, which is somewhat similar to the previous situation of sweeping thousands of troops in the field of mobile phones, and Xiaomi is one of the few mobile phone manufacturers that can resist Huawei without falling.
Specifically at the level of car manufacturing, under the new logic of "software-defined vehicles" or "new energy vehicles are computers running on wheels", mobile phone companies that are known for intelligence, interaction, design, interconnection and insight into user needs have great natural advantages.
However, we must be clear that the struggle of the individual is important, but the course of history is the decisive factor.
The course of history
The current de facto deflation can be seen as the failure of monetary policy to keep up with this round of drastic industrial transformation, as well as the sharp increase in productivity and technological power.
This is also why not long ago put forward the "Action Plan for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-in" to promote the upgrading of consumer goods such as automobiles, home appliances, and home decoration. According to data from the National Development and Reform Commission, by the end of 2023, the number of civilian cars will reach 336 million, and the number of household appliances such as refrigerators, washing machines, and air conditioners will exceed 3 billion.
The plan also gives some specific targets, by 2027, the recycling of end-of-life vehicles will about double compared to 2023, the transaction volume of used cars will increase by 45% compared to 2023, and the recycling volume of used household appliances will increase by 30% compared to 2023.
Specific to the automotive industry, especially the new energy industry, a very obvious feeling is that the pace of products of new forces is too fast.
To be more specific, it is the unprecedented speed of new technology decentralization, as well as the iteration speed and intensity of the same series of models, and I can't wait to squeeze the toothpaste.
▲ Xpeng G6
To give two examples, when the Xpeng G6 was released last year, we exclaimed that in the early 200,000s, you can enjoy the 800V silicon carbide platform and XNGP high-end intelligent driving, which were once considered to be the only configurations of high-end electric vehicles.
Less than a year later, He Xiaopeng, the founder of Xpeng, said at the Electric Vehicle 100 Forum that the inflection point of high-end intelligent driving will come in the next 18 months, and the Xpeng AI intelligent driving model will be launched in the second quarter of this year. Xpeng will launch a new brand A-class product of 100,000 to 150,000 yuan to the world within a month, which will be equipped with Xpeng's high-level intelligent driving system and even unmanned driving system, and can achieve profitability.
This is the speed of decentralization of new technologies, and the high-end intelligent driving function has quickly landed from more than 300,000 luxury models to 200,000 mid-to-high-end models, and then to 10-150,000 mainstream models, achieving the next level in a year.
▲ New Zeekr 001
Then there is the new ZEEKR 001 model updated at the beginning of the year, its upgrade can be called a squeezing toothpaste, the maximum power of the single-motor version has reached 310KW, capable of outputting 422 horsepower, and the dual motors can output 789 horsepower, the voltage system has been upgraded to 800V, and the new dual-cavity air suspension, lidar, Snapdragon 8295, thermal management upgrades, the central control screen, instrument screen and head-up display have been greatly upgraded, the number of wireless charging watts and speakers of mobile phones has been improved, and the starting price is 26.9 10,000 yuan is also much lower than that of the previous generation.
In addition to the shortcomings of the intelligent driving chip, the new Zeekrypton 001 can be regarded as a hexagonal warrior in the price segment, which also makes this model more than 20,000 orders in less than 20 days on the market, and the first month of orders is expected to exceed 30,000 units.
So, 269,000 yuan, what kind of electric car can you buy in Europe?
The answer is, the BYD Dolphin, which is only sold in the early 100,000s in China.
▲ BYD Dolphin, priced at about 30,000 euros in Europe
44.9 kWh, 000 acceleration in 10 seconds, top speed 150km/h, no intelligent driving, the small size of the BYD Dolphin exported to Europe, the price is 30,000 euros, equivalent to 235,000 yuan, its competitors, such as Renault's low-end electric car at a similar price, is only equipped with a battery of more than 20 degrees, and the range is generally less than 200km.
The ID.3, which is unsalable in China and shouts for help Volkswagen trams, starts at 125,900 yuan in China and will sell for 40,000 euros, equivalent to more than 300,000 yuan, in Europe.
The ZEEKR 001 and BYD Dolphin, which are not at all a grade in terms of product power, did not expect that after pulling through the exchange rate, the price would be similar.
In terms of reason, it can only be said that China is too strong to engage in electric vehicles and the electric vehicle industry chain.
Everyone agreed to save energy and reduce emissions together to promote the global transition to sustainable energy, but after a trot, it was found that Tesla and BYD were leading the way, followed by SAIC, GAC, Changan, Wei Xiaoli, etc., all Chinese brands, Mercedes-Benz, Volkswagen, BMW, Renault, etc.
The most incredible thing is that Toyota, the global car boss, is still preparing to take off its running shoes and change into swimsuits at the starting point, trying to change the competitive field, trying to find the future in hydroxides.
Domestic consumers and media have become accustomed to the same price of domestic oil and electricity, accustomed to more than 100,000 yuan can buy a CLTC battery with a range of more than 500 kilometers, and 200,000 yuan to buy a mid-to-high-end pure electric car with no shortcomings in the cockpit intelligent driving power range, but for European and American consumers and media, why China-made electric cars are so cheap and so good is a topic worth discussing.
For example, the New York Times has written a number of articles to explore why BYD's new energy sales can surpass Tesla, and why it can neither catch up with China in terms of core components of batteries, nor even battery sources.
UBS found that the manufacturing cost of the BYD Seal electric car is 35% lower than the Volkswagen ID.3 mentioned above, and this lower cost includes BYD's cheaper lithium iron phosphate batteries, 3/4 of the parts are produced by BYD itself, and the lower labor price in China, while Volkswagen needs to outsource 2/3 of the parts.
The New York Times also estimates that even though Europe and the United States have invested billions of dollars in making batteries for electric vehicles, China is far ahead in mining rare minerals, training engineers and building large factories, and it may take decades for the rest of the world to catch up.
Benchmark Mining Intelligence, a consulting group, estimates that even by 2030, China will produce more than twice as many batteries as all other countries combined.
A microscopic example is the fact that Huntsman began building a $50 million plant in Texas two years ago to produce ultra-pure ethylene carbonate, a chemical needed for electric vehicle batteries.
Then China entered the market, and the price of ultra-pure ethylene carbonate plummeted from $4,000 per ton to $700 per tonne, a price that made Huntsman no chance of making money, and after investing $30 million, the project was terminated.
According to statistics, China controls 41% of the world's cobalt mining and more than half of lithium mining, which means that China's control over the upstream and downstream of electric vehicle batteries makes Europe and the United States feel hopeless to catch up.
EARLIER THIS YEAR, THE COVER OF THE PRESTIGIOUS PUBLICATION "THE ECONOMIST" USED "CHINA'S EV ONSLAUGHT" TO DESCRIBE THE IMPACT THAT CHINESE ELECTRIC VEHICLES WILL HAVE ON THE EUROPEAN CAR INDUSTRY AND MARKET: BY 2030, CHINA COULD DOUBLE ITS SHARE OF THE GLOBAL MARKET TO ONE-THIRD, ENDING THE DOMINANCE OF THE WESTERN AUTO GIANTS, ESPECIALLY IN EUROPE.
Therefore, in the area of electric vehicles, we can indeed boil and silently say: The great powers are actually myself?
At this point, we can basically summarize the historical process of electric vehicles: involution is also really involution, domestic car companies do good and cheap products, the key is not to make money. In terms of top-level design, it is necessary to drive domestic demand, consumption upgrades, oil for electricity, Fit for Feifan, and Geely for Zeekr.
A more critical consensus is also condensing: such a strong product and industrial capacity, going to sea is the only way to break the involution.
▲ BYD Yuan Plus, known as BYD Atto 3 overseas
Go overseas
After the boiling is over, it is still necessary to see the real market conditions to calm down.
For the whole of 2023, BYD, the leader of China's auto market, sold a total of 3.02 million vehicles, ranking ninth in the world, followed by Toyota with 10.65 million vehicles and Volkswagen with 9.24 million vehicles.
In the Chinese market, the Hyundai-Kia Group, which is classified as a loser, sold 7.3 million units, and the Stellantis Group (which owns Peugeot, Citroen, Fiat, Jeep, Maserati and other brands) sold 6.4 million units.
So, a paradox appeared, saying that a good boy went out of the mountain and swept Liuhe? How can I go out and see that I am at the end of the crane on the list of the strongest? So am I strong or weak?
By 2024, the current domestic new energy penetration rate will exceed 40%, compared with the penetration rate of 31.6% in 2023, and there will be a rapid increase, and nearly half of the passenger cars will be on the green card, but at the global level, fuel vehicles are still the mainstream, and overseas sales of new energy, electric vehicle-related industrial chains, and infrastructure, such as charging piles, are far inferior to domestic.
Returning to a global perspective, the global new energy penetration rate in 2023 will be about 16%, which is only half of China's, and more than eighty percent of cars are fuel vehicles.
Don't forget, the Chinese auto market with 30 million passenger cars per year is the world's largest car market, and it is also the second largest U.S. market size is almost twice the size, if you exclude China, which has a higher penetration rate of new energy, and the United States, where Chinese cars are difficult to sell in the past, the world is still a world dominated by oil cars, even if the Tesla Model Y surpasses the Toyota Corolla and becomes the world's best-selling model, but Toyota Volkswagen Hyundai Kia is still the mainstream of the world.
This is the paradox and fragmentation of the present, the future is bright, but the road is rugged and tortuous.
In fact, the Electric Vehicle 100 Forum, which brings together industry executives, can basically be regarded as setting the tone for the entire industry, and "electrification, intelligence, low-carbonization, and globalization" is the consensus and industry direction.
In fact, regarding globalization, the most successful industry for Chinese companies is the mobile phone industry.
At present, among the top 10 mobile phone manufacturers in the world, Chinese brands account for eight out of ten, the first and second are Apple and Samsung, followed by Xiaomi, OPPO, Transsion, vivo, Honor, Lenovo & Motorola, Huawei, and realme.
From another point of view, domestic smartphones present two "50%" market situations: one is domestic smartphone shipments, accounting for about 50% of global smartphone shipments, and the other is the overseas sales of mainstream domestic mobile phone brands, accounting for about 50% of the total sales.
Although China's automobile exports surpassed Japan to become the world's largest last year, with 5.221 million units, a year-on-year increase of 57.4%, the total value of automobile exports was 101.6 billion US dollars, with an export growth rate of 69%.
Toyota and Volkswagen, is another Apple and Samsung.
What they all have in common is that the company's products occupy a mainstream position in their own countries, and more importantly, overseas sales are the real majority. For example, Japanese cars will sell 23.5 million units in 2022, 3.8 million units will be digested domestically, and nearly 20 million units will be sold overseas.
In addition to the 4.06 million units exported, nearly 16 million Japanese cars were sold through overseas factories and joint ventures.
Marketing to the world, this is another paradox, while Chinese cars have achieved remarkable results, there is also a huge gap with Toyota and Volkswagen and other old car manufacturers.
The ideal situation is, of course, a double "50%" similar to that of a mobile phone, but the actual situation of the car going overseas is more difficult.
The most obvious is that the proportion of the transportation cost of the car to the selling price is much higher than that of the mobile phone, for example, "Yuanchuan Automobile Review" has reported: In the second half of 2022, the global ro-ro ship capacity will be in short supply, the rent will soar, and the freight of a car from China to Israel will reach 15,000 yuan, which is almost the same as the profit.
As a result, automobile manufacturers have also set off a shipbuilding fever and a ship buying fever.
▲ BYD "Pioneer No. 1" ro-ro ship
Just this February, the Trailblazer 1, carrying more than 5,000 BYD electric vehicles, sailed from China through the Strait of Malacca, rounded the Cape of Good Hope, and finally arrived in Europe after a two-month voyage.
BYD plans to acquire 8 dedicated ro-ro ships to transport electric vehicles within 2 years, which means that BYD Auto will have a large independent control of automobile export capacity.
After the huge price inversion of models such as the Volkswagen ID.3 in Germany and China, there is no doubt that Chinese-made electric vehicles are hugely competitive in Europe. Generally, after this situation occurs, various anti-dumping and countervailing duty compliance investigations will follow.
In order to gain a foothold in the European market, BYD will open factories in Europe, and in addition to Hungary, BYD will also build factories in key export markets such as Uzbekistan, Thailand, Brazil, Indonesia, and Mexico, all of which can achieve an annual production capacity of nearly 1 million vehicles.
Geely is another model, Geely has previously acquired and controlled a large number of overseas car brands, such as Volvo, smart, Lotus, these brands naturally have a market base and brand recognition overseas, and at the same time, brands such as Lynk & Co have also begun to try new models of going overseas with the help of the spillover effect of these brands.
An Conghui, President of Geely Holding Group and CEO of Zeekr Intelligent Technology, said:
Some people lift the table, some people get off the table, some multinational car companies have slowed down the pace of electrification, and some people are even worried about whether new energy vehicles will become China's one-man show.
The relationship between intelligent networked new energy vehicles and traditional fuel vehicles is by no means a simple substitution, but an all-round evolution. For example, an electric car may seem to have thousands of fewer parts than a traditional combustion vehicle, but it actually has at least 1 billion lines of code.
All in all, for Chinese automobiles, this is a turbulent era, the best opportunity to subvert the pattern of automobiles for a hundred years and half a century, and of course, it is also the beginning of the knockout competition, and the cruel stage of the internal and external volumes.
What's the matter with Xiaomi?
If the perspective is still stuck in the involution, on the basis of the 30 million units of China's passenger car market, then we should indeed be pessimistic and cautious.
However, from the perspective of the upgrading of domestic demand, the prospect of going overseas, and the ultimate goal of two "50%", the future is simply too optimistic.
The reality is somewhere in between.
The new entrant Xiaomi is also in between.
Xiaomi is the most successful Chinese mobile phone manufacturer in the world, with a total of 146 million mobile phones sold in 2023, accounting for 13% of the global market share, which is also the 14th consecutive quarter that Xiaomi has been among the top three in the world, of which Xiaomi has sold more than 110 million mobile phones overseas, accounting for the majority of overseas sales.
▲ Xiaomi 14 Ultra
At the same time, Xiaomi is also the company that has tried the most from the mid-range to the high-end and finally succeeded. For a long time, the Xiaomi brand has been trapped in the 1999 yuan starting sale, the "cost-effective" label, and the Redmi brand, which has never been able to stand up for the high-end image.
However, in recent generations, the Xiaomi digital series, after improving the design level, image capabilities and Leica co-branding, has made a slightly small breakthrough in high-end.
Coupled with Xiaomi's natural self-contained traffic, as well as the success and topicality of SU7 itself in product definition, the attention conversion funnel formed in this way is nothing other than Huawei's Hongmeng Zhixing system.
In essence, judging whether Xiaomi will succeed or not is a question of how to look at Xiaomi as a company.
If you only consider that it is a car manufacturer limited to the local Chinese market, then its potential is indeed limited.
If Xiaomi is naturally regarded as an international car manufacturer, then Xiaomi has a better foundation for going overseas than most Chinese car companies: rich global experience and good global popularity.
At present, the penetration rate of new energy in the United States and South Korea is less than 10%, Japan's is even lower than 3%, and the penetration rate of new energy in major European countries is about 20%.
Norway and Sweden are outrageous, with exaggerated new energy penetration rates of around 70% and 50%.
From a global perspective and the potential of the new energy market, many manufacturers of Chinese electric vehicles, including Xiaomi, still have great opportunities, but the road is long enough. After all, the correspondence between new energy and fuel vehicles cannot be summarized simply by smart machines and functional machines.
Including the construction of charging piles, as well as the larger geopolitical factors involved in automobiles, are not comparable to the smartphone industry.
But the process of consensus and history is already here, and moving forward is the only direction.