The secret of BYD's price reduction at the beginning of the year: destocking in the first half of the year and pushing more intelligent models in the second half of the year

Alpha Workshop

2024-04-08 09:20Posted on the official account of Beijing Alpha Factory

■ BYD plans to launch new Dynasty and Ocean models in the second half of the year. The hardware and software of the new model will be fully upgraded, and "no increase in volume" will be carried out.

■ Models in the 100,000 price band will adopt the DJI Intelligent Driving solution, and the price band above 200,000 yuan will adopt the Horizon plan.

■ It will bring long-term competitive pressure to Ideal, NIO, Xpeng and the newly launched Xiaomi Automobile.

In the past March, BYD (002594.SZ/1211.HK) sold more than 300,000 vehicles.

This represents a 46% increase from last year.

The secret of BYD's price reduction at the beginning of the year: destocking in the first half of the year and pushing more intelligent models in the second half of the year

This wave of sales "skyrocketed" is not unrelated to BYD's price cuts across the board in February.

On February 19, BYD announced that its two plug-in hybrid models, Qin PLUS and Destroyer 05 Glory Edition, will have a starting price of only 79,800 yuan, a drop of 20,000 yuan compared with the previous version of the model.

After that, a number of models of BYD Dynasty and Marine new energy vehicles continued to reduce prices, and triggered a wave of industry-wide "price reductions".

BYD's series of price reduction "big moves" are as fast as the wind.

On the surface, BYD does not hesitate to compress profit margins in an attempt to quickly squeeze out the market, but judging from the upcoming events, it should be more to clear the inventory and prepare for the launch of the new Dynasty and marine models in the second half of the year.

According to people familiar with the matter, BYD plans to "refresh and update" in the second half of the year and launch new dynasty and marine models. And the hardware and software of the new model will be fully upgraded, and it is likely that there will be a "increase in volume without price increase".

The person said that this upgrade, BYD will have a huge improvement in intelligent driving, and according to different price ranges, with DJI, Horizon and other intelligent driving solution providers to carry out in-depth cooperation. Among them, the 100,000 price band models will adopt the DJI intelligent driving solution, and the price band of more than 200,000 yuan will use the horizon plan.

There have been early signs of cooperation between BYD and DJI and Horizon.

In January this year, according to media reports, DJI Automotive has received a clear investment intention from BYD and FAW, and the parties are currently advancing the financing process and will jointly develop autonomous driving solutions in the future.

DJI Automotive was founded in 2016 and received the first batch of autonomous driving test licenses in Shenzhen in 2018.

At present, DJI's in-vehicle intelligent driving focuses on the "cost-effective" route, and does not rely on high-precision maps and lidar to achieve urban NOA. The "Lingxi Intelligent Driving System" jointly developed by DJI Automotive and Wuling directly "lowers" the threshold of intelligent driving to the 100,000-yuan level models.

With the blessing of DJI's low-cost intelligent driving solution, BYD is expected to further reduce the cost of high-end intelligent hardware.

At the same time, BYD is also a "deep strategic partner" of Horizon and its major customer.

On the 2024 BYD Dream Day in January this year, the Han EV Glory Edition Intelligent Driving Edition, the first dynasty model with a price of 249,800 yuan and equipped with the "Eye of the Gods" DiPilot 100 intelligent driving assistance system, was officially unveiled. The hardware of this model uses the high-end intelligent driving special computing solution provided by Horizon Journey5.

BYD's "in-depth cooperation" with Horizon has a deeper origin.

In August last year, it was rumored that Liao Jie, the former R&D director of intelligent driving at Horizon, officially joined BYD as the head of the intelligent driving Shanghai team. Later, some media asked the company for confirmation and confirmed that the news of the entry was true.

For a long time, BYD's intelligent driving has been "criticized" by the industry and the market. Wang Chuanfu also publicly said: "Autonomous driving is a flicker".

However, since the beginning of this year, BYD and Wang Chuanfu have begun to correct this perception with actions.

Entering 2024, BYD has clearly released a signal to increase intelligence.

At the Dream Day site, BYD demonstrated a series of "black technologies" including vehicle intelligence, intelligent driving, intelligent parking and intelligent cockpit. Wang Chuanfu even emphasized that "to accelerate the popularization of intelligent driving, BYD has the confidence and ability."

On the other hand, BYD is accelerating the establishment of a "circle of intelligent driving friends".

While seeking deep binding with BYD's stake in DJI Automotive, BYD's intelligent driving ecology will adopt multiple sets of solutions in parallel.

Yangwang's full-stack self-development, the cooperation between DENZA and Momenta, the 200,000-level Dynasty model equipped with Horizon chips, and the introduction of 100,000-level low-cost cars into DJI Automotive are all included.

Even AI chip giant Nvidia (NVDA.O) has thrown an olive branch to BYD.

Nvidia announced at the GTC 2024 conference that BYD will adopt its next-generation smart car chip, Thor.

On the whole, BYD adopts the strategy of "putting eggs in multiple baskets" when cooperating with solution providers.

In this way, the core technology of intelligent driving will not appear "subject to the same party", on the other hand, BYD can also flexibly match the intelligent driving solutions of different levels and suppliers according to different product prices.

Some media said that BYD had intended to contact Huawei car BU for investment, but was politely rejected by Huawei.

The reason why it is difficult for the two sides to cooperate, the author is not surprised - Huawei's "smart selection model" is destined to be in a dominant position in cooperation with car companies, and Huawei prefers to choose to cooperate with Cialis (601127. SH), Chery, JAC (600418. SH), BAIC (600733. SH) and other relatively "weak" car companies.

With BYD's leading position in the new energy vehicle industry, of course, it is difficult to accept being dominated by others. BYD, which has the advantages of the whole industry chain, is obviously unwilling to share its "soul" with suppliers.

For a long time, as a means of differentiated competition, the ideal (02015. HK), NIO (NIO.NYSE), Xpeng (09868. HK) and the newly listed Xiaomi Auto have all kinds of intelligence as a significant selling point. BYD's vigorous upgrade of the intelligence of its models will bring long-term competitive pressure to the above-mentioned friends, and will permanently change the competition pattern of domestic new energy vehicles.

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