Shulou(Shulou.com)11/24 Report--

"there is no state subsidy to withdraw, there is no Tesla price reduction, some car companies, some brands also have no future."

In an interview with NetEase's "Energy Field" of science and technology, Li Jinyong, executive chairman of the Automobile Dealers' Chamber of Commerce and chairman of the New Energy Automobile Committee of the all-China Federation of Industry and Commerce, spoke bluntly about the impact of the current "national subsidy and retreat" on some car companies.

For 14 years, the "national subsidy" policy of new energy vehicles officially withdrew from the historical stage, and the subsidy for the purchase of new energy vehicles ended on December 31, 2022. Car companies, accustomed to subsidized feeding, have been collectively weaned.

At the same time, under the squeeze of multiple factors, such as scale effect, cost pressure, price war, and double points policy variables, all domestic new energy car companies will have an unprecedented encounter in a full, free and cruel competitive market. In this regard, no one can take a chance: "this is a time to test strategy and judgment."

In January 2023, new energy vehicles handed over a set of awkward "answers": with the exception of Tesla, BYD and ideal, which rose 286.5%, 62% and 23% respectively from the same period last year, sales of almost the whole new energy vehicle market declined to varying degrees. Zero run, which had an eye-catching performance, plunged 85 per cent in January compared with the same period last year and fell 85 per cent compared with the same period last year. Naha, the champion of new power sales, delivered only 6016 vehicles in January, down 45.4 per cent from the same period last year.

Someone joked: "after more than ten years of breast-feeding, I haven't grown up yet!"

After the real weaning, can the car companies still be able to ride the wind and waves in the market?

First, the country subsidizes the slope: a good time? Bad time? "in 2022, the production and sales of new energy vehicles across the country has reached 6.88 million, with a penetration rate of 26%. Does this strong young man need to continue to enjoy breast milk?"

Zhang Hong, secretary-general of the New Energy vehicle Branch of the China Automobile Circulation Association, said in an interview with NetEase's Science and Technology Energy Field: "the state subsidy has accompanied the development of China's new energy vehicle industry into the world's largest production and marketing country and market. but just as babies have to be weaned when they grow into teenagers, subsidy retreat is also a necessary page in the development of new energy vehicles."

In the past 13 years of constant bickering, China's new energy vehicles have grown rapidly. A well-known achievement is that in 2016, China produced 517000 new energy vehicles, but seven years later, this number has become 6.8 million, and its market share has increased to 25.6%. Three years ahead of schedule, the national "Energy Saving and New Energy vehicle Industry Development Plan" set a target of 20% by 2025.

Subsidies are essential and most common if you want to overtake at a corner rather than turn over, and use a pair of "visible hands" to promote emerging industries: price means can expand the size of the market for both producers and consumers. it also allows enterprises to reduce production costs with the help of economies of scale.

"subsidies will have to end sooner or later, but it is believed that various forms of policies will continue to be introduced." Wang Kai, founder and CTO of Youdian Technology, and "Energy Field" of NetEase Technology talked about the beginning and end of subsidies on the production side: "there is no subsidy that does not decline, and the purpose of the subsidy is to abolish the subsidy eventually."

Whether or not to abolish subsidies, another consideration is whether the current new energy market is mature enough.

"the core standard is the sales of new energy vehicles in non-restricted cities. These cities now have a considerable number of consumers who are willing to buy new energy vehicles." Li Jinyong said that non-restricted second-and third-tier cities are closer to a perfectly competitive market, and people have formed a buying habit.

According to traffic insurance data from the Ministry of Public Security, the penetration rate of new energy vehicles in unrestricted cities was only 3% in 2019 and 11.2% in 2021. In the first half of 2022, the figure was more than 20%, doubling growth.

In an interview with NetEase Technology, Mou Ying, co-founder of Qingyu Capital, an equity investment institution focused on the subdivision of new energy industries, took Tesla as an example to talk about another point of view: "the existence of Tesla in recent years." it proves that the new energy vehicle manufacturing market is indeed profitable. " Mou Ying said that Tesla has a strong ability to manage and integrate the supply chain, which gives it lower costs and allows investors to see the possibility of making a profit in the new energy market.

An intuitive example is that Tesla's proportion of supply in China rose from about 50 per cent to 95 per cent from 2019 to 2022. Tesla's local suppliers in China have almost everything from battery chassis to steering wheel and seat belts, which makes many people shout: "except for the car logo, everything else is made in China."

On the other hand, in the field of electrification, from upstream raw materials to downstream manufacturing links, there has been a relatively perfect independent industrial chain of the three electricity system. For example, some car companies such as BYD already have complete three-electricity system technology and production capacity, which can basically be controlled independently, while in the field of intelligence, the penetration rate of intelligent configuration of domestic models is also increasing in the field of intelligent cockpit and intelligent driving configuration.

"in the existence of state subsidies for more than a decade, China's new energy vehicles have a quite complete industrial chain, which is a huge advantage." Mou Ying said. The measure of the maturity of a market depends on whether the market can gradually move downward and return to the place with the largest number of people: "the main structure of the current automobile market is actually an olive type. But on the whole, the market still has to move downwards. Now Tesla is gradually reducing the price, which is also inevitable."

"this may not be a good time."

Although the market is mature enough, Li Jinyong believes that the timing of the withdrawal of subsidies is open to question: domestic brands are facing multiple pressures at this time, "affected by the surge in battery costs and irregular changes in the 'double points' policy in 2021. The integral price of new energy vehicles is too low, car companies are not subsidized enough, at this time the cost pressure will be great."

"the so-called double points policy, simply understood, is the means of adjusting funds for fuel vehicles and new energy vehicles." Li Jinyong pointed out that the original intention of the double points policy is to continue the state subsidies for new energy vehicles, through integral transactions, increase the cost of fuel vehicles, reduce the cost of new energy, to promote the development of new energy. However, the result of the implementation of the double points policy has not achieved the original goal.

Generally speaking, there are more negative points for fuel car companies and more positive points for new energy car companies, and the former has to buy positive points from the latter to offset negative points. However, data from the Ministry of Industry and Information Technology show that the positive points for fuel consumption of Chinese passenger cars increased to 1594 million in 2021 from 4.37 million in 2020, while the negative points decreased to 5.63 million from 1171 in 2020. More positive points and less negative points in the industry, market supply exceeds demand, leading to a sharp decline in positive points prices, new energy car companies can get a rapid reduction in funds, a sharp increase in pressure.

Talking about the reasons, Li Jinyong said that according to the plan, the national fuel consumption target for 2025 is 4L / 100km 100km and 4.92L / km in 2021, which is decreasing year by year. However, the way the country calculates fuel consumption has changed in 2021, which has triggered a chain reaction: some car companies that have increased fuel consumption in actual operation have reduced fuel consumption according to the new standard, so the negative points of the whole industry have also been greatly reduced: "this may be unreasonable."

Second, industry insiders: there will be a large number of players out if the cost pressure, so that many car companies can not bear the burden, now the state subsidy slope, no less than another time to make things worse.

In the case of battery costs, for example, this has almost become the pain of the industry as a whole-although lithium carbonate has fallen for three months to 400000 yuan / ton since December 2022, it has fallen sharply from last year's high of 600000 / ton before subsidies for new energy vehicles fell-but even so, today's price has soared tenfold from 40,000 yuan / ton in 2020.

The reason why it is "almost" is that even the joys and sorrows of the industry are not the same: when Chinese domestic brands denounce "where is the money going" in the howl of "selling a lost car", battery raw material manufacturers have already made a lot of money in this cyclical rise in lithium mining-for example, Ganfeng Lithium, the industry leader, has made a net profit of 14.795 billion in the first three quarters of 2022, a year-on-year increase of nearly five times. Tianqi Lithium Industry made a profit of 15.981 billion in the first three quarters of 2022, a year-on-year increase of nearly 30 times.

There are a lot of similar appeals. For example, Miao Wei, deputy director of the Economic Committee of the CPPCC National Committee, said recently that the withdrawal of policy subsidies will have a certain impact on the domestic new energy vehicle market in the first quarter of this year and even the first half of this year, and suggested that the purchase reduction policy for new energy vehicles, which is scheduled to withdraw by the end of this year, should be continued.

The continuation may lie in a vague worry: among many calibre, the core of subsidies is not the "big money" that has been going on for more than a decade, but the use of funds to subvert the upfront costs of small emerging industries, weak markets and unstable technology. trade time for space.

According to the most direct understanding, the disappearance of subsidies will lead to an increase in costs, which will lead to higher prices. In fact, from mid-2022 to now, many new energy brands have quietly set off a "price rise": for example, BYD, Weima, Nezha, Changan Deep Blue, Volkswagen and so on have announced increases in the terminal prices of some of their models, ranging from 1,000 yuan to 10,000 yuan.

"the sharp rise in battery costs in the market in the past two years, as well as the decline in integral prices and the decline in subsidies, have a great impact on low-priced cars, especially on the A00 class."

Li Jinyong said that the new energy vehicles led by the A00 have the largest sales volume, fighting for economies of scale and making profits by volume. However, its profit is small, the room for twists and turns is small, this time the impact is the greatest. Although the middle and high-end models of about 300000 are also affected, there are many ways to digest them. After all, there is a lot of added value: "this time, the prices of 200, 000, 300, 000 cars have not gone up, but they are still cutting prices. Why?" There is a lot of room between the purchase cost and the sales price of these vehicles. The industrial cost of a car with a price of 200,000 yuan, including spare parts and steel plates, is only about 120000, which is about 6-30% discount. "

Because of this, seemingly "strange" price increases and price cuts are staged simultaneously this spring: in January 2023, the A, B and C classes of new energy passenger cars showed positive growth compared with the same period last year, however, the A00 and A0 classes decreased compared with the same period last year; on the other hand, the "catfish" Tesla roiled the industry, and after its Model 3 and Model Y sharp price cuts, car companies such as Mian Jie, Xiaopeng and Xilai also started a trend of price reduction.

"in 2023, the new energy vehicle market will usher in a huge shift from two-wheel drive in policy and market to single-wheel drive in the market, and the competition will become more and more fierce. at present, there are 56 new energy vehicles from 29 manufacturers in the market. After the decline of state subsidy, except for car companies with strong industrial chains and rich product chains such as BYD and Tesla, most car companies are facing the pressure that car prices must be raised." Zhang Hong said that under the influence of multiple factors, not only small and medium-sized car companies are having a hard time, but dealers sandwiched between consumers who hold money on the sidelines and car companies forced to cut prices will also be greatly affected.

"there is no doubt that there will be a large number of players out." Li Jinyong said.

Third, how many enterprises are supported by the state to make ends meet? In fact, in order to facilitate the gradual weaning of manufacturers, the intensity of state subsidies is gradually decreasing over the years: the proportion of new energy vehicles receiving state subsidies decreased year by year between 2017 and 2021. Among them, 78% in 2017 dropped to 63% in 2020 and 47% in 2021. The subsidy price is also decreasing year by year: from 2015 to 2020, the average subsidy for new energy vehicles dropped from 106400 yuan to 23000 yuan.

In such a context, the consideration lies not only in support, but also in what Darwin called "natural selection": whether in 2016 or 2019, subsidies for new energy vehicles have fallen sharply several times, and excellent enterprises have survived the tide. Will spend money to expand capacity, upgrade technology, iterative products.

The players who continue to indulge in "nipple music" are washed out and eliminated and become passers-by.

"these enterprises, which mainly pursue subsidies, their products are not market-oriented pricing, but rely on policies to eat subsidies, such as BAIC new energy." Li Jinyong said.

In the era of high subsidies, BAIC New Energy has been the first pure electric vehicle, with annual sales of more than 100,000 vehicles. However, its model oil to electricity is more, the car design is more aging, with the gradual withdrawal of subsidies will destroy the public. An intuitive example is that the company made a profit of 92 million yuan in 2019, but the net profit after deducting it reached 874 million yuan, of which the largest income from non-recurrent profit and loss came from government subsidies, the amount of which was 1.041 billion yuan. BAIC New Energy at that time lived on government subsidies.

On the one hand, the amount of new energy subsidies is declining year by year, on the other hand, the threshold of access is gradually raised. For example, the minimum mileage requirement for pure electric driving in 2018 has been raised from 100 km to 150 km. It will rise to 250 km in 2019 and 300 km in 2021.

As a result, many car companies that enjoy pleasure and do not want to make progress in subsidies have been eliminated by the rising threshold year by year. For example, with Zhidou D2 model popular Zhidou car, at that time, the model market guidance pricing of 158800 yuan, taking into account a variety of subsidies, the lowest price only 49800 yuan. This made it the top seller in the country with 23000 vehicles in 2015, and Zhidou's sales peaked at 42000 in 2017.

However, after the subsidy threshold was raised in 2018, Zhi Dou sales showed a cliff decline. In the second half of 2019, Zhi Dou was listed on the list of executees 48 times, and finally the company's shares could only be auctioned. In just two years, the former sales champion broke up with the future, which is sad. And this is just a microcosm. Including Chery's early miniature pure electric model eQ series, Jianghuai iEV series, Changan Mercedes-Benz EV and other models, are also raised by the subsidy threshold, gradually decline to disappear.

"in the early days of the development of new energy vehicles, in order to cheat compensation, many mercenary car companies rushed to launch a series of models with unknown positioning, simple structure and many hidden dangers of rough quality. the only fate of such car companies is to be out." Zhang Hong said.

Since the initial attempt of China's "Ten cities and Thousand vehicles demonstration Project" in 2020, new energy vehicles have been listed as one of the "seven strategic emerging industries" in 2010. and then the State Council launched the "Energy Saving and New Energy vehicle Industry Development Plan (2012-2012)".

Over the past 14 years, China's sales of new energy vehicles have increased from 80,000 in 2014 to about to break through the 8 million mark. State subsidies have followed all the way. China's new energy vehicles have gradually changed from small to big and from weak to strong. Since 2015, China has ranked first in production and sales in the world for seven consecutive years.

"if consumers have been relying on subsidies to consider buying new energy vehicles, then this is the sadness of China's new energy vehicle industry!" "neither the minds of consumers nor the products of car companies can be flowers in a greenhouse made up of subsidies," Zhang said. "they must experience wind and rain in the fierce market competition and then become stronger and more mature."

Fourth, weaning, closing doors, and the end of the era of barbaric growth industry insiders told NetEase science and technology "energy field" that the real vitality and competitiveness of car companies are not and should not rely on subsidies at all.

"what money did BYD make before 2021? it makes more than a billion yuan a year. But why did you suddenly make so much money in 2022? with the scale up, the algorithm of the whole marginal cost is different."

Li Jinyong told NetEase Technology "Energy Field" that scale effects will determine the direct life and death of future car companies. For brands that sell less than 10,000 cars a year, it is actually a matter of dying sooner or later. There is no national subsidy to withdraw, there is no Tesla price reduction, this kind of brands are doomed to have no future.

An intuitive example took place in the last century: after the creation of the assembly line production method, Ford's annual production rapidly broke through from 10, 000 to 100000 +. Other cars can easily sell for two or three thousand dollars, while Ford sells for only 850 dollars, but it can still make a high profit. By 1927, Ford's Model T sold for as little as $290, and Ford had a nearly 50% market share in the United States.

"whether it is a battery or a streetcar, scale reduction is also a very important direction. so when the technology and scale can reach the inflection point, in fact, the product has economy." Mou Ying said.

"after more than ten years of development, new energy vehicles have given birth to a number of mainframe factories with strong R & D capabilities, mature product supply chain and colorful product lines, such as BYD and Tesla." In Zhang Hong's view, the decline of state subsidies is only a secondary factor in this impact. Over the past 13 years, small and medium-sized car enterprises and even some new power car manufacturing enterprises, because the product supply chain is too dependent on socialization, once they encounter the plight of skyrocketing raw material prices, chip shortages, and parts in short supply, it will show the problem of weak anti-attack ability. When R & D, vehicle delivery and marketing capabilities are not highly competitive, it will become more difficult to find financing for blood transfusions: "even if nature comes from winter to spring, their days will continue to face the test of severe winter."

Weaning, followed by the closure of the door, and then want to enter the new power of car-building will be very difficult to get tickets. The follow-up competition is likely to be a struggle between stock subjects.

"the stage of barbaric growth should be over."

A former employee of ideal car and now an industry veteran who is starting an independent business told NetEase Technology "Energy Field" that from last year to now, he and several partners planned to start building cars. but the issue of qualification has become an "obstacle in the way": "whether it is the earliest contract manufacturing model like Weilai, or the acquisition model, approval is now very difficult, and the country is gradually tightening."

In 2023, it will no longer be easy for new entrants. Li Yinan, formerly known as Ren Zhengfei's successor, ended up building a car, but the libertarian he founded was unrewarded for several years, failing to deliver one and ended hastily. On the other hand, qualification has become a problem for new entrants.

And from any point of view, a continuous farewell is inevitable for the remaining players. "75 brands have fallen in the past three years, and it is estimated that another 60% or 70% of the brands will face closure and merger in three to five years' time. We can expect that the competition in the future will still be very fierce, but the fallen brands will leave more market space and give the living brands more room to develop." In January 2023, Zhu Huarong, chairman of Changan Automobile, said so.

NetEase Technology "Energy Field" after comparing the latest quarterly results of Tesla and Toyota, it was found that Tesla's gross profit margin was already eight times that of Toyota. While Tesla made a profit of nearly 70,000 yuan selling a car before the price reduction, he also had a profit margin of 30,000 yuan even after the price reduction. However, Weilai, Xiaopeng and ideal are in a state of losing money on car sales, losing 100000, 80,000 and 60,000 respectively in the third quarter of 2022.

"for the current 100,000 and 200,000 years of sales of models, the opportunity is still there." Li Jinyong said that medium-sized car companies dare to follow Tesla to cut prices, dare to reduce costs in the future, and seize the market, it has reached a critical moment to test the strategic decisions of business leaders: "if you say now that I cannot afford to reduce, if you lose money, you will not fall."

On the other hand, Li Jinyong said that at a time when consumers have expectations of price cuts, car companies must reverse their thinking and make market-oriented pricing rather than cost pricing: "if you can't, don't participate, or you will be the Nokia of the future." there must be elimination in the future, and not all car companies will be able to wait five years or 10 years. "

Welcome to subscribe "Shulou Technology Information " to get latest news, interesting things and hot topics in the IT industry, and controls the hottest and latest Internet news, technology news and IT industry trends.