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

Recently, the news that Xiaomi has confirmed the development of new energy vehicles has aroused heated discussion in the media. On October 13, Chebai found on Xiaomi's recruitment website that Xiaomi had released the position of design and development engineer for extended-range systems.

Screenshot in the Xiaomi recruitment official website add program, has been ridiculed by some bosses, that its "backward technology, is already a consensus in the industry", advocating that the add program is "nonsense."

It is undeniable that in the new energy vehicle industry, pure electricity technology is the mainstream technology route. Why should Xiaomi cars, which have not yet launched a new car and focus on the future market of new energy vehicles, backtrack and add the research and development of code-added technology?

A simple answer is that add-on electric cars are "really profitable".

Take the ideal car as an example. Ideal is to add the technical route of the representative car companies, currently sold models are the use of add-on electric vehicles. Ideal ranks first in the ranking of new car-building power sales in the first half of 2023. More crucially, ideal has made profits for three consecutive quarters, and it is the third new energy vehicle company to be able to maintain quarterly profits after BYD and Tesla.

Rough statistics, in the new energy car companies, from building cars to profitability, BYD used nearly 20 years, Tesla used about 18 years, but ideal only used 7 years. The ideal profit, in a sense, has a lot to do with the low-cost characteristics of the incremental route. The ideal gross profit margin for the second quarter has steadily reached 21.8%, which has exceeded Tesla's 18.2%.

At present, the new energy vehicle market has entered the reshuffle period, and the big guys predict that after the crazy "inner volume", only 3-5 car companies will be left on the market in the future. To this end, Lei Jun is very anxious, at the end of 2022, "Lei Jun said Xiaomi into the top five trams can be successful" topic on the hot search. How to become the top five? the road of "building cars at a loss" is no longer feasible. Therefore, it is not difficult to understand that Xiaomi set its sights on the "very profitable" add-on technology route.

With regard to the positioning and future of the add-on technology route, at the 12th China Automobile Forum at the end of 2022, Zhang Yongwei, vice chairman and secretary-general of the China Electric vehicle Association, has publicly stated that the add-on route is a unique route in China and originates from the market. it is a technical route driven by consumer demand, and it has rapidly become an effective supplement to the development of pure electricity route, and the future development is worthy of market attention.

This article attempts to answer the following questions around the technical route of the add-on program:

1. What are the characteristics of the add-on technical route?

2. What is the evaluation of the added program route in the industry?

3. What is the future of the add-on route?

4. Can the add-on route be the boost for Xiaomi to enter the top five in the future?

1. The national standard (GB / T 19596-2017 "Electric vehicle terminology") has an authoritative description of the definition of add-on electric vehicle.

Incremental Electric vehicle (Range Extended Electric Vehicle) is a kind of electric vehicle that can achieve all its power performance in pure electric mode, and when the vehicle rechargeable energy storage system can not meet the mileage requirements, turn on the vehicle auxiliary power supply device to provide power for the power system to extend the mileage, and the vehicle auxiliary power supply device is not connected with the drive system such as transmission shaft (belt).

To put it simply, the add-on electric vehicle is a series plug-in hybrid vehicle, in which the engine does not participate in the power supply, and its function is limited to drive the generator to generate electricity when the power system needs. Therefore, in terms of the essential driving experience, the add-on electric vehicle is an electric vehicle, but after the power loss, the engine starts to work.

The incremental technology route is not the latest invention. it has a history of 70 or 80 years, and can be traced back to the power system designed by Ferdinand Porsche for the Tiger P tank during World War II. Today, the popularity of add-on technology is also due to the re-use of Chinese car companies.

The ideal car is an important promoter of the hot technology route again. Ideal car founder Li Xiang comes from the Internet industry, has his own user thinking, and pays close attention to the user experience. At the beginning of its business, the mileage anxiety of electric vehicles was very serious. in order to alleviate users' mileage anxiety, Li Xiang thought of the incremental route, and ideal Automobile launched the "Electric vehicle without mileage anxiety"-ideal ONE.

The ideal ONE is to rely on the internal installation of an engine that can be used to generate electricity, that is, an augmented range, to help users drive the vehicle through pure electricity and refueling during long-distance driving, so as to eliminate energy anxiety. Until 2022, Yu Chengdong of Huawei also said that Zengji is the most suitable new energy vehicle model at present, and the basis of this argument also comes from energy anxiety.

Screenshot Yu Chengdong Weibo compared to Wei brand Li Ruifeng's evaluation of the added program route-"the technology is backward, is already the consensus of the industry", advocating that the added program is "nonsense"; Yu Chengdong denied that the added program is a backward route. He thinks that add-on electric vehicles "take off the extended-range engine, in fact, it is a pure electric car." Li Xiang even thinks that extended-range electric is a backward technology and the "nonsense" of a group of technicians who have no user thinking and do not care about users at all.

2. Low cost. From a certain point of view, there is also a reason for determining that the technical route of the add-on program is backward. Because to solve the mileage anxiety and achieve the goal of "using electricity and long-distance oil at ordinary times", there is actually another technical route, that is, the hybrid technical route.

Hybrid hybrid electric vehicle (HEV) is a new energy vehicle which connects engine and motor through mechanical connection with advanced control technology. Because the two power sources can be driven separately or jointly according to different working modes, the new energy vehicle is produced by combining the advantages of traditional internal combustion engine vehicle and pure electric vehicle.

Compared with the series hybrid electric vehicle, the hybrid hybrid electric vehicle has two sets of drive systems: engine and motor. They can work separately, coordinate and drive together, and they can also use the engine to drive the engine to generate electricity, just like the add-on route.

This technical route is widely used, which not only solves the mileage anxiety, but also can be used in more complex working conditions. However, its biggest disadvantage is that the cost is too high, because unlike the add-on technology route, it only adds the engine to the motor, but a set of engine drive system on the basis of the motor. a series of tedious structures such as gearbox need to be installed.

Therefore, from an economic point of view, at present, many car companies choose the added program technology route, and benefit a lot. Ideal car is precisely because of the choice of add-on technology route and other reasons, compared with Wei Xiaoli other car companies that choose pure electricity route, has taken the lead to make a profit.

In the second quarter of 2023, the gross profit margin of ideal car reached 21.8%, higher than BYD, Tesla and other car companies. This also makes ideal Automobile has made a profit for three consecutive quarters, and it is the third new energy vehicle company to be able to make a quarterly profit after BYD and Tesla.

So, does the add-on electric vehicle have any disadvantages?

The answer is yes. After the add-on electric car goes into a state of power loss, the fuel consumption increases in a straight line, and the owners of some add-on electric vehicles also frequently complain about high fuel consumption at high speed. The main reason is that under the series structure of the increment program, the engine can not directly drive the vehicle, so it is necessary to convert gasoline into mechanical energy in the engine, and then convert mechanical energy into electrical energy through the generator, which is eventually converted into mechanical energy by the driving motor. If the energy is converted many times, the loss will naturally be "discounted".

However, this disadvantage is not the focus of attention for car buyers.

3. High sales at present, car buyers are more likely to drive in urban areas and seldom travel long distances. The pure electric drive of the add-on electric vehicle can meet its travel needs. Moreover, because of its low cost in other areas, add-on electric vehicles can invest more on batteries to produce models with longer battery life.

For example, the price of the zero-run C11 extended-range version is only 15.98-200000 yuan, and a hybrid model with a similar price is the Biadizon PLUS DM-i. In terms of mileage, Song PLUS-DM-i 's highest electric range is only 110km, while the pure electric range of zero running reaches that of 285km, far exceeding BYD's models.

In short, the add-on route model, not only has a cost-effective, but also can alleviate long-distance driving energy anxiety, although high fuel consumption, but for most users, long-distance travel is occasional, so rarely experience this disadvantage. Ouyang Minggao, vice chairman of the China Electric vehicle Association and academician of the Chinese Academy of Sciences, said at the expert media exchange meeting of the China Electric vehicle Association Forum (2023) held in February 2023: "if Zengji electric runs over long distances, it's not a problem to have high fuel consumption once in a while."

Moreover, according to the news of the recent "Seminar on the Future of Hybrid passenger vehicles" held by the China Electric vehicle Association, many people in the industry have suggested that various ways should be adopted to improve the energy consumption management of incremental technology routes. better guide car companies to do more fuel-saving measures.

Therefore, the seminar site is very cost-effective, can alleviate mileage anxiety, and the incremental electric vehicle developed based on user thinking is very popular. According to the terminal data of the Global Automotive Research Institute, from January to August this year, the sales of passenger cars in China reached 314000, an increase of 159.08 percent over the same period last year, far higher than the double-digit growth rate of pure trams. The added program route represents the high sales performance of the ideal car of the car company, and clearly proves this point.

In 2022, the new power of car building ranked among the top five in terms of sales, ideally ranking second. Second only to the main low-cost Nahu car, in the first place in Wei Xiaoli.

Picture source: ideal car sales ranking of car companies in the first half of 2023, ideal has risen to the first place of new power, surpassing Nahan car.

At present, the industry also holds a positive attitude towards add-on electric vehicles. Recently, Ouyang Minggao classified the plug-in, including extended range, as one of the six technological breakthroughs of China's new energy vehicles in the lecture of "Economic Lecture Hall".

At the 12th China Automobile Forum at the end of 2022, Zhang Yongwei, vice chairman and secretary-general of the China Electric vehicle Association, also said that the incremental route is a unique route in China, which originates from the market and is a technical route driven by consumer demand. and quickly become an effective supplement to the development of pure electricity.

According to the news from the "Seminar on the Development Prospect of Hybrid Electric vehicles", the hot discussion of "add-on is backward technology" mainly appeared during the period from 2022 to early 2023, and now it has calmed down, and the industry has accepted the route of add-on technology. the market for add-on electric vehicles is also becoming mature. Moreover, in October, seven departments jointly issued the work Plan for steady growth of the Automobile Industry for 2023-2024, which clearly stated that it was necessary to "encourage the development of hybrid and low-carbon fuel technologies".

4. What is the future?

Zhang Yongwei said that the future development of the add-on technology route deserves the attention of the market, and it is expected that in the next 10-20 years, there is still a good room for the development of the two technology routes. Ouyang Minggao said at the China Electric vehicle 100 Forum held in April that the proportion of plug-in (including extended range electric) in new energy vehicles will increase in May and 10 years, and is expected to increase from 22% in 2022 to 30% and 40% in 2022.

It is not difficult to understand that Xiaomi is ready to add electric cars at this time.

At present, the volume of the new energy vehicle market is very serious, entered the knockout stage, and began to "reshuffle". Previously, most of the bosses thought that the new energy car companies could only survive 3-5 after the "reshuffle". Lei Jun is soberly aware of this, and his goal is to become one of the top five new energy car companies in the future, that is, to ensure that Xiaomi cars can survive. The low-cost and high-margin characteristics of the incremental route are undoubtedly suitable for Xiaomi cars.

However, Xiaomi has been taking the pure electric line before, and the first car has not yet been built, and the layout of the incremental route has begun again. Although it has been interpreted by the media as "it is safer to walk on two legs", it also gives the industry an impression of "not focusing".

At the 14th China Automobile Blue Book Forum held in July 2022, he Xiaopeng explained the idea behind Xiaopeng's focus on pure electricity-as a new company, less is more, slow is fast. Previously, it had been focused on the ideal of adding programs, and it was only in the seventh year of its establishment that it began to produce pure electric models. At the ideal 2023 Q2 earnings report meeting, Li would like to confirm that ideal MEGA, the first 5C pure electric super flagship model of ideal car, will be released at the end of the year.

However, with regard to the future of new energy vehicles, Zhang Yongwei said from a higher dimension that the focus of competition between automobile products and enterprises does not depend on the power system and technical route, but more on the second half of the automobile industry, that is, the stage of intelligent development on top of electrification, which is the core of future competition.

"which technological route is deeply combined with intelligence, which is widely combined, and which is integrated early will be better involved in intelligence, so intelligence will become a core that determines the future competition of the industry in the future. it will also determine the future fate of different technological routes."

Thus it can be seen that pure electricity or incremental technology does not determine the future of Xiaomi cars; the degree of intelligence is an important perspective for us to observe and predict the future development of Xiaomi cars.

[full text reference]

[1] "ideal hot sales prompt Xiaomi Automobile to plan to produce additional models", Xiaoxiang Morning Post

[2] "stabilizing the mixed route of the traditional fuel vehicle market may be the direction", Nanfang Daily

[3] "Lei Jun makes cars more passive", Wall Street

[4] Li Xiang "foul language" strongly supports the electric car with added programs. who is more advanced than pure electricity? ", New car Records

This article comes from the official account of Wechat: che Bai think Tank (ID:EV100_Plus). Author: Chen Zhongshan.

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