Behind the bustling scene of independent new energy vehicles: competition with the joint venture has not really started yet.

Behind the bustling scene of independent new energy vehicles: competition with the joint venture has not really started yet.

Author: Wu Ziye

According to the data released by the China Automobile Industry Association, the production and sales of new energy vehicles in China completed 607,000 and 610,000 respectively from January to August this year, up 75.4% and 88% respectively from the same period last year.

The new energy vehicle is an opportunity for its own brand to overtake corners.

At present, China's new energy vehicle market is becoming more and more lively. Recently, the new power of automobile industry has come to the automobile and FAW Group's new energy of Beiqi listed one after another, hoping to speed up the advance with the help of the capital market.

Despite the cooling of the traditional fuel vehicle market, the new energy vehicle market has maintained steady growth under the stimulation of multiple policies. China has become the world's largest market for new energy vehicles. Domestic sales of new energy vehicles account for half of the world's total. According to the data released by the China Automobile Industry Association, the production and sales of new energy vehicles in China completed 607,000 and 610,000 respectively from January to August this year, up 75.4% and 88% respectively from the same period last year. What's more, the current market structure is distinctly different from the traditional fuel vehicle market, with the top ten sales being dominated by a single independent brand.

However, behind the bustling scene, it may not be so optimistic.

"Recently, two new energy automotive companies listed, but does not mean that new energy vehicles have entered a new stage of development, this and product power can not be equated. Especially for the automobile industry, many are in the momentum, such as a conference price as high as tens of millions. In fact, this is to abandon the bottom line, and the motivation for listing does not rule out the mentality of money circle, or the needs of investors. From the point of view of product strength, these enterprises are still far away from the requirements of good products. Zeng Zhiling, general manager of LMC Automobile Market Consulting (Shanghai) Co., Ltd, told the first financial reporter recently.

When will new energy vehicle enterprises really make profits? This has attracted much attention.

Ulaev's cumulative loss reached 10.92 billion yuan, while Beiqi's new energy has been profitable since 2016, but this is mainly due to the role of government subsidies, with subsidies declining sharply, it is still uncertain whether it can really make money. Because of uncertain future, Wei Lai automobile and Beiqi new energy have ups and downs in capital market. Weilai's share price rose first and then fell, while Beiqi's new energy, as Beiqi Blue Valley (600733.SH), closed at 9.50 yuan, or 36.88 percent, on the first day of its September 27 landing in A shares, with a market value increase of 18.648 billion yuan. However, Beiqi Blue Valley rose 3.35 percent on the second day and closed at 10.80 yuan on the third trading day (October 8).

"If the capital market continues to be bullish, listing will give these enterprises the opportunity to develop, more money can be used to develop better products, which also gives independent brands the opportunity to enhance competitiveness." Ceng Zhiling said.

The real contest is not yet started.

At present, from the perspective of the overall environment, multiple policies support the development of new energy vehicles, including vehicle and ship tax exemption, purchase tax exemption, vehicle subsidies and 5% more than the proportion of loans to fuel vehicles, "double points" drive is also one of the main factors for the rapid development of new energy vehicles in the next few years.

Many autonomous vehicle companies are speeding up strategic adjustment and taking new energy vehicles as an important sector. After years of hard work, BYD's sales of new energy vehicles have been the world's largest for three consecutive years, and since July this year has exceeded its sales of fuel vehicles for two consecutive months. Beiqi and Chang'an are accelerating their new energy strategy. Xu Heyi, chairman of Beiqi Group, said recently at the 60th anniversary celebration of Beiqi that the goal of energy utilization should be achieved by 2020 in an all-round way in order to turn new energy into the direction of enhancing independent innovation and deepening open cooperation in an all-round way. Changan announced the complete ban on fuel vehicles in 2025 and will invest 100 billion in the new energy sector in the future. Geely also launched the Blue Geely Initiative, which plans to have 90% of Geely's cars as new energy vehicles by 2020. Great Wall vehicles, which are late in the new energy sector, have also accelerated significantly this year, launching the new energy vehicle brand Euler. By 2025, the Great Wall will launch a total of 12 products, including pure electric vehicles, plug-in hybrid vehicles and fuel cell vehicles.

Due to the influence of double integrals and other policies, joint ventures have begun to accelerate the layout of new energy vehicles. Starting from Xuanyi Pure Power, which was launched shortly before Dongfeng Nissan, plans to introduce Nissan technology in the next three years and strive to achieve 100% localization of the core components of the electronics within three years. The introduction of new energy vehicles with the prototype GS4PHEV by CAIC Mitsubishi and CAIC Toyota is also a new approach to the new energy market. In addition, Chang'an Ford, SAIC GM Buick and other joint venture brands have also launched their own new energy models.

However, compared with the independent brand, the joint venture brand is still less motivated to promote new energy vehicles as a whole.

"At present, foreign auto companies have not really effectively promote new energy vehicles, but it does not mean that they are not technically competent, we still have a technical gap with them. Joint venture brand planning is basically in 2020 after a large-scale introduction, which is also based on the stability of the policy to make a decision, hope that the dust settled after the planning. Cui Dongshu, Secretary General of the information conference of the national passenger car market, told reporters.

In Zeng Zhiling's view, the volume of China's new energy vehicles is mainly subsidies policy-oriented, the product layout of enterprises is also around the policy. "There's no business logic, companies just focus on short-term benefits for product development, most of which are products that meet the lowest standards. In June this year, the new subsidy policy was formally implemented, and some low-mileage vehicles were quickly eliminated, which also led to the decline in June and July compared with the new energy vehicles. Ceng Zhiling said that some enterprises even set up their own car rental companies to sell their own products for subsidies.

At this stage, self-owned brand of new energy vehicles mainly focus on low-end products, the traditional Chinese automotive enterprises to build electric vehicles are basically traditional fuel vehicles. "Our product output is large, but the ability to understand and re-innovate the system of automotive production is not strong. We can refit electric cars, but it is difficult to achieve a new production system for electric cars, so the gap between many of our enterprises and Tesla is enormous. Cui Dongshu said that the concept of the U.S. Tesla luxury car is fully recognized by the U.S. industry, while China's independent high-end electric car is not recognized enough.

However, some independent companies have also chosen to redevelop platforms for electric vehicles, such as Great Wall's Eurasian brand. "New development platform to do new energy vehicles is relatively high cost, the brand independent development of new energy also shows the Great Wall to do new energy vehicles determination, which is a great investment. However, the risk of developing a new platform for new energy vehicles is relatively high, because sales of new energy vehicles are limited after all. How to distribute costs is a problem that the Great Wall needs to solve in the future. It's certainly good to be developing products, but that doesn't mean that the new platform must be competitive. For example, the platform BYD and Daimler are working together to produce products that don't sell well. Ceng Zhiling analysis.

Commercial bottleneck

In the backdrop of subsidise, some companies have already begun to slide in profits. "From the perspective of the industry as a whole, the commercialization of new energy vehicles is still worrying, mainly limited in scale, the prospects depend on the promotion of the two-point policy." Zeng Zhiling said that the current better way is to subsidize electric vehicles with the profits of fuel vehicles, for these independent development of new energy vehicles enterprises, because there is no support for fuel vehicles, the competition is more cruel.

In Cui Dongshu's view, in the future competition, whether the automobile manufacturer can grasp more upstream superior resources is the key factor. The main reason is that the upstream costs are too high, and the cost of batteries and raw materials is relatively high. These upstream enterprises are also using subsidies to speculate, the state should take measures to curb such behavior, effective supervision.

"Some large groups of enterprises, especially multinational car companies, such as Volkswagen, Toyota, large-scale production and marketing, purchasing bargaining ability is relatively strong, so it is easy to reduce costs." Zeng Zhiling said Toyota is using the scale of tens of millions of hybrid vehicles worldwide to launch hybrid products at the same price as traditional vehicles. Although China's overall electric vehicle market is large, but sales are too scattered, car companies and single products are difficult to scale. In addition, due to the lack of high-quality battery capacity, small enterprises can only be controlled by others. Only the car companies can take advantage of the huge sales volume to control suppliers and prices. At present, independent brands are hard to achieve. When the joint venture entered the new energy vehicle market in 2020, the real competition began.

At present, the cost of electric vehicles is still high, BMW and other multinational car companies have begun to build their own batteries in China in order to reduce costs, to some extent, to follow Tesla's practice. In 2014, Tesla began building a U.S. super-battery plant, which is expected to be built in 2018 on a scale of 35 GWh. Because of scale efficiency and cost savings, Tesla expects to reduce battery costs by 30% in the future. If there is no battery factory built by the company, once the battery supplier is out of stock, it will affect the pace of production of new energy vehicles.

Xu Changming, deputy director of the National Information Center, believes that after 2025, new energy vehicles will show a relative advantage over traditional vehicles, with an estimated 1.8 million vehicles by 2020. "In 2021~2025, we judged that there might be short-term fluctuations and then steady development. In the future, license concessions will continue, and direct allocation of resources in specific areas will continue, and may be even more intensive.

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