Tencent Technology News, April 15 news, according to foreign media reports, under normal circumstances, iPhone OEMs, e-commerce platforms and real estate developers will never compete in the same field, but China's electric car industry is an exception.
This is due to the huge shift in electric vehicles that is driving traditional automakers, start-ups, and Internet, electronics and real estate giants to spend billions of dollars. Although the Chinese government is cutting related subsidies, the stock boom continues.
At present, there are 486 electric vehicle manufacturers registered in China, which has tripled in two years. Although sales of passenger electric vehicles are expected to reach a record 1.6 million units this year, this may not be enough to keep all assembly lines running, triggering a warning that the expanding electric vehicle market may collapse, leaving only a few survivors. .
Roland · Thomas · Thomas Fang, a partner and strategic consultant at Berger International Management Consulting in Shanghai, said: “We will see a huge wave wash away the sand in the electric car industry, which is the decision to start a new electric car. The key moment for the survival of the enterprise. ”
Starting this week, at least 20 Chinese electric car brands will showcase new models at the Shanghai Auto Show, including the emerging sports car manufacturer's future car company, the US-listed startup Weilai, and the established automaker BYD.
According to data compiled by Bloomberg New Energy Finance (BNEF), in recent years, dozens of Chinese startups have entered the global electric vehicle field. Since 2011, they have raised $18 billion in funding. Most of the largest fundraisers are Chinese electric vehicle manufacturers, including Weilai Company, Xiaopeng Automobile Company, Weimar Automobile Company and Ranger Motor Company.
These start-ups promise to provide an overall manufacturing capacity of 3.9 million vehicles a year, which does not include plans from other of the world's largest automakers.
China's market is large, but there is no limit. According to data from Bloomberg New Energy Finance, the annual sales of passenger electric vehicles exceeded 1 million for the first time last year, which was driven by subsidies that could reduce the price of cars by thousands of dollars. However, according to data released by the China Association of Automobile Manufacturers, these electric vehicles accounted for only 4% of the total sales of 23.7 million passenger cars.
At the same time, China's electric vehicle industry faces many challenges. First, traditional car sales have also plummeted due to other factors dragging down consumer confidence. In March, it has fallen sharply for the 10th consecutive month.
Cui Dongshu, secretary-general of the China Passenger Car Association, said: “Because China's car penetration rate is relatively low, the new energy vehicle market still has huge room for development. However, the competition in this market is very intense and the weak will be squeezed out of the market. ”
The Chinese government has begun to promote the development of electric vehicles to help eliminate air pollution, reduce oil imports, and develop high-tech manufacturing. By 2025, China hopes that the annual sales of new energy vehicles (including pure battery electric vehicles, plug-in hybrid vehicles and fuel cell vehicles) will reach 7 million units, which is equivalent to 20% of the total Chinese automobile market.
Even this number is not enough to support the capacity of dozens of companies, not to mention hundreds of companies. In these companies, each company usually needs to produce at least tens of thousands of cars a year to ensure profitability.
Second, the Chinese Ministry of Finance announced last month that it would cut subsidies, a move designed to encourage manufacturers to rely on innovation rather than aid to scale up. Some subsidies amount to $7,500 per vehicle and have been halved.
Zhou Lei, a partner of Deloitte Consulting in Tokyo, said: “With the adjustment of subsidies, some of the less advanced electric vehicle start-ups will disappear. This also represents a reshuffle in this industry. ”
Third, competition from global electric car giants such as Tesla, Volkswagen, and Ford, all of which plan to invest in electric vehicles produced in China.
Among them, Elon · Els Musk's Tesla began to sell its first Volkswagen model in China this year, and plans to start producing cars in Shanghai before the end of the year. According to data from the Ministry of Industry and Information Technology, Tesla sold 14,467 vehicles in China last year.
Toyota Motor Corporation, Fiat-Chrysler Automobile Company, Honda Motor Corporation and Mitsubishi Motors Corporation have chosen a faster way. They all plan to sell basically the same electric vehicles developed by Guangzhou Automobile Group.
Old-fashioned local manufacturers such as BYD may be able to withstand the impact of competition and subsidy cuts as they have a multi-year track record, diversified products including cars and buses, and a fixed customer base.
According to data compiled by Bloomberg, BYD, backed by renowned investor Warren Buffett, has achieved revenue growth for six consecutive years and has achieved profitability since at least 2000. Wang Chuanfu, founder and chairman of BYD, said: “Only companies with strong technical reserves can stand out from the competition. With core technology, we can see a far-reaching future. ”
The biggest risks facing China's electric vehicle sector are those who are still looking for a foothold. Roland · Thomas of Berger International Management Consulting said that many car manufacturers are created or funded by people with backgrounds in the Internet or technology industry. They are used to mass burning, but they are not always fully aware of the need to build cars. Huge investment.
Non-automotive companies that have invested heavily in electric vehicles include Foxconn, Alibaba and the real estate company Evergrande. Evergrande has announced that the company will become the world's largest electric vehicle manufacturer within three to five years.
Thomas commented on this: “The actual production requires a few times the amount of money they invest in marketing and production development, which is why we see some people delay the mass production plan. ”
The California-based Faraday Future has not yet begun production of its first model. Former BMW's manager, Biden, said last month that after raising $500 million in funding earlier this year, the company is seeking $700 million in support to start production later this year.
Li Xiang, founder and CEO of the car and home brand, said that start-ups need to get funding within next year, otherwise there is a risk of being eliminated. After that, no investor will invest in new competitors, and even leading start-ups will find it difficult to make a profit.
Li Xiang was one of the first people to own the Tesla Model S in China. After successfully launching a car home in the United States with a market value of more than $12 billion, Li wanted to start his own company in Beijing.
After recruiting a large number of talents from Daimler, Toyota and BMW, the car and home plans to start delivering their products in the fourth quarter. Li Xiang said: “A large number of companies will be eliminated within a year, and 90% of investors will suffer huge losses. ”