The first half of the “wild”, the second half of the “domination”: the endgame speculation of the new car-making

The capital market is very mature, and companies must rely on their absolute strength to survive.

Throughout the first half of 2021, we can see two very different emotions from the new energy vehicle market.

On April 19, the first day of the Shanghai Auto Show media day, the photo of Ms. Zhang in Henan wearing a T-shirt with the word “brake failure” and being dragged outside the venue by Tesla employees ignited the anger of the entire Internet, questioning the product and the industry; however, the bigger flame is that Xiaomi, Huawei and Baidu are righteously running to the new car-making field. The market is not short of latecomers.

Strong as Tesla, still so pull crotch, the new car game is necessary to continue to play? It is really necessary.

According to the State Council’s “New Energy Vehicle Industry Development Plan (2021-2035)”, China’s new energy vehicles will account for 20% in 2025, or about 5 million vehicles; and Deloitte’s strategic report on China’s new energy vehicle industry believes that China’s new energy vehicle production and sales will reach 17 million units in 2030, becoming the world’s central market.

At the same time, in the domestic sound road network environment, rich supporting services, and mature communication network scenario, the future of travel will usher in a huge change. No matter the accumulation of quantitative changes or the sublimation of qualitative changes, this will bring more opportunities to enterprises.

From Tesla’s enlightenment of the industry, to the rise of Weilai, Xiaopeng, ideal, to the cross-border development of Huawei, Evergrande, Gree and other giants, an “external and internal”, forcing the bottom logic of the auto manufacturing industry to change the power of the industry has penetrated all aspects. They attract funds, traffic and talents to enter and generate chemical reactions, which we are entitled to call the “first half” of the new car-making movement.

Right now, the curtain of the “second half” of the new car movement is being unveiled: the century-old auto industry needs to undergo an “inside-out” renewal, forming a new industrial synergy with technologies in different fields such as electrification, networking and intelligence. Many car companies have allied with Huawei, Baidu, Shang Tang, KDDI, Tencent, Ali, Nvidia, Luminar and other technology companies, and the direction is here.

The first half of the line nears the end, the second half slowly open, the booming new car movement, will eventually let the intelligent car to where? After the big wave, which car companies will have the last laugh? The story becomes more and more interesting.

The first half of the fielding
“My main purpose of buying P85 is more to fully experience and understand a best electric car, and I can follow the trend when electric car becomes a trend sometime in the future.”

Elon Musk delivers the keys to the first batch of Tesla Model S owners on April 22, 2014. After some experience, Li wants to release the feeling of using it as above.

His identity is very special: he loves cars is his label, he was also the president of AutoZone at that time, and as an “experience officer”, he has tried many domestic and foreign latest models, and Model S is naturally the prey. He had a lot of experience, but this was the first time he drove a new energy car.

In a sense, he is observing and thinking about the concept of new energy vehicles with the eyes and brain of a mature car company.

What’s different about the new car? Not much on the Model S. In addition to cheap accessories, poor manufacturing process, and crappy comfort …… only a large 17-inch display screen remains.

But it is this screen that has become the window to the new car-making era – the underlying development of the three electric (battery, motor, electric control) system power supply, modular functional components to access services, and then the AutoPilot platform networking to support driverlessness, all the values are integrated in this one screen.

The first half of the "wild", the second half of the "domination": the endgame speculation of the new car-making

On the surface, Tesla is driving on the real road, but changing the function mode, no different from other vehicles; in essence, it is a running information terminal, generating massive data with wheel rotation and human-machine interaction. The added value of future transportation is being presented in a new form, and the underlying logic of car-making is being reconfigured.

With a new car framework and technology orientation, some functions that could not be imagined in the past can be realized: the car can be used as a service carrier to provide many services such as life, office and driving with the help of communication network; it can also be pre-installed with a platform to dock with the concept of interconnected transportation in advance, which can expand the imagination infinitely.

In the country, Li Bin, He Xiaopeng, Li want to become the practitioners of these ideas on the ground, known as the car “new forces”, from the beginning of 2018, gradually give their answers.

This is very much like a “points race”, each new force to focus on their own definition and exploration of intelligent cars, test the water for many applications and services, to guide the user to the car experience and use the scene demand reconstruction.

The cabin of a new energy car can be used as a user’s office, meeting room, or leisure space, just like a mobile phone that has moved from the 2G voice communication stage to the 3G and 4G data service development stage, with new application scenarios and new customer needs constantly being developed.

For this “points race”, the capital market has shown unprecedented generosity. Public data shows that in 2020, the new energy vehicle sector has invested a total of 89 cases, amounting to 129.11 billion yuan, exceeding 100 billion for the first time in the past decade; in 2021, there have been 13 investment and financing events involving Evergrande, Nezha, and even Faraday Future, the originator of the “PPT car”.

All parties are looking forward to seeing what these cross-border players can bring to the world.

Big or small, strong or weak, real or fake, it doesn’t matter, capital is wildly “playing the field”. There are dates without dates, playing three shots. In a hurry and with great enthusiasm, this is the tone of the new car-making era now.

The 9.4% penetration rate of new energy vehicles has not yet reached the inflection point (January-May 2021 data), the growth of new forces is not stable enough, but they have grabbed the first-mover advantage, strong body to change the development pattern of the automotive industry. Don’t believe me? Take a look at their market capitalization, which has surpassed that of mature car companies.

This is the “first half” of the new car manufacturing, overnight, the sky has turned over.

The second half of the hegemony
If the first half of the new car is the “points race”, then the second half of the competition will enter the “knockout” race.

It can be predicted that simply relying on software or hardware, product design or a single functional gimmick, is difficult to win the elimination race, must rely on comprehensive strength and balanced strength to pry the future market. In the era of digital car-making, it is necessary to be good at acquiring the user’s mind with the help of the new car-making concept and the Internet approach, and it is also necessary to obtain a high degree of synergy between the industry chain and the supply chain at the manufacturing end.

Both hands must be grasped and both hands must be hard, which is the condition to win the competition.

Looking back on this change, the story began in June 2019. Due to the continuous new car spontaneous combustion accidents, Azera decided to recall 4,803 problematic cars …… At one time, questions arose and the capital market was in disarray.

“If Tesla has problems, why should we believe in Azera, Xiaopeng, and Ideal?” Just a short time ago, the new forces were seen as the hope to change the future transportation scene, everyone’s face was written with confidence and determination; however, the successive product problems caused a clear negative impact on the whole industry, and the new car ushered in an unprecedented crisis of confidence.

This fate “Waterloo”, let the market more than ever realize that the power to change the future of the transportation scene, not PPT, nor loud slogans, not hard products – technology reserves, manufacturing level, supply chain synergy ability …… these rely on long-term accumulation of slowly shining value, is the prerequisite for industry progress.

The “PPT car” new power has disappeared, the lack of vehicle production capacity, can only rely on investment to barely support the car companies lose competitiveness. Talking about the new car, both the need to stabilize the “manufacturing” fundamental, but also to be able to “intellectual” upgrade, one without the other.

The car is not a group fight, there is no “power” is not important, there is “strength” is the key.

The future car is destined to become a common carrier of digital software and physical hardware, car companies must take the route of “both hands to grasp, both hands to hard”. As a representative of the “new strength”, R Auto, for example, relying on the manufacturing capabilities of SAIC Group (600104.SH), is able to launch products that integrate industry-leading technologies.

ES33 is based on SAIC’s “zero-beam Galaxy full-stack solution” and has a six-fold fused sensing system with all-weather, super-visual range and multi-dimensional sensing capability; MARVEL R is equipped with R Pilot 3.0 intelligent driving system, which is the first to implement 5G V2X function scenarios, with automatic straight and side-to-side parking time. The parking time is shorter than Tesla Model 3, Azera EC6 and Xiaopeng P7.

On the basis of manufacturing power, the “new power” faction has shown strong learning ability and adsorption, putting the label originally affixed to the “new power” – user-centered service users – on themselves.

In order to make it easier for users to experience the new features, R Auto is pushing to bring the products closer to users quickly, and has laid out 100 stores nationwide in less than a year (50 have been opened), and through the three-dimensional user service system of R Store Experience Center, R Delivery Center and R Station Service Center, the impression of users has been deepened.

These were once the killer applications of the “new power” to occupy the market, and now they have been brought into full play by the “new power”. With the rapid development of the market, users continue to mature, the industry clearly shows the “barrel effect”; so no short board “new strength”, more investment value than other targets.

Whether new power or new strength, can laugh to the end can not have a short board, simply rely on software or hardware, product design or a single functional gimmick is difficult to win, must rely on comprehensive strength and balanced strength to pry the future of the market.

Quietly, the first half of the “points race”, to the second half became the “elimination race”.

The “12 into 6” endgame speculation
This is only a few years, the market is still in the rapid metabolism, how to suddenly enter the second half, the beginning of the “elimination race”.

In fact, the reality is so cruel.

The arrival of the new era of car-making has accelerated the elimination of the best and the worst in the entire automotive industry. The whole industry has become a mess: the fuel car market is still the main force of sales, but car executives are discussing how to “live”; don’t look at the capital is still willing to blood for new car companies, because the weaning and disappearance of enterprises is the mainstream of the industry.

Throughout 2020, there are constantly car companies falling down: either new stars that have just been established and are financing the growth of the rising star; or old car companies that have been established for many years with a certain foundation and are ready to integrate user thinking. In the new era of car-making to survive, the difficulty is too great.

“Many big names come in to make cars, 5 billion is not money. For example, like Lei Jun, 1000 billion. But now there are not many companies with the advantage of making cars, Lei don’t lose money and waste time.” Not long ago held in Yabuli China Entrepreneurs Forum, BYD Chairman and President Wang Chuanfu will only so tease Lei Jun.

The first half of the "wild", the second half of the "domination": the endgame speculation of the new car-making

According to the viewpoint of Wang Xing, CEO of the United States, the pattern of Chinese car companies will be “3 + 3 + 3 + 3”: 3 central enterprises is FAW Dongfeng Chang’an, 3 local state-owned enterprises is SAIC Guangzhou Auto BAIC, 3 private enterprises is Geely Great Wall BYD, 3 new forces are ideal Azure Xiaopeng.

Although the final result is not clear, but it is certain that the future industry competition, will only become more and more intense. So there is no hope for the later? Not necessarily. In a limited time, the innovative technology into a quality user experience, and gain market recognition of the product, still have the opportunity to achieve a breakthrough.

At present, the two camps of “new power” and “new strength” of the head of the enterprise will continue to improve the concentration of the industry, the follow-up is bound to start a “fixed” market pattern of “12 into 6” elimination game. In this elimination game, the “new strength” has the potential to become the head.

As the representative of “new strength”, R car has successfully launched ER6 and MARVEL R two products. Up to now, the two products have implemented many innovative technologies such as 620KM super range, 200km charging in 15 minutes, 12.2kWh lowest 100km energy consumption in the same class, AI Pilot intelligent driving assistance system, and 5G technology and L3 level assisted driving, etc., which have been well received by users.

The first half of the "wild", the second half of the "domination": the endgame speculation of the new car-making

Huang Qing, the representative of R car, the owner of MARVEL R 5G version and the owner of “ES33” blind order, who works in journalism, once drove the new car from Shanghai to Tibet, and with the help of innovative technology, Huang Qing completed the journey smoothly and finally became the loyal user of R car. With the help of innovative technology, Huang Qing successfully completed the journey and eventually became a loyal user of R cars. “My personal experience has made me go from love to trust for the R brand.” Huang Qing said.

For the future, R Cars also has a forward-looking plan. Based on the concept of “data determines the experience and software defines the car”, the “R-TECH high energy intelligent body” is incubated. The whole car is equipped with “R-TECH high energy intelligent body”, which will have the characteristics of hardware that can be inserted, replaced and upgraded, software that can be bought, sold and defined, and battery that can be charged, replaced and upgraded.

R-TECH high energy wisdom body took 5 years to develop, with a total investment of over 20 billion yuan; the same as ER6 and MARVEL R, which is also not a bundle of ideas, the first model equipped with R-TECH high energy wisdom body ES33 will be available globally in the second half of 2022.

Both can launch mature products, down-to-earth occupation of the user’s mind; but also cutting-edge technology, looking up to the stars to fill the imagination. So it seems that the imagination space of “new strength” is not smaller than that of “new power”, and it is not impossible to complete the overtaking by waiting for the opportunity.

Looking back on Wang Chuanfu’s “warning”, in fact, is an opportunity.

It is because of the low penetration rate of new energy vehicles that users have more diversified demands, and the later has enough room for growth, so that the market can accommodate more ideas and thoughts to transform existing car products and provide more survival nutrients for more new car-making enterprises.

However, car companies must be aware that the threshold of the industry is rising rapidly, the capital market is very mature, and companies must rely on absolute strength to survive. The stronger the strength to laugh to the end, which will become the key to determine success or failure.

Posted by:CoinYuppie,Reprinted with attribution to:
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