After gaining a firm foothold in the 400,000 car market, BYD will attack the million-dollar luxury car market.

On January 5, BYD’s Yangwang brand released the new energy hardcore off-road U8 and the pure electric performance supercar U9, as well as the “Easy Square” technology platform behind it.

Similar to the past, Wang Chuanfu, chairman and president of BYD Co., Ltd., first appeared on the stage and introduced the vision and main functions of the brand. When Wang Chuanfu said that “ Chinese high-end brands are not just about buying and piling up materials, but should be based on super technology and provide users with subversive products and experiences “, many netizens were excited about this, “In other people’s Lay the foundation on the ceiling of the car”, “In the future, there will only be two types of electric vehicles: made in China, and others”.

Million-level pure electric performance supercar looks up to U9 | Source: BYD

This is not only a brand move by BYD, but also another attempt by China’s independent brands to improve. In the era of traditional fuel vehicles, if the budget exceeds 200,000, most consumers will choose joint venture brands. According to McKinsey data, the average starting price of Chinese brand passenger cars was only about 64,000 yuan 10 years ago, and today it has reached 107,000 yuan 10 years later.

During this period, China’s independent brands have made multiple rounds of attempts to make breakthroughs, but due to cultural accumulation, brand accumulation, core technology and other reasons, they have not been able to truly achieve it. Until the new car-making forces represented by Weilai, through the development of smart electric vehicles “change lanes and run first”, they successfully sold the cars for 400,000 to 500,000 yuan, realizing brand improvement and industrial upgrading. Subsequently, Gaohe Automobile even raised the price range of its own brand to 500,000 to 800,000 yuan.

I am used to BYD with hundreds of thousands of dollars on the road, and I saw it launch a million-level luxury car. Many people may wonder, what is BYD’s confidence in hitting the million-dollar market?

01 Electric vehicles play “tank U-turn”

At the opening of the press conference, BYD looked up at the U8 to enter the arena with a horizontal driving posture, and performed a “tank turn”, which was impressive. To put it simply, it is to take the center point of the car as the center of the circle, and the car turns around in place.

In fact, the “tank U-turn” function is not new in the automotive industry. In the era of fuel vehicles, many hardcore off-road models have similar functions, such as Toyota Land Cruiser, Lexus LX570, Haval H9, Tank 300, Great Wall Cannon, etc. It is mainly realized through the differential lock. The differential will completely lock one rear wheel on the inner side of the turn, and only provide traction to the remaining three tires, so as to achieve a U-turn like a tank.

In the era of electric vehicles, to complete the “tank U-turn”, differential locks are no longer needed, as long as the four wheels are independently controlled by the motor. In 2019, American car company Rivian was the first to put the electric car “Tank U-turn” on the table, but in 2021 it suddenly announced that the “Tank U-turn” function would be delayed; in May 2022, Mercedes-Benz EQG released a “Tank U-turn” video , like Rivian back then, caused quite a stir. At present, this car has not yet entered the mass production stage.

Yisifang four-motor platform independent drive architecture | Image source: BYD

BYD is the first domestic company to achieve a “tank U-turn” on electric vehicles. Behind this is the “Easy Sifang” technology highlighted in this press conference, especially the wheel-side drive and four-wheel independent electric drive control.

Among them, the four-wheel independent motor unit is the most concerned technology. Same as Rivian’s four-wheel independent motor solution, BYD also adopts the independent traditional shaft design, the difference is that BYD’s motor layout is more compact and more suitable for passenger cars.

Of course, the difficulty in realizing the “tank U-turn” on electric vehicles is not the arrangement of the drive motors, but the coordination of the four drive motors. Simply put, it is how to synchronize the driving state of the four wheels and output power correctly under different road conditions. Behind this is to find a suitable control strategy.

At present, because the vehicle has not yet been launched, it is unknown how this part of the function will be. Judging from the announced functions, BYD has high confidence in its own control strategy: with the inherent advantages of four-motor millisecond-level perception and control, it can instantaneously control the torque of other tires after a single tire blows out, helping the vehicle to drive stably and slow down. In addition, the four-wheel torque control also brings redundant braking and steering independent of brakes and steering gear.

As for the wheel motor technology, it is not a new technology. In fact, BYD has been cultivating for many years and has mature applications in commercial vehicles such as buses. But this is the first time that wheel motors have been used in passenger cars. Although the wheel motor has the advantages of direct power output, low transmission loss, and high motor output efficiency, the disadvantage is that it takes up a lot of space. If it is applied to a passenger car, certain changes and upgrades are required.

The second highlight of this press conference is to look up to the wading function of U8. Generally speaking, traditional models are also limited by the wading depth. For example, the Tesla Model 3 battery pack adopts a sealed design, and the maximum safe wading depth is about 138mm.

Looking up to the U8, through the four-way technology, the wading depth of the vehicle can be greatly improved. When the vehicle is in an emergency wading situation, with the help of the waterproof advantage of the overall structure and the four-wheel torque control, the “crab mode” will be automatically turned on after wading, and the emergency floating and escape function will be driven by the four-wheel motor.

In addition, BYD’s press conference also mentioned functions such as sand rushing, 120 kilometers per hour, and a stable body after a single wheel blows out.

Looking at the whole press conference, it is very in line with the impression of BYD’s “man of science and technology”, full of many technical details. In this regard, some netizens joked, “BYD will not develop a press conference at all.” With such an explosive technology, at least it has to say “far ahead.”

“Far ahead” is a hot meme. At the earliest, Yu Chengdong only mentioned the word “far ahead” 14 times at the Mate40 series launch conference in 2020. Later, “far ahead” also migrated from mobile phones to the automotive industry. In the release session of AITO Wenjie M5EV, Yu Chengdong once again mentioned “far ahead” 7 times when introducing the vehicle’s audio, car machine, NVH and other selling points.

02 The purpose is not for sales

This time BYD looked forward to releasing two new cars: the hardcore off-road U8 and the performance supercar U9, but did not announce the performance data, price and time to market of the vehicles.

On the whole, as a product positioning of million-level new energy, “Looking Up” is in a very niche market. Take the Mercedes-Benz G-Class and Mercedes-Benz G-Class AMG, the former benchmarks of the U8, as an example. In the first three quarters of 2022, the combined sales of the two cars in China will be less than 6,000.

Even for the relatively successful tank 300, the main market range is between 200,000 and 300,000 yuan, and the sales volume is only 100,000. In the first 11 months of 2022, the cumulative sales of Tank 300 will reach 93,000 units, a year-on-year increase of 9.7%.

On the other hand, due to the high R&D costs and small market volume of super luxury brands, many brands are in a state of loss. For example, Bugatti Veyron sold a total of 400 vehicles from 2005 to 2013, with a loss of more than 13.8 billion yuan; Aston Martin, the protagonist of the “007” movie, has been declared bankrupt seven times and lost 3.7 billion in 2020. In 2021, it will lose 1.5 billion.

Therefore, the well-known ultra-luxury brands generally belong to a large automobile group, such as Lamborghini, Porsche, and Bentley belong to the Volkswagen Group, Ferrari and Maserati belong to the Italian Fiat Group, and Rolls-Royce belongs to BMW.

From this, it is conjectured that BYD’s deployment in the million-dollar luxury car market is not for sales, but more about improving the brand image and using it as a test field for new technologies . Looking back at the history of the automotive industry, the latest technologies are first applied to high-end flagship models, and then distributed to mid-level and entry-level vehicles, such as car navigation, electric tailgate, LED headlights/laser headlights, HUD (Head-up Display, head-up display system).

In fact, BYD is not the first Chinese player to test the million-dollar market.

In 2019, with the help of Mercedes-Benz technology, Beijing Off-Road launched the BJ90 series with a price of one million yuan, but it uses the old Mercedes-Benz GL platform. The three core parts are exactly the same as the Mercedes-Benz GLS, and the market sales are limited; Hongqi The price of the L9 is as high as 5 million, but this is a special model, which is restricted to private sales; the price of the Weilai sports car EP9 reaches 1.4 million US dollars, but it has not been listed for sale. It is mainly given to Ma Huateng, Lei Jun, Li Bin, Li Investors who want to wait for NIO.

On the whole, most of these attempts are “thunder but little rain”. This is first of all due to technical factors. In the era of fuel vehicles, technologies such as twelve-cylinder engines and gearboxes have restricted independent brands. Although the BJ90 uses Mercedes-Benz engines, gearboxes and chassis, it is more regarded as a “shell replacement”. Mercedes-Benz GLS-Class”.

Entering the era of electric vehicles, the technical gap between self-owned brands and luxury brands has gradually narrowed, and they even have advantages in some areas, which also provides opportunities for self-owned brands.

At present, what China’s independent brands lack is no longer car-making technology, but there are still shortcomings in brand influence and cultural tension.

In November 2022, the American brand consulting company Interbrand announced the “2022 Top 100 Global Brands Ranking”, a total of 15 auto brands entered the top 100 brands list, and none of the Chinese auto brands made the list.

When entering the million-level ultra-luxury market, a car is no longer just a means of travel, but also includes a large number of additional factors such as brand, identity, and value recognition. For example, when it comes to Ferrari, you will think of “the boss of the supercar industry”, hand-made cars, and Italian quality and feelings, etc.; when you mention Porsche, you will think of the classic model 911, sports genes, and a small and independent attitude.

In contrast, self-owned brands have been opening up the market through cost performance for a long time. In the first twenty or thirty years of the development of the automobile market, there is really nothing wrong with this. But now, Chinese car companies have entered the stage of “accompanying” or even “leading” from “following” and need to “make up lessons” on brand and cultural precipitation. This will be the challenge that BYD will face.

03 Fast fish eat slow fish

If you briefly review the history of BYD, both it and Tesla entered the automotive industry in 2003. In early 2005, BYD’s first car, the F3, rolled off the assembly line. It took 13 years from the first to the millionth new energy vehicle; from 1 million to 2 million, BYD only took 1 year; from 2 million to 3 million, only half a year.

Among them, in April 2022, BYD will stop the production of fuel vehicles and focus on the business of pure electric and plug-in hybrid vehicles. The data shows that BYD’s cumulative sales in 2022 will be 1.864 million vehicles, a year-on-year increase of 209%, occupying the top spot in the global new energy market that year.

Wang Chuanfu, chairman and president of BYD Co., Ltd. | Source: BYD

Behind this is the era of electrification, and the ecological pattern and market logic of automobiles are being rewritten. Wang Chuanfu once said that the process of electrification is accelerating. At this time, it depends on who has more resources, a better supply chain, and a greater product advantage, and whoever can win a bigger market. Now it is not the big fish that eat the small fish, but the fast fish that eat the slow fish. Overtaking is only possible in the fast process.

At present, BYD’s strategy is to make a comprehensive attack on market segments. For BYD’s new energy vehicle sales in 2023, Soochow Securities is expected to exceed 3 million units, an increase of nearly 60% year-on-year in 2022.

It is understood that in addition to looking up, BYD will also launch a very professional and personalized new brand next year to meet the increasingly prominent individual needs of consumers. Previously, it was reported that BYD will launch a high-end new energy pickup brand priced between 300,000 and 800,000 yuan, named “Tide Brand”.

With the advent of the look-up brand and individual brand, BYD Group will form a new brand matrix of BYD brand, Tengshi brand, look-up brand, and professional and personalized brands . Among them, BYD Ocean.com mainly focuses on youth and aesthetics, and Dynasty.com mainly focuses on luxury and stability; Tengshi brand focuses on technology + luxury, which combines the luxury genes of Mercedes-Benz and BYD’s technology; Lookup focuses on the ultra-luxury market, and the new brand focuses on individual needs .

In addition, BYD is also speeding up to sea. In July 2022, BYD announced for the first time that the number of overseas new energy vehicles was 4,026 taels. In November, the sales volume exceeded 10,000 (12,300 vehicles) for the first time, and in December it was 11,300 vehicles. Among them, BYD only entered the Israeli market in October 2022, and its sales volume in that month ranked ninth. In November, 2,333 vehicles occupied the third place, taking a 10.6% market share. At the same time, BYD ATTO3 won the monthly sales champion of a single model.

It is understood that BYD successively announced Germany, Sweden, Norway, and then signed a 6-year 100,000 new energy vehicle order with the European car rental company SIXT, and will sell the SUV model “Yuan” in Japan for the first time, with a suggested retail price of 440 yuan. million yen (about 220,000 yuan). At the same time, BYD has also entered the markets of Colombia, Chile, Thailand, New Zealand, and Uzbekistan. With the continuous advancement of the global layout, export sales are expected to continue to grow rapidly.

In the transition from traditional cars to smart electric vehicles, BYD has taken the lead. Next, what it has to do is to quickly seize market share globally before traditional car companies complete their transformation. The role of looking up to the brand is to prove to the world that BYD has the most advanced automotive technology in the world, and then enhance brand competitiveness.

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