Editor’s note: In the past ten years, China’s auto industry has experienced a round of leapfrog development. After the clarion call of transformation sounded, the auto industry is firmly moving towards the era of intelligence.
As the protagonists of the new era, smart cars and autonomous driving also ushered in the peak of development last year. But this year, the market has taken a sharp turn for the worse. Salary cuts, layoffs, shutdowns, and waves of domestic and foreign turmoil have raised questions for practitioners. When China’s smart cars and autonomous driving are reshuffled, who will be out and who will survive?
With this, Xinzhijia launched the special topic “Ten People Talking about Smart Cars” to help industry builders go through the fog, see the underlying logic of smart car transformation, transform the pain of autonomous driving into strength, and gain the courage to move on .
This article is the fifth article in the series of “Ten People Talking about Smart Cars”. The protagonist is: Chen Hong of Hanergy Investment Group.
In 1993, when the Internet economy was just emerging, Chen Hong, who was only in his early 30s, went to Silicon Valley with the 200,000 US dollars he earned, bought some routers, rented some equipment, and founded an ISP (Internet Service Provider) the following year. company. This is his first venture, and it has been more than 20 years.
In the more than 20 years of experience in the technology and Internet industry, Chen Hong has witnessed and personally experienced the ups and downs of this industry.
In 2003, Chen Hong founded Hanergy Investment, focusing on China’s Internet economy, consumption and medical services, looking for long-term investment. According to statistics, Hanergy Investment Group has accumulatively helped more than hundreds of companies to complete more than US$68 billion in private equity financing and M&A transactions.
In 2017, Hanergy Investment officially entered the field of autonomous driving. After entering the game, Chen Hong and his team came into contact with many companies in this industry. From investment and service empowerment to the development of autonomous driving and related companies, they are in the middle of the game , Chen Hong has a particularly deep feeling for the ups and downs of the entire industry.
Recently, a series of negative events have continued to be staged in the autonomous driving market, and pessimism about the development has spread, and some investors have begun to take a wait-and-see attitude.
Perhaps because he has witnessed the ups and downs in the development of the industry, or because he has understood the laws of industry development, Chen Hong is more calm in the face of the uncertainty of autonomous driving.
“The development of autonomous driving lies in the use of various intelligent methods and auxiliary equipment to finally realize “cars replace humans in making decisions”. With the continuous increase of computing power and the iteration of technology, intelligent driving will always develop in a good direction, but Now it seems that the time to achieve the goal has been delayed. “
The Matthew effect intensifies, and non-leading companies “change lanes” or “sell themselves”
Since Google began to explore the road of unmanned driving in 2009, intelligent driving has become an upstart in the market. Capital and enterprises have begun to hunt this new track. According to McKinsey’s statistics last year, since 2010, the number of unmanned driving related technologies Invest over $100 billion.
It’s a pity that autonomous driving has never been just a competition of technologies. Due to the huge gap between input and output, in 2022, the enthusiasm for financing in the autonomous driving industry will ebb significantly.
Under the cold winter of capital, the contrast between strong brands and weak brands is sharp, and the Matthew effect of “the strong get stronger and the weak get weaker” is further amplified.
According to Chen Hong’s observation, “The cooling of the capital market has exacerbated the Matthew effect in the autonomous driving industry. At present, large amounts of funds are flowing to the industry’s top companies.” Specifically, the top companies are still favored by capital, and their performance is also growing.
The reason is that the top enterprises have concentrated the top talents in the industry, and they have a strong ability to integrate upstream and downstream resources, so they are considered to be able to quickly run through the business model.
Taking advantage of the trend, whether it is the entire autonomous driving industry or various subdivisions, leading companies have become the targets of competition.
Taking the chip field as an example, Horizon C round of financing poured into hundreds of institutions, and the financing was fiercely competed in the market. Siengine Technology completed nearly one billion yuan in round A financing, setting a record for the largest single financing in the domestic automotive chip design field.
Most of the market share is occupied by leading companies. In contrast, the living space of non-leading companies with obvious shortcomings such as high valuations and relatively lacking brand power has been further compressed. Under the accelerated reshuffle of the industry, it appears to be in jeopardy.
At present, “VC/PE are also more cautious about investing in these non-leading companies.”
How to break the deadlock? Chen Hong believes that when the blood transfusion is suddenly interrupted, non-head companies seem to have only two options: either choose to transform into a role in a specific scene, or choose to package themselves for sale.
Many domestic autonomous driving companies have indeed embarked on this path. Companies that are still alive are entering the supply chain of pre-installed mass production, while companies that are in a deadlock are seeking opportunities to sell themselves to OEMs.
The autonomous driving industry is undergoing a new round of reshuffle, and the players who can survive this knockout are often better able to find a viable and profitable business model. From this point of view, eliminating the weak and retaining the strong in the autonomous driving industry is a long-term benefit for the development of the industry.
In the subdivision scene, the “survival test” of cross-channel players
At the time of the rise of autonomous driving, the Robotaxi track was considered a definite development direction. All of a sudden, new and old players gathered on the track, each trying their best to get ahead.
However, Robotaxi’s Mount Everest is difficult to surpass, and commercialization is still far away. After many negative incidents, the sentiment in the industry has become more pessimistic.
Ford’s chief senior product development and technology officer said: “It is more difficult to realize unmanned driving in a dense urban environment than to send a man to the moon.” Any company doing Robotaxi will be finished.”
Compared with the gloomy prospect of the Robotaxi track, autonomous driving technology has a different scene in mining areas, ports, airports and other sub-segments.
Unmanned delivery vehicles have begun to drive on the streets of cities instead of manpower, and unmanned driving in mining areas has gradually gone to safety officers and started normal operation.
Chen Hong believes that autonomous driving subdivision scenarios can help companies reduce costs and increase efficiency, and many companies have already implemented it, with promising prospects.
In the past two years, whether it is from the financing market or the technology implementation, it can be seen that the segmented scene is becoming a new coveted place for autonomous driving players.
Facing the new market environment and rules, no matter how much Robotaxi players commemorate the past glory, they have to change their thinking and seek a business path to quickly land.
As a result, Robotaxi players began to make cross-channel layouts, sacrificing the name of “scene dimensionality reduction” to the outside world, and vying to become the dominant player in the autonomous driving subdivision scene. Some of them choose multiple scenes to go hand in hand, and some choose to go directly from the open scene to the closed scene.
A cruel reality is that these cross-channel players who claim to be able to achieve “dimension reduction strikes” in segmented scenarios do not have the upper hand in the competition for dominance. Looking back at the present, they are facing a crisis. “Survival Exam”.
Compared with the autonomous driving companies that entered the vertical scene earlier, Robotaxi players have more innate deficiencies in the development of subdivided scenes, which are specifically reflected in: first, the development genes do not match the track; second, the synergistic integration of scene matching and industrial chain The challenge is greater.
For a long time, Robotaxi has carried the “unmanned driving” star sea, and is committed to realizing L4 level autonomous driving in open scenarios. Now turning to enter the segmented autonomous driving scene means that it needs to switch in technology and development mode.
Although the subdivision scene is more closed and the traffic flow is small, it is considered that the technology can be implemented better, but the technology industry has a specialization. The players of the two tracks have fundamental differences in the technology selection scheme and the research and development of data and computing power.
In short, for these cross-channel players, it is basically necessary to start from scratch to enter the subdivision scene.
In addition, entering the segmentation scene is not only a technical problem, but also tests the company’s timely changes and adjustments to the product form and supply chain.
Each scenario has its own particularities. For example, mining equipment generally weighs tens of tons or hundreds of tons, and requires higher control. The port scenario involves the scheduling of more scenarios, which tests the coordination ability.
Huituo intelligent mine operation
How to allocate different energies to different scenes? How to build technical barriers in a short period of time? These are all problems that need to be solved urgently, and all of the above are not easy for autonomous driving startups.
The second cold winter can also survive the second winter
“This is not the first time the autonomous driving industry has experienced a cold winter.”
Focusing on 2019, the autopilot industry at that time began to go downhill after experiencing a large-scale expansion in the previous year: the cost of autopilot hardware remained high, the prospect of commercialization was dim, and autopilot star companies fell into the battlefield At the same time, a wave of layoffs swept the global auto industry.
Chen Hong, who is in the investment market, has witnessed the ups and downs of the market. “At that time, many people had already begun to look down on the industry, thinking that a large number of autonomous driving companies would be shut down.”
Fortunately, in the next two years, the autonomous driving industry suddenly became hot again, and a lot of money poured into the track again.
History seems to be repeating itself. At present, the autonomous driving market has taken a sharp turn for the worse, and the industry’s “cold” atmosphere continues to spread. Under such circumstances, Chen Hong believes that “the autonomous driving industry has experienced the second cold winter, and it can survive the second winter.”
On the whole, the development of autonomous driving has made progress, the algorithm capabilities of autonomous driving companies have continued to improve, the cost of related hardware has continued to decrease, and autonomous driving technology has also achieved large-scale commercialization in subdivided scenarios.
In addition, compared with the gloomy prospects abroad, the moon for the development of domestic autonomous driving may be rounder.
On the one hand, compared with foreign market orientation, the development of autonomous driving in my country has certain institutional advantages.
In 2015, when domestic autonomous driving was on the rise, the country raised the development of intelligent connected vehicles to a national strategic level. After that, the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Science and Technology and other central ministries and commissions successively issued relevant policies to boost the development of the industry. Since 2021 At present, domestic policies and regulations that are favorable to autonomous driving are constantly “overweighting”.
According to Hanergy Investment’s research on autonomous driving subdivision scenarios, “when the product reaches a certain maturity, the role of the country’s promotion will be very obvious.”
On the other hand, domestic autonomous driving technology has already landed in segmented scenarios.
Take the unmanned delivery scenario as an example. Not long ago, Amazon and FedEx abroad successively announced the closure of unmanned delivery vehicle projects. The reason is that they cannot achieve cost reduction and efficiency increase. Down steadily.
Amazon’s driverless delivery vehicle
As Chen Hong said, the development of autonomous driving in foreign mining areas and logistics scenarios has a certain reference effect, but it cannot be completely compared. At present, domestic progress is relatively smooth.
“Investment Opportunities at Any Stage”
The development of autonomous driving is “a long way to go”. In this long-term battle, investment institutions must always maintain a keen sense of the market.
From an investment point of view, Chen Hong told Xinzhijia: there are investment opportunities in the autonomous driving industry at any stage, even in the so-called cold winter.
In the long-term observation and layout of the investment market, Hanergy Investment has also formed its own investment logic, and follows different investment strategies at different stages of the growth of autonomous driving.
In the early stage, autonomous driving companies are “fledgling”, and autonomous driving is an entrepreneurial project that requires comprehensive technology and business dimensions. The team configuration and the role of the founder are particularly important.
During this period, investment institutions prefer to judge investment companies from the perspective of technology and talents. After entering the market, investment institutions also need to provide more strength for enterprises to help them grow.
Today, autonomous driving companies are gradually maturing, gradually moving from “conceptualization” to implementation. Looking at the entire industry, investment opportunities are not small.
On the one hand, the companies that are currently surviving in the market are also relatively mature in terms of business models, and their turnover and net profit are growing. At this time, if the valuation remains unchanged, investment institutions can obtain a greater return on investment. On the other hand, privatization investment can also create some returns. By helping enterprises to integrate resources, they can expand their capabilities and scale.
During this period, the logic of choosing investors or companies in the field of autonomous driving has also changed. Whether entrepreneurs have the ability to deal with strategic investors, car manufacturers, and local governments has become an important criterion.
According to Hanergy Investment and Chen Hong, autonomous driving will form a new market structure in the new round of elimination, but no matter how it changes, the development will not stop.
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