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Text | Yang Xiaohe
Source: Tech Planet
From August to October 2022, NIO Chairman Lin Bin and President Qin Lihong drove NIO ET7 by themselves, traveled 2,500 kilometers in 10 countries in Europe, and completed a “travel around Europe”.
This tour is a market research action for Weilai to open up the European market. It is also through this survey that Weilai believes that Europe is more suitable for the subscription model. In the following October, NIO announced that it would “rent only but not sell” to enter the four countries of Germany, the Netherlands, Denmark, and Sweden, providing three models of ET7, EL7 (ES7), and ET5. The vehicle subscription period ranges from 1 month to 60 months. not wait.
However, Weilai’s subscription price is comparable to that of well-known car brands such as Porsche, which has caused heated discussions in the market.
“It is reasonable for us to be close to the price of certain models of Porsche and Mercedes-Benz. This is the level of NIO’s own product strength and value. In China, many people are used to thinking that for the same car, Chinese brands should be better than German brands. How much cheaper it is, we have never thought about it in Europe.” Li Bin, the founder of Weilai, said confidently that to get back to the base of BBA (Mercedes-Benz, BMW, Audi) is to regain the market with a high-end attitude, rather than winning by price.
In fact, Weilai has been in Europe for 6 years. But in the past 6 years, it did not go all out. Building a car, going public, and stock market crash, Weilai is too busy at home to take care of overseas.
Today, new opportunities have emerged in overseas markets. The first is the growth of overseas demand. At present, about 130 countries and regions around the world have proposed carbon neutrality goals. For example, the Netherlands and Norway will ban the sale of fuel vehicles in 2025, India and Germany are planning to ban the sale of fuel vehicles in 2030, and France and the United Kingdom plan to ban the sale of fuel vehicles in 2040. The market has extensive demand for new energy vehicles to replace fuel vehicles.
Moreover, some overseas countries are also increasing subsidies for new energy vehicles. For example, Norway has launched a number of policies to support electrification transformation, including exemption from 25% value-added tax, import tariff exemption, and road maintenance tax exemption; German new energy vehicle consumers can enjoy subsidies of up to 9,000 euros. Further activation of the new energy vehicle market.
Therefore, although the sales of “Wei Xiaoli” (Nio, Xiaopeng, Lili Auto) in the domestic market is no longer an absolute dominance in the new car-making forces, but Weilai and others still started the pace of large-scale overseas. And not only in Europe, but also new domestic car-making forces are also deploying in the Asia-Pacific region.
In February 2022, BYD took the lead in listing Yuan PLUS EV in Australia, and orders have exceeded 4,500 units so far. In August, BYD announced its entry into the Thai passenger car market and fully invested in the construction of its first overseas passenger car factory in Thailand. Another company, Nezha Auto, a new car-making force, even launched a unique model in Southeast Asia, which has become a hot seller in Thailand, Nepal and other places.
In this wave of going overseas, new car-making forces have sold their products all over the world. According to data from the China Association of Automobile Manufacturers, China’s cumulative car exports in the first eight months of this year have surpassed Germany’s, making it the world’s second-largest car exporter after Japan. Among them, 389,000 new energy vehicles were exported, a year-on-year increase of more than double, and the growth rate was much higher than the overall export growth rate of the auto industry.
After experiencing the domestic competition in the Red Sea, the new car-making force has grown up for 8 years, and it has become a natural choice to roll out overseas. But in the face of the once powerful enemy, can the new car-making forces win?
New car-making forces set off a second wave of going overseas
For a long time, the domestic auto market has been occupied by European car companies such as Volkswagen and Peugeot, as well as Japanese companies such as Toyota and Honda.
In fact, in the era of fuel oil, domestic cars such as Geely and Great Wall have also set off a wave of going overseas, trying to counterattack back to overseas markets. However, due to the lack of core technology, it did not subvert the foreign market structure.
But in the electric age, Europe does lag behind.
Taking core battery resources as an example, currently only 3% of global battery production is located in Europe, with Asia accounting for 85% (69% in China). There is no cost advantage to producing batteries in Europe. The main focus of trams is intelligence, and overseas traditional car companies are also lagging behind domestically.
More importantly, the pace and determination of the transformation of these traditional car companies are not so strong. For example, the BMW i3 that BMW is selling is based on the CLAR architecture. This architecture platform is not a professional-grade pure electric vehicle model, but a “oil-electric symbiosis platform”. Compared with many pure electric architecture platforms in China, such as Xiaopeng and Weilai, they have evolved to 800V ultra-fast charging platforms. In contrast, the BMW CLAR architecture is unavoidable. Based on the new pure electric version of the Neue Klasse platform, BMW will not launch many models until 2024.
It can be said that at the current stage, the new domestic car-making forces still have a leading edge for a period of time. Seize this rare opportunity and become a collective choice for everyone at the moment.
At the Paris Auto Show to be held in October 2022, the new domestic car-making forces have successfully won a lot of attention.
Chinese brands such as Great Wall, BYD, Leapmotor, and Celis will be present at the exhibition. Among them, BYD unveiled three models at the Paris Auto Show: Tang, Han and Yuan PLUS (the local model is called BYD ATTO 3). It is 38,000 euros (about 270,000 yuan).
In the previous July, BYD announced its official entry into the Japanese passenger car market, in August it announced its entry into Germany, Sweden, Denmark and other markets, and in September it held an online press conference in Europe. However, in September, BYD’s sales reached 200,000 units, and overseas sales of new energy passenger vehicles totaled 7,736 units. The overseas market is not yet the main force.
Another player in the domestic market, Nezha Auto, is also an important player in the battle for the sea. In March 2022, the Nezha Auto Thailand subsidiary was officially established; in August, the Nezha V right-hand drive version was launched in Thailand and officially entered the Thai market. There are currently 5 countries that have gone overseas, including Thailand, Israel, Nepal, Laos, and Myanmar. According to data released by Nezha, as of mid-September, Nezha’s overseas orders for cars had exceeded 5,200.
BYD and Nezha’s aggressive going to sea also attracted BYD and other car companies’ attention at the Paris Auto Show. French media Viralpro bluntly stated that at the Paris Auto Show, “either Chinese electric cars or not electric cars”, Chinese car companies “launched a large-scale European offensive”.
In order to win the European market, Norway is a country that cannot be bypassed. Norway’s favorable tax policy has resulted in four of every five cars sold being pure electric. Therefore, it is not only the regular models of new car-making forces such as sedans and SUVs, but Norway is chosen to enter the European market. Lantu and other players who currently focus on the MPV market have also begun to set their sights here. On the afternoon of September 26, 500 Lantu FREE were officially shipped to Norway.
After all, D-class, E-class, and F-class cars all have a large market in European corporate vehicles, so even though it is a new brand of Dongfeng Group, Lantu also planned the pace of going overseas from the very beginning.
Not only well-known domestic players such as BYD and Weilai are going overseas, but also some new players in car-making, who have determined their goal of going overseas from the very beginning. For example, Skyworth Automobile (formerly Tianmei Automobile) was established in 2018, and the new Skyworth EV6 was just launched in July this year, and now the car has been sold to more than 40 countries.
“On the streets of countries like Germany and Denmark, and our perception of the streets in China, the number of electric vehicles is still a little less, and we can judge that its great development period has not yet arrived,” said NIO President Qin Lihong. , there are still broad market opportunities for new forces to go overseas.
According to the latest data, in the first eight months of 2022, Chinese brands have accounted for nearly one-twentieth of electric vehicle sales in Western Europe, and the sales ramp-up has just begun.
Back to the base camp of Toyota Volkswagen
Going overseas also means that there is no national tide halo blessing, and new domestic car manufacturers have also started to compare prices, products, and services, and compete in overseas markets through different dimensions.
First of all, from the perspective of cost-effectiveness, Nezha and Leap Motor, which have emerged in China, have also copied this style of play to overseas markets.
In August, according to pictures from the Internet, Nezha’s store in Thailand was crowded with people, and it was still very lively. According to a blogger’s analysis, Nezha U is mainly positioned as a “super-long battery life smart pure electric SUV”, which is the first model equipped with the 8155 chip among the trams within 150,000 yuan. The ultra-high cost-effective route has allowed Nezha to take the lead in domestic sales, and it is also smooth sailing in the Southeast Asian market.
Another new force, Leap Motor, also exported its most cost-effective miniature car to the European market. At present, the T03 is Leapmotor’s first export model, which has passed the EU vehicle form certification, and the first batch has been shipped to Europe.
However, BYD, which has always had a cost-effective advantage, has played a role in product power in the European market. This is also because BYD suffered losses in the early days.
As early as 1998, BYD established its European headquarters in the Netherlands, but at that time its business was not passenger cars, but new energy commercial vehicles, such as electric buses and taxis. In the early domestic market, BYD was also commented that its sales mostly relied on online car-hailing.
Although the purpose of the car is not high or low, it affects the choice of passenger cars for some consumers. After years of development, the new car-making forces have begun to meet the discerning eyes of consumers.
Today, BYD ATTO3 is expected to become the main sales force in the European market. According to the data, this car is equipped with 60.5kwh usable power, 261 miles of WLTP battery life, and a maximum charging rate of 88KW, which is about 7,000 euros lower than the Peugeot 208 in the same segment and about 10,000 euros lower than the Renault Megane. more prominent.
The price of BYD “Tang” is close to that of Audi e-Tron Premium Plus Quattro. It is worth mentioning that the price of BYD Tang and Han vehicles exceeds 70,000 euros, which is twice as high as that in China, directly benchmarking the BMW X5. This is also because BYD sees the European market and can temporarily provide the same type of smart cars, so the products still have a certain lead.
NIO, which is a new force in car-making, has shown its magical powers in the overseas market, and has not taken the usual path in the domestic market.
This is also what Li Bin and Qin Lihong got during this trip around Europe. For example, in many European countries, high-speed and city streets are still charged slowly. Qin Lihong said that slow charging is very inconvenient. He has to hurry when he wakes up in the morning. The assistant said that you will have breakfast, and the car has not been fully charged overnight.
The particularity of the European market also allows NIO to see an opportunity to provide more complex BaaS services in the European market. And Weilai’s BaaS service is not just a power exchange service well-known in the domestic market. “You can simply understand that in addition to the electricity bill, insurance, maintenance, everything is included, and one price is all-inclusive” . So this is also an implied reason that Li Bin believes that NIO’s subscription fee is not cheaper than Porsche’s, because NIO’s services are more comprehensive.
Li Bin believes that the subscription model is more complicated than simply selling cars. The entire service must be packaged into the service. How to price and how to provide long-term services are difficult problems. In fact, in the early days, Weilai tried a worry-free service package in China, but the market recognition was not too high.
After all, the service is relatively complicated, but Li Bin believes that Europe is quite accepting this matter, and in the long run, it needs sales to prove it.
The most urgent lesson to make up for going to sea
In the boom of new car-making forces going overseas, the sales of new energy vehicles are also skyrocketing.
Data from the China Passenger Car Association shows that the export of new energy vehicles in China is growing explosively. In August, passenger vehicle exports (including complete vehicles and CKD) reached 140,000 units, a year-on-year increase of 182%. New energy vehicles accounted for 25.9% of total exports, or about 36,000 units.
Of course, what cannot be ignored is that Tesla’s Shanghai Gigafactory has an annual production capacity of more than 750,000 vehicles and supplies cars to markets outside North America. Therefore, Tesla’s Shanghai Gigafactory exported more than 30,000 vehicles in August, contributing to the main force of domestic new energy exports.
Tesla, the catfish, has stirred up the domestic new energy vehicle manufacturing market. Although it is very sloppy in China, in Europe, new car-making forces still respect the home field of their competitors very much.
“Maybe their market value is not much higher than ours, but their sales, service network, supply chain system, etc. are much higher than ours. We absolutely need to learn and catch up with them.” As Li Bin said, localization It is also the most urgent lesson for the new car-making forces to make up.
At present, the NIO energy plant invested and constructed by NIO in Hungary has completed the first power exchange. This is not enough. Service centers, voice interaction and vehicle-machine maps, and even localized operations such as cloud services and data centers are also being connected with local suppliers.
In an interview with European media, Li Bin also introduced the intelligent progress of NIO in Europe. In April 2021, NIO did assisted driving and related tests here. Now it has a large test team and an innovation center in Berlin. “Autonomous driving and assisted driving, the differences in regulations in many countries are still not small. We need to provide services here to provide comprehensive docking. Without a local team, it will definitely not work.”
Compared with Weilai’s service and R&D projects, BYD is the first to solve the problem of production capacity. After all, BYD still has 700,000 “arrears” in the domestic market, and there is no production capacity to allocate to overseas markets. Earlier, BYD announced that it had signed a cooperation agreement with SIXT, a global car rental company. According to the agreement between the two parties, SIXT will purchase at least 100,000 new energy vehicles from BYD in the next 6 years. In the face of these deterministic production capacities, BYD chose to build a factory directly.
In September, BYD signed a contract with Thailand’s WHA Industrial Park to build its first overseas passenger car factory; in October, BYD announced that it would invest about US$583 million to build three new factories in Brazil. According to Caixin, a BYD affiliate will order 8 ro-ro ships with a capacity of 7,700 vehicles at a shipyard in Yantai, Shandong, with a total cost of nearly 5 billion yuan to build a “sea fleet” for BYD.
Nezha Auto, which built a factory in Thailand earlier, will focus on improving its overseas sales channel capabilities in 2022. In September this year, Nezha Auto opened its first 3.0 image direct-sale experience space in Thailand, becoming the first “direct-sale store of a new Chinese automaker” to land in Thailand. And after the Nezha V right-hand drive version was launched, Nezha promised to launch electric models such as sedans and SUVs for overseas markets at the rate of “at least one model per year”.
Of course, overseas auto giants are not willing to be seized of the market, and many traditional auto giants have even launched a counterattack domestically.
Recently, it is reported that BMW intends to invest another 10 billion yuan to expand its high-voltage battery production center in Shenyang and expand its investment in battery projects in China. At the same time, Volkswagen Group will invest in the domestic autonomous driving chip Horizon, and CARIAD, a software company under the group, will join hands with Horizon to establish a joint venture in China. To this end, the Volkswagen Group plans to invest about 2.4 billion euros, “this is the largest single investment of Volkswagen in China in 40 years.”
Overseas traditional auto giants are also aggressive, defending their base camps, competing globally, and the most challenging mission of the new car-making forces has come.
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