Thinking with common sense and not following what others say has become a luxury these days. There is more and more information, and it is changing faster and faster. It is true and false, false and true. It is not easy to clarify something and restore some objectivity through complicated information.Recently, news about electric vehicles has been flying all over the place, ranging from annoying to joyful to nonsensical.
The ideal is the troubled one.
After the 2023 financial report was released, Ideal's stock price soared. Just when Li wanted to imagine a better future, Ideal's new product MEGA encountered Waterloo, highways and high-speed trains turned into a thriller, and the number of unsubscriptions exceeded expectations.
NIO is the happy one.
Even though your performance is mediocre, you still have to have fun when it's time to have fun.
On March 14, Weilai officially announced that it had achieved 40 million battery swaps, which was a milestone event for Weilai. Li Bin was so happy that he could not open his mouth from ear to ear.
Happy or sad, Chinese electric vehicle companies like Wei Xiaoli are working hard for the new energy vehicle industry.
But internationally, there seems to be a reverse trend toward electrification, and China seems to be turning into an island of electric vehicles.
Apple disbanded the electric car project code-named "Titan", turning tens of billions of dollars into sunk costs.
Almost at the same time, Mercedes-Benz announced that it would suspend its all-electric strategy in 2030 and will continue to develop and produce fuel vehicles in the next ten years. Audi announced at the end of last year that it would slow down the launch of electric vehicles; Ford announced at the beginning of this year that it would shut down all electric vehicle production lines; General Motors postponed its plan to open a new factory.
At the national level, the media revealed that the European Union is considering delaying the "oil ban" policy, and the United States is also considering relaxing restrictions on vehicle emissions.
For a time, there was a tremor in the country: electric vehicles were about to be abandoned by the world, and China became an island of electric vehicles.
What do you think?
01
Are electric cars abandoned? Illusion!
Peel away the fog and the truth can emerge.
The world is not abandoning electric vehicles, but has to accept the reality that they cannot achieve what they expected.
Decisions made with a heated mind must return to reality after cooling down.
Before Russia and Ukraine, there was no inflation problem. European and American countries were vying to be the world's carbon reduction leaders and setting goals, each one more radical than the other.
British Trump-Boris Johnson twice changed the timetable for the "oil ban" and abruptly advanced the end line to 2030.
Many people in the UK criticized Boris at that time, saying that this goal was unrealistic and impossible to achieve.
The face-loving British are very realistic and there is no need to be tough on things they cannot do.
On September 20, 2023, Boris’ successor Sunak sincerely told the people:
"The ban on the sale of fuel vehicles will be postponed from 2030 to 2035. The policy change is to give the people more sufficient transition time and autonomy.
The cost of electric vehicles is falling, their driving range is improving, and charging infrastructure is evolving. Based on this trend, it is predicted that by 2030, the vast majority of cars on the market will be electric. "
It has to be said that among Western countries, the UK is indeed sophisticated and can always make adjustments before other developed countries.
Source: Wen Xin Yige
Recently, the EU and the United States have actually followed the UK's footsteps in their statements. They are not not refraining from new energy, but considering reality and delaying the schedule.
It's not too late to make amends.
Seeing China's rapid progress in the field of new energy, European and American countries became jealous and began to think coldly.
If we want to avoid being choked by China and let consumers buy cars produced in China, we must work hard on the supply chain and prepare infrastructure.
On January 29, 2024, Porsche Chief Financial Officer Meschke said that the two main reasons for the slowdown in electric vehicle sales in Europe are:
The local electric vehicle charging network infrastructure in Europe is not yet complete, and the price of electric vehicles has remained high.
According to Yuanchuan Technology Review, the commuting radius of European and American consumers is much larger than that of China.
Taking Germany as an example, in 2023 there will be approximately 3.9 million people commuting distances of more than 50 kilometers and round trips of more than 100 kilometers. Pure electric vehicles require higher charging frequency to meet vehicle demand.
Without a disruptive improvement in battery life, such charging frequency requires a lot of infrastructure to make electric vehicles as smooth as fuel vehicles.
But at present, Europe and the United States are relatively slow in terms of charging facilities.
In January this year, the U.S. Department of Transportation announced an allocation of $623 million to expand the U.S. electric vehicle charging infrastructure. The funding comes from a bipartisan 2021 appropriations package that has $2.5 billion for charging and green fuels.
The U.S. Department of Energy said it currently has nearly 161,000 charging piles and plans to install 500,000 electric vehicle charging terminals by 2030. There are 26 factories in the United States capable of producing these products.
There is really not much money spent on infrastructure, and people who have been to the United States can understand that people on this continent have no concept of energy conservation. Compared with the fuel consumption of Japanese cars, American cars are in the sky.
The Biden administration aims to have electric vehicles account for half of all new car sales by 2030.
It's probably difficult. The price of electric vehicles is high and the infrastructure is underdeveloped. Even Tesla, which ranks first in electric vehicles, only accounts for 4.2% of the total U.S. automobile market.
The charging facilities in Europe are slightly better than those in the United States, but they are also lagging behind.
As of April 2023, Europe has 610,000 charging points, an increase of 20,000 in a single month, a year-on-year increase of 60.8%, and a month-on-month increase of 3.46%. Public charging piles accounted for 55.31%.
84.23% of the equipment in European charging facilities has a power of less than 22kW, and charging points are concentrated in more developed areas such as the Netherlands, Germany, and France.
In contrast, in China, the charging infrastructure is much better. The number of charging piles in existence is 9 million, which is about 56 times that of the United States.
Data source: China Charging Alliance Ministry of Public Security Unit: Wanzhuang
Let’s look at the power replacement equipment.
On the national high-speed network, there is a battery swap station at least 200 kilometers away. As of March 13, NIO has deployed 2,382 power swap stations across the country, and more than 80% of users have at least one power swap station within 3 kilometers.
According to official information released by NIO, NIO’s battery swap station swaps an average of 70,000 batteries per day, and on average, a NIO vehicle departs from the battery swap station with a full battery every 1.23 seconds.
Just from the infrastructure data of charging and battery swapping, we can see how crazy and successful China’s electric vehicle promotion is.
Facing the squeeze of Chinese electric vehicles, Europe and the United States are very uncomfortable. If a large number of Chinese electric vehicles are imported, the cost in the West is so high that profits will be difficult to achieve.
02
The Western electric car industry is divesting China-made
Forging iron requires one's own hard work. In order to reduce costs and be independent and controllable, the West is making a big fuss in the supply chain.
On March 13, U.S. Treasury Secretary Yellen made a special trip to Chile to pay attention to lithium mines. Yellen believed:
Including clean energy, some key supply chains in the United States are "over-concentrated in China." Chile has the world's largest lithium reserves, and the United States may increase imports of the mineral from Chile.
Yellen’s trip to Chile, in the words of Western media:
As electric vehicles and clean energy gradually take over, Western leaders, led by the United States, are trying to divest China of the lithium supply chain, hoping to break away from dependence on geopolitical rivals for the supply of key raw materials.
In May last year, the United States signed a deal with Australia, which has the second largest lithium reserves, to ensure supplies of the critical mineral.
Nowadays, the schedules of electric vehicles in major European and American countries are generally delayed by 5 to 10 years. Interestingly, this time dimension is also the time when Western media believes that it is necessary to break away from China and establish its own clean energy industry.
King Ning is indeed very strong, but LG New Energy, supported by the United States and Europe, is not weak either. The gap between the two will be minimal in 2024, and even the growth rate will be the same, at 28.5%.
It takes time to catch up. Return to the present. Before costs come down, what companies in European and American countries can do is adapt to reality and make adjustments.
For example, Ford's strategy is to tighten its belt and focus on profitable electric vehicles to improve the input-output ratio.
According to a report from Automotive News Europe quoted by China Economic Net on February 19, Ford CEO Jim Farley said, "The electric vehicle market is changing rapidly, which makes planning and deployment more difficult for car companies. But for Ford, the next development focus will be to focus on the development and sales of small electric vehicles that are lower in cost and can be profitable more quickly."
Ford Motor Co., Ltd. has been losing money on electric vehicles for consecutive years. It is expected that Ford Motor Co., Ltd.'s electrification segment will lose $5 billion to $5.5 billion in 2024. In the past few years, losses in this sector have reached billions of dollars per year.
As a response strategy, Jim Farley recently said that Ford is developing an electric vehicle platform for smaller, more affordable products and is committed to making the platform profitable quickly after it is put into use.
The West must prevent China from surpassing its industry and technology.
The new U.S. new energy vehicle subsidy regulations clearly state that starting from 2024, electric vehicles purchased by consumers who enjoy tax relief policies must not contain battery components manufactured or assembled by any "foreign entity of concern" (FEOC).
By 2025, if you want to enjoy the tax subsidy policy, the vehicles purchased by consumers cannot use key minerals extracted, processed or recycled by FEOC, such as lithium, cobalt and nickel, etc., with strict restrictions on the raw material end.
France will increase the amount of subsidies after January 1, 2024, but will restrict the import of electric vehicles from Asia.
It’s not that we don’t want to develop, but we want to retreat and divest ourselves of Chinese manufacturing.
In the face of changes in Western electric vehicles, Zuo Yan'an, former chairman of JAC Motors, analyzed that the penetration rate and scale expansion of my country's new energy vehicle market may far exceed the expectations of multinational car companies, which may accelerate the erosion of their global competitive advantages in the field of traditional fuel vehicles, which will inevitably arouse their vigilance.
While multinational car companies are working together to expand the fuel vehicle market, they have the strategic consideration of "letting the bullets fly for a while longer." The most realistic consideration is to put away unprofitable businesses first.
As for China, it is even more impossible to abandon electric vehicles.
The reason is very good:
First, there are signs of overtaking on curves, and it may become the next high-speed rail project;
Second, it has relatively complete infrastructure and relatively leading electric vehicle big data;
The third is to form a complete industrial chain, forming a closed loop from intelligence to manufacturing, accounting for 70% of the world's production capacity;
Fourth, competitive companies have been formed at various industrial ecological nodes, such as BYD, Ningde, Tianci, Huawei and other companies;
Fifth, a global layout from minerals to technology has been formed.
Just talking about survival strategies, we cannot abandon electric vehicles.
China has a population of 1.4 billion, and the number of cars in China is about 300 million. The United States has a population of more than 300 million, and the number of cars is nearly 300 million.
If the number of cars owned by Chinese people is the same as that of the United States, at least more than double the number of cars, there will not be so much traditional energy, and the pollution will be unimaginable.
China will continue to invest in electric vehicles. If there are about 200 million more electric vehicles in the future, power stations and charging piles will grow exponentially, and smart grids will be indispensable. This is a huge system project.
03
The risk of electric vehicles in China is coming!
Advantages and sometimes disadvantages.
Like other commodities, electric vehicles face two major risks.
There are external pursuits and interceptions. The current global policies are not friendly to China's electric vehicle exports. From resources, trade to technology, they are almost staring at each other. Once the domestic market becomes turbulent, the life of the company will be at risk.
Internal subsidies are getting lower and lower, coupled with bottomless low-price competition, no one in the upstream and downstream industry chain can make money.
On February 10, 2024, Xu Daquan, President of Bosch China, revealed to LatePost that many Chinese automobile brands proposed to reduce parts purchase prices by 20% at supplier conferences. Considering that the United States has more restrictions on the export of parts and components companies, and the domestic annual reduction (price reduction agreed with car companies by about 5% every year) exceeds the quota, the profitability of the entire industry chain will continue to suffer in the future.
The fierce price war between automobile companies has an increasing impact on the Chinese economy.
Tianfeng Securities recently made a calculation. Based on the current price war, the year-on-year growth rate of CPI transportation in 2024 may drop to around -8%.
If combined with the decline in mobile phone prices, the total of cars and mobile phones will cause the CPI to fall by 0.45%.
China's CPI has been sluggish for a long time. On the one hand, consumption is sluggish, and the impact of excessive fighting among enterprises cannot be underestimated.
If the cost is low enough, it is competitive, but excessive competition will harm others and ourselves.
If this continues, the automobile industry will be unable to complete capital accumulation and industrial upgrading, let alone maintain its dominant position.
China does not have sufficiently leading technological advantages. If it does not seize the opportunity and make breakthroughs in time, the advantages of electric vehicles may disappear.
Liu Xiaozhi, a former General Motors executive, said that China has successful experience in electric vehicles, such as clear subsidy policies, a large consumer base, the courage to drive new energy vehicles and the courage to eat crabs, lots of lessons, big data, fast iteration,But everything has a critical point, and more turning points are not better. If technology fails to break through when it should, it will spin at a low level.
For example, China's motors, actuators, sensors and other fields cannot keep up with Tesla, and in some technical fields and devices, it is far behind Toyota.
Zuo Yan'an, the former chairman of JAC Motors, is worried that if it falls into vicious competition and cannot achieve effective capital accumulation during the rapid growth of the industry, Chinese companies will lack stamina when participating in international competition.
He suggested that each company should make its own advantageous and characteristic products instead of swarming downstream to make cars, which would increase the viciousness of competition.
Capable leading ICT companies can increase investment in core electric smart technologies such as solid-state batteries, products and industrial software, high-end chips, artificial intelligence and other fields to consolidate the fundamentals of electric smart cars.
Multinational car companies are accelerating the pace of technology and product innovation in the field of electric intelligence. We cannot be constrained by the concept of electric car islands and tie ourselves up.
Zuo Yan'an said, if we have several companies on the track that are world-class companies that understand and practice Automotive Industry 4.0, how can the Chinese market become an "electric vehicle island"?
Of course, the Chinese market has quickly cultivated a number of companies, a number of engineers suitable for the electric vehicle industry, and a number of loyal consumers, gaining valuable development time.
China's electric vehicle industry, like high-speed rail, has been successful so far and is full of vitality. Continue to believe in these companies, don't tie their legs and let them spread their wings.
Judging from some signs, in the field of new energy, Western countries have not stopped, but are accelerating. Never take it for granted that Western countries will return to an era when petrochemical energy was the mainstay.
On the contrary, the message sent through the "electric vehicle island" is that competition among all parties has become fierce.
Text/Banjian Baiyun