Why are companies and countries grabbing the new energy vehicle industry?
01
Yesterday we talked about the phenomenon of "power rationing and production stoppage", which is caused by a series of reasons such as dual control of energy consumption, reduced production and rising commodity prices.
Today, we will start with the aspect of new energy vehicles to talk about the trend of industry and energy.
In fact, we are no strangers to new energy vehicles, and this new energy vehicle arms race related to capital, technology, talents, and markets has begun.
Not only are new automakers, but also traditional automakers, high-tech companies that have crossed borders, and the countries behind them.
02
On April 3, 2015, a French newspaper published an article called "China is the 'Money Printer' of the World's Automotive Giants."
There is this passage in the article that says:
"China generates 40% of the profits of the auto manufacturing industry, but only accounts for 22% of car sales, and international car companies only achieve an average profit margin of less than 7% worldwide, but in the Chinese market, they get a profit margin of 12%."
This passage profoundly describes the dilemma faced by China's auto industry.
In the past, we emphasized that "market for technology" has achieved certain results, and many independent brands and joint venture brands have been born.
However, the size and profit margin of our company are far lower than that of international giants, especially in the field of high-end cars, which are even less competitive, and most of the profits have been earned by the United States, Europe and Japan.
I went to look for relevant data, and it can be seen that the life of domestic cars is not very good, and the share is gradually declining.
However, the good news is that our share of new energy vehicles is rising sharply.
In 2019, new automakers represented by NIO, Li Li and Xpeng had a 6% market share of new energy vehicles, and a year later, in 2020, this figure expanded to 25% again.
Wang Chuanfu said that the market share of new energy vehicles in the entire automotive industry has also exceeded the key node of 16%, entering a period of rapid development.
On this track, everyone is almost standing on the same starting line, even Tesla, after so much negative news in the first half of the year, it does not look absolutely invincible, not to mention that Xiaomi and Huawei's entry into the new energy vehicle to varying degrees also marks two things:
First, the global race for new energy vehicles has just begun.
Second, behind the competition of enterprises, there is also a contest between countries.
03
In November last year, the General Office of the State Council issued the "New Energy Vehicle Industry Development Plan (2021-2035)", proposing that by 2025, the proportion of new energy vehicle sales will reach 20%, and the Ministry of Finance will support the construction of charging piles for new energy vehicles.
Last month, German Chancellor Angela Merkel convened her last "automotive summit" of her tenure to launch the automotive industry's "Future Fund" in time for the September election, providing 1 billion euros to promote the electrification and digital transformation of the automotive industry.
Russia plans to allocate 65 billion rubles (equivalent to 6.5 billion yuan) annually to develop autonomous driving, hybrid, and electric technologies.
As the world's number one power, the United States has invested a lot of money.
Biden signed an executive order in early August to make new energy vehicles account for 50% of U.S. passenger car and light truck sales by 2030.
In May this year, the US Senate also passed the US Clean Energy Act, which stimulated the new energy automobile industry more than the market expected, and planned to reduce the consumption tax on electric vehicles by $31.6 billion.
The world's major economies are also engaged in an arms race for new energy vehicles.
Why is the world paying more and more attention to this industry?
04
Management guru Peter Drucker once summed up automotive products in a phrase when he said that the automotive industry is "The Industry of Industries – Industry within Industry."
What does this mean?
On the synergy of upstream and downstream industries, no industry can be compared with automobiles, and the supporting industries needed by the automotive industry include machine tools, rubber, petroleum, semiconductors, glass, metallurgy, textiles and so on.
We can look at a set of data, 15% of the world's steel, 25% of aluminum, 50% of rubber, 10% of plastic is used in cars every year, not to mention oil.
Commodities and the automotive industry chain are closely related.
The development of the automobile industry can drive the growth of the entire industrial system, and the transition from traditional fuel vehicles to new energy vehicles is equivalent to the transition from the past mobile phone function machine to smart machine, which can drive and innovate the entire industrial chain.
For China, which has cracked down on Internet anti-monopoly and put the real economy in an important position, smart phones have entered the stock market, the growth trend has slowed down, real estate is bound to deleverage, and the increment no longer exists.
So, who is the next number one player?
Of course, new energy vehicles, that is the next economic growth engine.
According to data from the World Bank, there are only 173 cars per 1,000 people in China, which is a huge growth space with 591 in Japan and 837 in the United States.
More importantly, we need to obtain the technological autonomy and market discourse power behind new energy vehicles to complete industrial upgrading.
For example, for traditional vehicles, the engine is the core, and for new energy vehicles, the three electric technologies based on batteries, motors and electronic control are the core.
China is very strong in battery technology, is the world's largest lithium battery producer, but also the largest exporter, the world's top ten lithium batteries, China occupies six seats, lithium battery leader Ningde era market value has exceeded 1.2 trillion.
The motor accounts for 10% of the value of the vehicle.
The raw material manufacturing of the motor requires the use of NdFeB materials as rotors or stators to improve coercivity, and China is the largest rare earth reserve and producer, locking in more than 85% of NdFeB production capacity.
However, in the market, Taiwan's Zhimao Electronics has the advantage, and it has worked with Tesla to develop the motor for three years.
We are now also catching up, and there are also a number of excellent motor companies such as Wolong Electric Drive, Joyson Electronics, and Huichuan Technology, and after Tesla entered China, it promised to purchase 90% of parts nearby, which also brought huge growth space to China's new energy vehicle supply chain.
The last item of the three electric technologies is called electronic control technology, and the electronic control is a little different.
It is a semiconductor blessing that requires MCU and IGBT-based.
At present, there are enterprises involved in this aspect in China, such as BYD's IGBT has been installed, and MCU is mainly based on GigaDevice innovation.
In general, there is still a clear gap, in this regard, we will talk in detail tomorrow about the reasons for the gap between domestic semiconductors and overseas giants.
05
It can be seen that the competition behind new energy vehicles is not only the car itself, but also the industrial chain and core technology behind it.
If we broaden our perspective, behind every human energy change will bring profound changes in the internationalization of currencies. For example, coal is to the pound, oil is to the dollar.
After the Bretton Woods system, the dollar was linked to oil, and the dollar was used where there was oil trading internationally, which was the cornerstone of the dollar's hegemony, and China was also the largest oil importer.
Therefore, there is still a macroeconomic national game in the development of new energy vehicles.
For China, on the one hand, it is necessary to get rid of its dependence on fossil energy, reduce high-emission and energy-consuming enterprises, and vigorously develop green and sustainable energy.
On the other hand, it can also weaken the position of the dollar by promoting the energy revolution, to be precise, reduce the exploitation of the disguised price increase of commodities controlled by foreign capital.
Of course, for our company, this is also a revelation of industrial upgrading, we have experienced the market for technology, now we are using core technology to seize a new market.
No enterprise can stay in the same era forever, small and medium-sized enterprises are good to turn around, large enterprises have strong anti-risk ability, but want to achieve evergreen business, look forward, and make business go further, is the business philosophy that will never change.
