On April 3, the automobile industry ushered in a big news: BYD announced that it would stop the production of fuel vehicles.
BYD released the "Notes on Stopping the Production of Fuel Vehicles". According to the company's strategic development needs, BYD Auto will stop the production of fuel vehicles from March 2022. In the automotive sector, BYD will focus on pure electric and plug-in hybrid vehicles in the future.
BYD has not only become the first traditional car company in China to announce the cessation of the fuel vehicle business, but also the first car company in the world to officially announce the cessation of the production of fuel vehicles.
Why is BYD the first to announce that it will stop producing fuel vehicles? How is the development of new energy vehicles in China at this stage? Can BYD's announcement to stop the sale of fuel vehicles trigger an industry shock? Is the era of new energy vehicles coming?
1 Why did BYD dare to be the first to announce that it would stop producing fuel vehicles?
Why did BYD dare to take the lead in making the decision to stop the fuel vehicle business, and why? What's the bottom line?
The main reason is that BYD's new energy vehicle business has grown significantly, the proportion of traditional fuel vehicle business has declined, and it is leading in new energy technology.
First, BYD is the first brother of China's new energy vehicle brand.
In 2021, the sales volume of BYD's new energy vehicles will exceed 600,000 units, a year-on-year increase of 218.30%, achieving the first domestic sales volume of new energy vehicles for 9 consecutive years. In terms of new energy commercial vehicles, BYD will sell more than 10,000 units in 2021.
The latest market information shows that in the first three months of this year, BYD's new energy vehicle sales reached nearly 300,000, a year-on-year increase of more than 400%.
Second, BYD's leading new energy technology and obvious technological advantages in the entire industry chain.
BYD is the only car company in the world that masters the core technology of the whole industry chain of new energy vehicles such as batteries, motors, electronic controls and chips. Among them, the blade battery is even more advanced. It is rumored that brands such as Tesla and Weilai have taken a fancy to it, and the DM-i hybrid technology is also at the leading level.
Third, since 2020, BYD's fuel vehicle sales have become smaller and smaller.
In 2020, BYD's cumulative sales of passenger vehicles will be 426,000, and the sales of fuel vehicles will be 237,000, accounting for 55% of the total. In 2021, BYD's total passenger car sales will increase by 75.4% over 2020 to 730,000 units, of which about 600,000 new energy vehicles will account for 82% of total sales. There are only 130,000 fuel vehicles, and the proportion has dropped rapidly from 55% in 2020 to 17.8%.
In contrast, BYD's pure electric and plug-in hybrid models have achieved substantial growth. Last year, the cumulative sales of BYD's pure electric and hybrid models reached 320,000 and 272,000 respectively, a year-on-year increase of 144.9% and 467.6%.
Another key point is that BYD's new energy vehicle order reserve is relatively sufficient, which can effectively make up for the loss gap of shutting down the fuel vehicle business.
More importantly, BYD's performance has grown continuously in recent years, with sufficient cash flow and strong confidence.
According to the latest financial report data released by BYD on March 29, BYD will achieve operating income of 216.142 billion yuan in 2021, a year-on-year increase of 38.02%; net profit attributable to shareholders of listed companies is 3.045 billion yuan; net cash flow from operating activities is 654.67 100 million yuan, a year-on-year increase of 44.22%.
BYD became the first car company to officially announce the cessation of the production of fuel vehicles. Although its fuel vehicle business accounts for a small proportion, it is still a source of business income. It would rather cut off the fuel vehicle business in advance, which shows that BYD is indeed a "ruthless man".
2 The rapid development of new energy vehicles in China
Behind the obvious growth of BYD's new energy vehicle sales is the rapid development of China's new energy vehicle market in recent years.
According to the data of the China Automobile Association, in 2021, the domestic automobile production and sales will be 26.082 million and 26.275 million respectively, a year-on-year increase of 3.4% and 3.8% respectively.
Among them, in 2021, the production and sales of new energy vehicles in my country will be 3.545 million and 3.521 million respectively, an increase of 1.6 times year-on-year, and a market share of 13.4%.
In 2021, the sales of new energy vehicles in China will increase by 156% year-on-year, and the market share will increase from 6% in 2020 to 15.7%; the latest data shows that in the first two months of this year, the cumulative sales of new energy vehicles are 765,000, an increase of 1.5 times year-on-year. The market share reached 19.2%.
China's new energy vehicles have ranked first in the world for seven consecutive years, and by 2021, it is equivalent to 1 in every 8 vehicles sold is a new energy vehicle.
Traditional car companies are accelerating the transformation of the new energy track, and the development of new car-making forces is even more rapid. In 2021, the three car companies NIO, Xpeng, and Lili have sold a total of 280,000 new energy vehicles throughout the year, only Tesla. Deliveries in the Chinese market in 2021 will reach 484,130 units.
Although fuel vehicles still occupy most of the market share in the automotive industry, in recent years, the penetration rate of the new energy vehicle market has increased significantly, and the development momentum has been rapid.
Wang Chuanfu, chairman of BYD, said at an auto industry forum at the end of March that the penetration rate of new energy vehicles in my country is expected to reach 35% by the end of 2022.
3 Is the era of new energy vehicles coming?
Does BYD's announcement to stop the production of fuel vehicles mean that the era of new energy vehicles for all people is accelerating?
From the current perspective of the entire automobile industry, fuel vehicles are still the main business and main source of income for traditional car companies, and it is impossible to give up the fuel vehicle business soon.
However, BYD's product share in the field of pure electric and hybrid technology is very high, and the proportion of fuel vehicle business is declining year by year. In the past, BYD's business decisions were relatively stable and traditional, so BYD has the conditions and technology to move to pure electric and hybrid fields. Comprehensive transformation.
Although pure electric is the main direction of the future, plug-in hybrid is also a market that cannot be ignored. Hybrid is a transition for some traditional fuel vehicle customers to switch to pure electric.
Plug-in hybrids have a 50% market share in Europe, but only 18% in China. More than 60% of households in China are still car-free households. Plug-in hybrids can use electricity for short-distance and long-distance oil, so that the first car in the family can be used for gas and electricity.
New energy vehicles are the general trend in the future. At present, BYD has officially announced that it will stop selling fuel vehicles. It is predicted that other car companies will follow up to stop the production of fuel vehicles.
The European Union and Japan have stated that they will ban the sale of fuel vehicles in 2035, while Singapore and Canada have set this time at 2040. According to the "Technical Roadmap 2.0 for Energy Saving and New Energy Vehicles" released in 2020, the sales volume of new energy vehicles in China will account for 50% by around 2030.
Traditional car companies are also embracing electrification. Most domestic car companies are set in 2025, and overseas giants are slightly behind until around 2030. For example, Changan Automobile plans to completely stop the sale of traditional fuel vehicles in 2025; BAIC Group will stop the production and sales of its own brand traditional fuel passenger vehicles in China by 2025.
However, judging from the current development situation, it is still too early for these traditional car companies to stop the sales of fuel vehicles according to the predetermined target.
But on the whole, electric vehicles cannot form a comprehensive and rapid replacement for fuel vehicles. For quite a long time, the two have been in a competitive relationship rather than a substitute relationship.
So on the whole, it will take time to enter the era of new energy vehicles for all people, but it has accelerated!
