[for BYD, which is self-sufficient in battery, motor and electronic control, it is so difficult to make money from electric vehicles, but it is even more difficult for new car manufacturers. 】
Tesla, founded in 2003, and BYD, which has been building a green dream since 2005, have been fighting a “protracted war” for profit, and have become “old drivers” from “small fresh meat” of electric vehicles. Last year, Tesla surpassed BYD’s 229500 by 367500. In the first half of 2020, Tesla has made profits for two consecutive quarters, and is expected to make profits for the first time in the whole year. BYD has never separately disclosed the profitability of the new energy vehicle sector, and whether it can make money has always been a mystery.
due to the sharp decline of domestic subsidies, BYD has been the world’s top new energy vehicle sales for four consecutive years since 2015. Its net profit reached a peak of 5.044 billion yuan in 2016, and then decreased year by year. In 2019, the net profit was 1.6 billion yuan, down 41.93% year-on-year. In the first quarter of 2020, the net profit was 113 million yuan, a year-on-year decrease of 84.98%. BYD has been receiving subsidies continuously. Among them, BYD announced on May 22 last year that it had received about 3.458 billion yuan of subsidies for the promotion of new energy vehicles. Since this year, BYD has also received 1.342 billion yuan of central financial subsidies for the promotion and application of new energy vehicles in 2017 transferred by Pingshan District Finance Bureau of Shenzhen.
in the first seven months of this year, BYD’s cumulative sales of new energy passenger vehicles were only 71200, down 54.55% year-on-year. An automobile chief analyst of a securities company told the first finance and economics reporter that after deducting subsidies, BYD electric vehicles should still not make money, because the profits are obviously not as much as subsidies. The new energy vehicles of automobile enterprises basically need to achieve annual sales of more than 300000 vehicles in order to show economies of scale. Otherwise, they will still lose money without government subsidies.
Why is it difficult to make money without subsidizing electric vehicles? This can be seen from the scale and cost of electric vehicles. According to the data released by EV sales website, in 2019, the global sales of electric vehicles will be 2.21 million, and in the first half of 2020, the cumulative sales of new energy passenger vehicles will be 947100. In the first half of this year, the cumulative sales of new energy vehicles in China reached 393000, down 37.4% year on year.
because of the scale, the cost of electric vehicles remains high. CITIC Securities recently calculated the single vehicle cost of BYD Tang ev600 model. The cost of the single vehicle was 242700 yuan, including 74000 yuan of battery pack cost, accounting for 30.49% of the total cost, 54000 yuan of motor and electric drive cost, accounting for 22.25%. Several core components together account for more than half of the cost of electric vehicles.
when the first finance reporter asked BYD for confirmation, the reply from relevant people of BYD was that different third-party institutions have different analytical methods and standards, and the company does not comment on this. However, it is indeed the battery that accounts for the majority of the pure tram cost. The data of other projects are changing at any time with the technological change, the development of upstream and downstream production lines, market supply and demand and other factors.
for BYD, which is self-sufficient in battery, motor and electronic control, it is so difficult to make money from electric vehicles, but it is even more difficult for new car manufacturers. Lin MI, CEO of Yundu new energy vehicles, said recently in an interview with the first finance and economics reporter that it is unrealistic for a new car manufacturing enterprise to make profits in three or five years. However, the return of car making is a business. The core of the business is that the enterprise must generate positive cash flow and profit. But now, the state of new car manufacturing enterprises may be more likely to burn money and then burn money, which is not Yundu’s orientation.
Lin Mi stressed that there are several things to be achieved from the technical level. The first thing is to have modular design, and the general rate should be raised. There are multiple vehicles for one platform and one chassis to be amortised. This needs to be fully taken into account before the strategy is determined. It is necessary to consider the cost of electric vehicles and the sales price. It is impossible to sell endlessly at a loss.
at present, Xiaopeng automobile is the only company among the new forces to develop two platforms at the same time and develop SUV and sedan models based on this. In the future, Xiaopeng automobile can quickly launch new models on the chassis structure of a + B two platforms. Fu Zhenxing, chief technical officer of Yundu, said that the company is also developing a highly modular vehicle architecture platform, covering class A to class B vehicles, and basically covering all the models currently planned by Yundu.
Yundu, established in December 2015, is a new mixed ownership vehicle manufacturing force enterprise jointly established by Fujian Automobile Industry Group Co., Ltd., Putian state owned Assets Investment Co., Ltd. Different from the start-up of many new forces, Yundu, with the support of state-owned assets, has quickly solved the difficulties of land use, qualification and capital. In 2017, it became the first new power vehicle manufacturing enterprise to obtain the production qualification of pure electric passenger cars. In October of the same year, Yundu launched its first new energy vehicle “π 1”. In 2018, Yundu completed the sales of 9300 vehicles, becoming the earliest and more delivered enterprise among the new forces enterprises. In novel coronavirus pneumonia, the sales volume of the cloud type vehicle was increased.
Yundu insiders told the first finance and economics reporter that Yundu capital with state-owned assets background was stable, and the main reason why it was in trouble before was management problems. In May this year, Lin MI, who had left the company, returned to work, set up a new team, promoted the resumption of work and production, and started a second venture to return to the track.
Unlike the head enterprises that have obtained the food, grass and ammunition through financing channels such as listing, the window period left by the market for non head new car manufacturing enterprises such as Yundu is more urgent. Lin Mi said that Yundu’s competitors are not other new car manufacturers, but to grab the cake of fuel vehicles. In the next few years, Yundu will strengthen the channel sinking, and based on this, promote the strategy of “trams going to the countryside” and continue to cultivate the Fujian market.
Zhan Wenwen, senior vice president of Yundu, said: “in terms of quantity, I have roughly calculated how to make profits. This figure is not necessarily accurate. As an enterprise like ours, its scale is not large. When there are 230000 vehicles sold in the market a year, we have already entered the break even point.”
according to the Research Report of Soochow securities, from the perspective of Tesla’s development path, if the new automobile manufacturing force wants to survive, it needs to achieve annual sales of 30000-40000 vehicles; the annual sales volume of 70000-100000 vehicles determines whether it can make profits; the annual sales volume of 150000-200000 vehicles determines whether it can be self-sufficient in cash flow. Compared with Tesla, at present, domestic new car manufacturing forces are in the stage from 2014 to 2015, with annual sales of 10000-30000 vehicles. After competition, 3-5 new car manufacturing forces will survive.
in order to survive, the new forces of car manufacturing enterprises must fight fiercely in capital, technology, products, marketing, service and management in the future. In the list of hundreds of new automobile manufacturing enterprises competing for “survival”, the top enterprises are generally considered to have a higher survival rate.
Wang Xingzeng, the founder of meituan, predicted that there were three left in the new domestic automobile manufacturing forces, namely, Weilai, ideality and Xiaopeng. It just happens that the top three of the new automobile manufacturing forces in his heart are about to join forces in the US stock market, and with the help of capital strength, they will fight a hard battle with Tesla and the traditional automobile giants at home and abroad.