Domestic cars are overtaking joint venture brands, and new energy battery services have become a landmark turning point

Thanks to the booming new energy industry, Chinese auto brands have overtaken joint venture brands for the first time.

Although traditional internal combustion engine vehicles are still the mainstream of the market, in the long run, new energy vehicles are far superior to them in terms of power, energy utilization, cost, etc. For example, the energy utilization rate of even the best internal combustion engine vehicles is only 40%, while the energy utilization rate of electric motors can easily reach about 90%.

The reason why electric vehicles are still not accepted by the market is mainly because the shortcomings of battery energy storage are too great. In other words, batteries have become a roadblock to the popularization of new energy vehicles. The energy density of each kilogram of gasoline is about 47.3MJ, while the energy density of each kilogram of lithium-ion battery is only 0.72MJ. The energy of a fully charged 100kg lithium battery is less than the energy of 2kg of gasoline. Therefore, even though the energy utilization rate of gasoline vehicles is much lower than that of electric vehicles, it has the exponential advantage of ultra-high energy density, coupled with a large fuel tank and convenient refueling methods, so that gasoline vehicles have never had mileage anxiety.

New energy vehicles are different. Range anxiety has been ingrained in their genes since their birth. Even Tesla's "Model 3" has a range of only 668 kilometers. Considering that most of the data promoted by car companies are "laboratory data", driving habits and road conditions are more complicated when actually on the road. Therefore, few users can reach the range claimed by car companies.

Secondly, unlike the "physical watering" charging method of gasoline vehicles, the chemical charging method of electric vehicles is also more time-consuming.

Although various manufacturers are currently developing fast charging technology, in order to protect the battery, most manufacturers will turn off fast charging after the battery is charged to 80%. For example, the Tesla long-range rear-wheel drive version of the Model 3 only takes 26 minutes to charge from 6% to 80%, but it takes nearly an hour to fully charge.

Especially considering that users need to reserve some electricity to find charging piles, the time cost of this charging method is very high in actual use, which means that the mileage of new energy vehicle batteries can only be "cut off", and mileage anxiety becomes more and more urgent.

More importantly, due to the degradation of new energy vehicle batteries, it is not as easy to see the quality of new energy vehicles in the second-hand car market as internal combustion engines, so the value retention rate is also very low. According to data released by the China Automobile Finance and Value Retention Rate Research Committee in 2019, the average value retention rate of new energy vehicles in four years is only about 20%, while the average value retention rate of mainstream A-class cars in four years is close to 60%.

In the final analysis, new energy vehicles have more room for imagination in terms of general direction and technical route compared to fuel vehicles, but it is because the battery technology is too disappointing that it is seriously lagging behind in use. How to solve this problem? Changing charging to battery replacement is a better solution to the current range anxiety. For example, Weilai has recently started to promote this matter. In fact, if this matter is successfully implemented, its significance will be tantamount to reinventing electric vehicles, and it will also greatly advance the schedule for domestic cars to overtake joint venture brands.

At the Q1 2020 earnings conference, NIO CEO Li Bin said that he plans to set up a battery asset management company, implement the "battery as a service" strategy, and gradually achieve complete vehicle-battery separation in the fall of 2020. To give a simple example, buying a traditional new energy vehicle is like spending money to pull a network cable from an unknown operator. Users have to make a high investment and bear the risk of the operator's inaction during the use period. NIO's "battery as a service" is similar to the monthly rental of a mobile phone. Not only is the cost of use lower, but the risk is also smaller.

Overtaking joint venture brands is just around the corner

Although at first glance, NIO's "battery as a service" is just a minor move by a company, but at the macro level, it can be regarded as a phased result of my country's efforts to promote the development of the new energy vehicle industry.

Let’s not talk about the determination of China’s new energy industry when it proposed the “three verticals and three horizontals” in the early 20th century, but only look at the favorable policies for “battery as a service” in the past two years.

In April 2020, although the "Notice on Improving the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles" limited the subsidized price of new energy passenger vehicles to 300,000 yuan, it made special arrangements for NIO, which sells its vehicles for more than 300,000 yuan and focuses on battery swapping. On July 23, Xin Guobin, Vice Minister of the Ministry of Industry and Information Technology, said that in the future, the construction of infrastructure related to charging and battery swapping will be vigorously promoted, and car companies will be encouraged to launch models with battery swapping modes.

On the other hand, although the battery swap model can alleviate users' anxiety in the long term, it will bring very heavy capital and technical pressure to car companies in the short term.

Therefore, it is reported that the well-known power battery manufacturer CATL will become an investor in NIO Battery Assets. Although CATL's investment in NIO Battery Assets is related to the fact that NIO is a customer of CATL, in June 2019, CATL and Ant Financial jointly invested 1 billion yuan to establish an electric bicycle battery joint venture in an attempt to bring a battery replacement model to two-wheeled electric vehicles, which still shows us CATL's determination to become a battery operator.

Interestingly, Zeng Yuqun, who originally supplied lithium batteries to Apple, founded CATL in 2011 after seeing the favorable policies for the new energy vehicle industry.

Taking "battery as a service" as the entry point, although we see that each company is taking its own path, if we look at the actions at the macro level, we can see that there have always been policies behind these companies, either directly or indirectly promoting them.

If we still cannot see the advantages of the new energy vehicle industry driven by policies from just one market or one business, then a simple comparison with the once-powerful joint venture brands will make this advantage clear at a glance.

In 2018, Audi released its first pure electric SUV, the Audi e-tron, with a minimum price of 700,000 yuan. But recently, the Audi e-tron has quietly dropped its price to 454,800 yuan, which is in the same price range as NIO. In other words, in the new energy market, joint venture brands are forced to catch up with domestic brands. Although domestic auto brands currently only affect joint venture brands in the new energy field, considering the long-term nature of new energy vehicles and the favorable policies of our country, the long-term advantages brought by the macro supply chain, it is inevitable that our auto industry will surpass foreign automakers in the near future.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.