Low-speed electric vehicles: Regulations are becoming clearer and it is time for capital to enter the market

"Three months ago, I was an official, and now I am an investor...", Shu Liang, the representative of the investor, said at the Shandong Qihe Lewei Investment Conference. Shu Liang's tone was plain and low-key, without the usual excitement and noise of people in the low-speed industry on such occasions. November 16, 2016, this day may be the starting point for the low-speed electric vehicle industry to open a new era. Three months ago, these three words, government officials, capital, and low-speed electric vehicles, had not appeared at the same time. People saw more of a combination of policies, capital, and new energy high-speed vehicles. Driven by the strong power of capital, it may be announced that the low-speed electric vehicle industry will enter a new stage of gameplay.

According to statistics from the Shandong Automobile Industry Association, Shandong's production of low-speed electric vehicles reached 42,964 in August this year, a 13% increase from 38,075 in July, and a 44% increase from the same period last year. From January to August, Shandong alone produced a total of 330,000 micro electric vehicles . The year-on-year growth rates of Shandong's micro electric vehicle production from 2011 to 2015 were 28%, 56%, 43%, and 78%, respectively. In a period of general downturn in the real economy, an industry that was born from the grassroots, grew up in the cracks, and had almost no policy investment, has achieved such a high growth rate, which is somewhat jaw-dropping.

Previously, electric two-wheelers and three-wheelers have developed a market size of hundreds of billions and have become the economic pillar industries of many local governments. As the second and third electric vehicles enter the mature stage, profit-seeking capital naturally smells the huge potential development space of the fourth electric vehicle. In the past, the biggest obstacle facing investors was the risk of policy uncertainty. Although the final standards and policies have not yet been issued, various signs show that the trend of regulating and legalizing low-speed electric vehicles is gradually becoming clear, which will break the last barrier in front of capital.

On the other hand, with the market development in recent years, some low-speed vehicle manufacturers have completed basic accumulation and capacity building. For example, Yujie has grown from a manufacturer of cable pulling in Qinghe to a low-speed electric vehicle enterprise with an annual production and sales of nearly 60,000 units. Such industry enterprises generally face difficulties when fighting on multiple fronts such as factory construction, vehicle model development, and market investment due to their low starting point in the past or limited self-financing capacity, and they also need new forces to be injected. For capital, this is a valuable depression, and it is obviously a good time to enter the market.

"Of course, you can't be willful with money, but you can do a lot of different things with money." Many of the more than 500 dealers on the scene felt for the first time that a low-speed vehicle factory could be built in this way, which was something they had never seen in the second, third or most fourth-generation electric vehicle factories in the past. For merchants who have frequently visited many large and small low-speed electric vehicle manufacturers in recent years, these have met or even exceeded their psychological expectations for the construction of low-speed electric vehicle factories.

"Our management team is now taking over in full. Many executives of traditional OEMs have given up their annual salaries of millions, or even cut their salaries in half, to join our team..." Shu Liang mentioned that executives from companies such as Great Wall and Geely have officially joined in the fields of R&D, technology, production, and quality, and executives from companies like Volvo are also being contacted. However, this phenomenon of talent backflow makes people feel that even yesterday, it was absurd and almost impossible to happen. When it comes to low-speed vehicles, most employees of traditional car companies sneer at them. Low threshold, low technical content, and low product quality are the first subconscious reactions of almost everyone.

The industry threshold has been greatly raised, and professional and specialized teams have entered in large numbers. Based on this situation, in the low-speed electric vehicle industry, there are fewer and fewer opportunities for grassroots entrepreneurship and counterattacks. This is a cruel fact. The legend of starting from scratch, seizing opportunities in the chaos of the industry, and counterattacking in one fell swoop will gradually disappear. The window is gradually closing, and those low-speed electric vehicle manufacturers who do not have enough background resources and have not had time to build a capability system may miss this wave of opportunities.

"In addition to hardware construction, we have established a research institute. The building you just passed is for the research institute." Shu Liang mentioned that in addition to the newly launched V8S, two models named V7 and LV1 are already in progress. In addition to vehicle technology, Lewei will explore and reserve in multiple technical fields, including intelligent direction, new drive system, and even unmanned driving technology that the low-speed vehicle industry has never dared to think of in the past.

There are many rumors on the Internet about the working idea of ​​"upgrading a batch, standardizing a batch, and eliminating a batch" for low-speed electric vehicles. Regardless of whether it is true or not, the market has begun to operate these tasks invisibly and efficiently. The Matthew effect of the strong getting stronger has begun to appear in the low-speed electric vehicle industry. Leading companies are constantly improving the level of their products, laying out development systems, and at the same time, as their appeal to the upstream supply chain increases, costs are also constantly decreasing, which makes life increasingly difficult for small companies that used to operate in a low-cost manner and screwdriver factories that mainly assemble car shells. In addition, the price of raw materials has skyrocketed at the end of the year, and small manufacturers may not be able to survive this cold winter. Let the market do the market, and the survival of the fittest among companies can be completely completed under this invisible hand, and this process is likely to accelerate after the intervention of capital.

“With the support of capital, there can be new ways to play in the market. We will adopt various methods to pass on the profits to the merchants, and we have enough confidence to reduce prices without reducing quality in the price war. On Double Eleven, we spent 12 million to buy 100 Datongche service vehicles. Today, as long as you go with Le Wei, we will give you..." Shu Liang's words caused the merchants to scream and cheer excitedly.

For low-speed vehicle dealers, all areas such as policies, manufacturers, products, quality, and services are full of uncertainty, which makes them feel anxious every day. They have to work hard to expand the market under such difficult circumstances, and they are also worried that all their efforts and investments will go to waste. However, they are unwilling to give up such a promising industry. The 100 neatly arranged service vehicles on site and Lewei's plan to build 300 service stations have smoothed the merchants' tangled psychological state, which is even more attractive than the plan for new models.

After several years of suffering, dealers have become mature and rational, and have begun to band together for warmth. Merchants who arrived at the scene were busy asking each other for various news and using their mobile phones to scan codes to join the group. Online social tools have accelerated the transmission of information, and the "information gap" between them and manufacturers has gradually narrowed. They are no longer as easily "fooled" as before. For low-speed electric vehicles, a new market game rule and gameplay are slowly emerging. Manufacturers that cannot adapt quickly or have no ability to support may gradually disappear.

"We are still considering the possibility of building multiple brands, not the kind that splits itself, but each one has different genes." Chentao Capital had already started the investigation and layout of low-speed vehicles last year, but it did not surface until this moment. In the future, we may continue to exert the power of capital and try more combinations, so that each brand has independent technical characteristics, as well as its own goals and directions. For example, Lewei has set a goal of being the first in the industry in three years, and some sub-brands will not aim at total volume, such as becoming the first in a certain segment. Form a loose alliance similar to the "Commonwealth", integrate resources in multiple links such as manufacturing, supply chain, and logistics, complement each other's advantages, and break through their respective barriers and bottlenecks.

This description is a situation that has never appeared in the low-speed electric vehicle industry. Applying the current "Dark Forest" theory, the cosmic position of low-speed electric vehicles has been completely exposed, and multi-dimensional attacks are coming. Lewei is just the beginning.

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.