One stone provoked thousands of waves, and a paper announcement made Byd Company Limited(002594) the first auto enterprise in the world to officially announce the shutdown of fuel vehicles.
On April 3, Byd Company Limited(002594) ( Byd Company Limited(002594) . SZ) officially announced that according to the needs of the company’s strategic development, the whole vehicle production of fuel vehicles will be stopped from March 2022. In the future, in the automotive sector, the company will focus on pure electric and plug-in hybrid vehicles.
Byd Company Limited(002594) said that it would continue to produce and supply fuel automobile parts, and continuously provide perfect service and after-sales guarantee for existing fuel automobile customers, as well as spare parts supply in the whole life cycle.
Although electrification is the general trend, at present, a number of vehicle enterprises, including BBA, have planned the timetable for stopping fuel vehicles and completely transforming new energy, but most of the deadline is between 2025 and 2030. In contrast, Byd Company Limited(002594) “farewell” fuel vehicles have long been followed, but the time and speed are indeed unexpected.
On the one hand, the accelerated development of new energy vehicle industry and the optimistic expectation of Byd Company Limited(002594) have accelerated the process of Byd Company Limited(002594) abandoning fuel vehicles. On the other hand, the price rise of raw materials, chip shortage, tight production capacity, long delivery cycle and other problems are testing many players in 2022. Stopping the sale of fuel vehicles and putting more technology, R & D, capital, personnel and production capacity into new energy vehicles is an important part of Byd Company Limited(002594) winning this increasingly urgent large-scale battle.
From founding Byd Company Limited(002594) in 1994 to entering the battery field, to cross-border automobile manufacturing in 2003, to comprehensively transforming Byd Company Limited(002594) to new energy vehicles in 2014, and then to promoting the “reform” within Byd Company Limited(002594) and the “opening” to the outside world in 2017. Over the past 28 years, Wang Chuanfu, chairman of Byd Company Limited(002594) led Byd Company Limited(002594) to complete gorgeous turns again and again.
As the world’s first auto company to officially announce the shutdown of fuel vehicles, can the myth of Wang Chuanfu making wealth continue? Byd Company Limited(002594) , with a huge volume of new energy vehicles, still faces many challenges. It is difficult to hide the hidden worry that the earnings report will increase revenue without increasing profit. The exploration and layout of intellectualization and high-end are slightly lagging behind. How to find incremental space is the key to Byd Company Limited(002594) breaking through the trillion market value.
production and sales suspension has long been documented
Byd Company Limited(002594) production and sale of fuel vehicles are not groundless.
In June 2021, a Byd Company Limited(002594) internal communication meeting minutes was circulated on the Internet. When asked, “will all the company’s fuel vehicles be completely replaced and discontinued by DMI and DMP in the future?” Byd Company Limited(002594) replied that “the internal sales volume of fuel vehicles this year is expected to be about 150000, and the planning of fuel vehicles in the future has also been stopped. It will be replaced as soon as next year (as long as the monthly production capacity of DMI reaches 80000 and the monthly shipment is 40000).” However, in response to the above meeting minutes, Byd Company Limited(002594) responded that “there is no such plan at present. At present, there is demand from the market and consumers, and there is demand from partner dealers.”
In November 2021, Byd Company Limited(002594) as the only Chinese auto enterprise, signed a letter of commitment with five auto enterprises, including Volvo, Ford, general motors, Mercedes Benz and Jaguar Land Rover, to stop the production of fossil fuel vehicles worldwide by 2040.
It is generally believed in the industry that Byd Company Limited(002594) accelerated withdrawal from the fuel vehicle market has something to do with the rising sales of Byd Company Limited(002594) new energy vehicles since 2021. The sales growth is inseparable from the strategy of adhering to the parallel two routes of DM hybrid and ev pure electricity.
Wang Chuanfu said publicly a few days ago, “if pure electric vehicles focus on solving the need for additional purchase, plug-in hybrid vehicles can effectively solve the demand for first purchase and replacement of more families, and form an obvious substitution effect for the huge stock of fuel vehicle market.”
Byd Company Limited(002594) the latest production and sales express in March showed that the output of new energy vehicles in March was 106700, and the sales volume was 104900. The monthly sales exceeded 100000 for the first time, while the production and sales volume of fuel vehicles were 0 Among them, the sales volume of DM plug-in hybrid models under Byd Company Limited(002594) banner was 50600, with a year-on-year increase of 615.2%; In March, the sales volume of EV pure electric vehicle reached 53600, with a year-on-year increase of 229.2%.
From January to March this year, the cumulative sales volume of Byd Company Limited(002594) fuel vehicles was only 5049, with a year-on-year decrease of 89.78%, accounting for only 1.7% of the total sales volume.
In fact, as early as a year ago, Byd Company Limited(002594) fuel vehicle business gradually contracted. In March 2021, Byd Company Limited(002594) new energy vehicles accounted for 59.33% of the sales volume of traditional fuel vehicles for the first time. Since then, new energy vehicles have made great progress, and the sense of existence of fuel vehicles has been greatly reduced. In 2021, Byd Company Limited(002594) annual sales volume was 730000, including 604000 new energy vehicles, accounting for 81.58%; The sales volume of fuel vehicles was 136300, accounting for 18.4%.
Zhu Yulong, an auto industry expert, said, “at present ( Byd Company Limited(002594) ) this decision does little harm and benefits a lot. It is a good way to play.”
In his opinion, there are three reasons: first, Byd Company Limited(002594) in recent years, the fuel vehicles have maintained a low price, especially the models are old (the special F3 and Surui of fuel vehicles have entered the end of their service life, and the other song series have DM-I and pure electric models). The scale is 200000 left and right. With the rising demand for pure electric and plug-in power, stopping has no economic impact.
Second, from the perspective of the overall sales volume of the brand, Byd Company Limited(002594) broke through the shock of sales volume in the range of 4 Shenzhen Fountain Corporation(000005) 00000 vehicles in 2021 and began to enter the range of 750000 vehicles. The main driving force is that the penetration rate of new energy vehicles began to rise sharply, and Byd Company Limited(002594) also exchanged relatively low gross profit for market share.
Third, globally, it is the transition from traditional fuel vehicles to all new energy brands; From the perspective of government and consumer recognition, pure electric vehicle enterprises are bonus items.
sell the most cars and earn the least money
However, Byd Company Limited(002594) although it sells the most new energy vehicles, it makes the least money. On March 30, Byd Company Limited(002594) released the annual report of fiscal year 2021.
The current operating income increased by 38% year-on-year to RMB 216.14 billion, but the net profit attributable to shareholders of listed companies decreased by 28% year-on-year to RMB 3.045 billion, and the net profit deducted from non net profit fell by 57.53% year-on-year to RMB 1.25 billion.
Among the top three independent brands, in 2021, Great Wall Motor Company Limited(601633) revenue was 136405 billion yuan and net profit was 6.726 billion yuan; Geely Automobile has a revenue of 101.6 billion yuan and a net profit of 4.847 billion yuan Byd Company Limited(002594) revenue is the largest, but net profit is the lowest.
With regard to the double-digit growth of revenue and the decline of net profit by nearly 30% in 2021, Byd Company Limited(002594) insiders told the 21st Century Business Herald reporter: “in 2021, due to the impact of the global epidemic, the electronic business was under short-term pressure; affected by the rising prices of raw materials and bulk commodities, the overall cost of the company increased. During the period, the sales volume of automobile business increased greatly and the profit of automobile sector increased.”
Byd Company Limited(002594) official data show that in 2021, the sales of Byd Company Limited(002594) new cars reached 730000, a year-on-year increase of 75.4%. Among them, the sales volume of new energy vehicles was 593700, with a year-on-year increase of 231.6%, accounting for more than 80%. The cumulative sales volume of pure electric vehicles and DM hybrid vehicles were 320000 and 270000 respectively, with a year-on-year increase of 44.9% and 467.6% respectively.
While the sales volume soared all the way, the gross profit margin of Byd Company Limited(002594) automobile related business decreased by 7.81% to 17.39% year-on-year. In terms of the first and second half of the year, the gross profit margin of automobile business was 19.5% in the first half of 2021, which continued to decline to 16.2% in the second half of the year, down nearly 10% compared with the second half of 2020.
In contrast, the gross profit margin of Tesla‘s automobile business with huge sales volume in 2021 is about 30%, and the gross profit margin of weilaihe ideal automobile, whose annual sales volume has not exceeded 100000, has also exceeded 20%.
Dolphin investment research pointed out in the analysis that the main reasons for the decline of the company’s gross profit margin are, on the one hand, the change of the model structure on the income side and the radical pricing strategy, on the other hand, the price rise of upstream raw materials on the cost side.
In 2022, many players will be tested by problems such as rising prices of raw materials, shortage of chips, tight production capacity and long delivery cycle, and the competition on the new energy vehicle track will become more and more fierce. Stopping the sale of fuel vehicles and putting more technology, R & D, capital, personnel and production capacity into new energy vehicles is an important part of Byd Company Limited(002594) winning this increasingly urgent large-scale war.
At present, the production capacity of Byd Company Limited(002594) is close to the ceiling. According to the data of Byd Company Limited(002594) in the first quarter of this year, its production and sales volume is close to that of Byd Company Limited(002594) and it is basically in the state of full production and sales Byd Company Limited(002594) disclosed in the minutes of investors’ meeting after the release of 2021 financial report that at present, the cumulative undelivered orders of Byd Company Limited(002594) have reached 400000 and are still increasing month by month.
The accelerated development of new energy vehicle industry and the optimistic expectation of Byd Company Limited(002594) have accelerated the process of Byd Company Limited(002594) abandoning fuel vehicles. Wang Chuanfu recently predicted at the forum of China electric vehicle hundred people’s Congress that according to the speed of industry reform in 2021, the penetration rate of Shanxi Guoxin Energy Corporation Limited(600617) vehicles in China is expected to reach 35% by the end of this year.
In addition, it is understood that the sales target of Byd Company Limited(002594) 2022 is conservatively expected to be 1.5 million vehicles. If the supply chain improves, it will impact 2 million vehicles. At present, Byd Company Limited(002594) is actively expanding production. Public information shows that by the end of 2022, the actual available capacity of Byd Company Limited(002594) will reach 1.9 million.
It is worth noting that Byd Company Limited(002594) ‘s full sprint will launch a more intense “fight” with Tesla. In the first quarter of this year, Tesla delivered more than 310000 vehicles worldwide, and the sales volume of Byd Company Limited(002594) new energy vehicles reached 286300, a year-on-year increase of 422.97%, with a gap of less than 30000.
In addition, Byd Company Limited(002594) 2022 annual sales target of 1.5 million has exceeded Tesla. Tesla CEO musk previously said on the earnings conference call that Tesla’s sales will increase by 50% in 2022. According to the sales of 936000 vehicles last year, Tesla’s target in 2022 is 1.4 million vehicles.
high end and intelligent dilemma to be solved
“With the introduction of new models and the expansion of production capacity, the sales volume will further expand in the future. Under the background of both volume and price, the profit is expected to improve.” Byd Company Limited(002594) insiders told the 21st Century Business Herald reporter.
The “price” of “volume and price rise together” refers to the high-end brand in the preparation of Byd Company Limited(002594) and Byd Company Limited(002594) entered the automobile market as a low-end model was once confined to the dilemma of high-end.
It is understood that Byd Company Limited(002594) will rely on two brands to enter the high-end market. One is Tengshi brand, which is positioned in the range of 3 Shenzhen Fountain Corporation(000005) 00000 yuan. Three new models of pure electric multipurpose vehicles, including MPV and SUV, will be launched successively from 2022 to 2023; The other is a brand-new high-end brand of new energy, which is positioned in the price range of 5 Ping An Bank Co.Ltd(000001) million yuan and is expected to be launched in October.
On February 14 this year, Tengshi Automobile Sales Service Co., Ltd., which is 100% owned by Byd Company Limited(002594) obtained the business license. Zhao Changjiang faweibo, director of Byd Company Limited(002594) automobile high-end brand preparation office, said that Byd Company Limited(002594) will soon launch high-end products and services.
Another high-end brand of Byd Company Limited(002594) is also under preparation Li Yunfei, general manager of Byd Company Limited(002594) brand and public relations department, previously told the 21st Century Business Herald that Byd Company Limited(002594) will launch a high-end brand in the second half of 2022. The price range is expected to be more than 5 Ping An Bank Co.Ltd(000001) million yuan. It is brand-new and independent in terms of brand, products, sales service network and operation team. The first model is a hardline off-road vehicle.
In the future, Byd Company Limited(002594) automobile business will be composed of four sections: Wang Chaowang, Haiyang, Tengshi and high-end brands. The main selling models of dynasty series include Qin, Han, Tang, song, yuan and derivative models, basically covering the price range of 10 Fawer Automotive Parts Limited Company(000030) 0000 yuan; The main sales models of Ocean series include dolphins, seals and upcoming warship series.
It is worth mentioning that Byd Company Limited(002594) disclosed in the financial report that this year, song Max DM-I, destroyer 05 and other models equipped with DM-I super hybrid technology have been listed one after another; In terms of pure electric models, after dolphin, yuan plus models equipped with e-platform 3.0 have been listed in February 2022. In the future, more models equipped with e-platform 3.0 will be launched on dynasty.com and ocean.com.
It is worth mentioning that in addition to selling cars, Byd Company Limited(002594) is also cultivating new growth points.
In an interview with the 21st Century Business Herald reporter, Wang Chuanfu said, “it’s not skill for a subsidiary to only earn Byd Company Limited(002594) the money. It’s skill to break down and earn the money from the market, which means that the products are competitive. So we have a market-oriented 1.0 strategy, that is, the division of parts business. Businesses such as motors, batteries and powertrain are sold in the form of business divisions to compete with their peers.”
Byd Company Limited(002594) decides that the first business to open to the outside world is its best asset – power battery.
At present, Byd Company Limited(002594) power battery is mainly carried in its products, but it intends to play the role of supplier.
In April last year, Wang Chuanfu said that he had begun to supply blade batteries outside the whole industry. Among the displayed partners, except for the “red flag”, others were replaced by “secret”. Following the news that last year’s Byd Company Limited(002594) may supply Tesla, this year’s “gossip object” has become Weilai and Xiaomi.
In addition to batteries, it is understood that Byd Company Limited(002594) e platform 3.0 has cooperated with Mercedes Benz, Toyota, Didi, etc.
Electrification is the first half and intelligence is the second half. Compared with Tesla and Wei Xiaoli, a new force in China’s head car making, the Byd Company Limited(002594) in the transformation of traditional car enterprises does not have an advantage in the field of intelligence and automatic driving Byd Company Limited(002594) in the field of intelligent cockpit, there is dilink intelligent network car coupling system and dipilot in the field of intelligent driving.
Dilink has evolved to version 4.0, which mainly relies on Android ecology to download car applications, but the experience is not completely connected with the vehicle. Complaints such as “car machine stuck” are common on social platforms; Dipilot is relatively conservative and difficult to compete with Tesla and Wei Xiaoli.
Byd Company Limited(002594) has taken action on the defect board. At the end of 2021, Byd Company Limited(002594) and momenta established Shenzhen Dipai Zhixing Technology Co., Ltd. to create a high-level intelligent driving solution for the future; In February this year, Byd Company Limited(002594) chose Baidu as its intelligent driving technology supplier, and Baidu will provide Byd Company Limited(002594) with ANP intelligent driving products and man-machine driving map Integrating Transportation and parking; In the same month Byd Company Limited(002594) also invested in the laser radar enterprise Suteng juchuang; In the first half of the year, Weida announced that it will cooperate with Yingda in the field of intelligent driving technology from the first half of 2023 to 2024. In addition, Byd Company Limited(002594) is also cooperating with Huawei MDC. It is reported that the seal to be launched by Byd Company Limited(002594) will carry Huawei MDC.
It is not difficult to see that Byd Company Limited(002594) ‘s intelligent driving path is becoming clearer and clearer. In the short term, it will quickly fill the short board through the supplier procurement scheme, and recruit and reserve a large number of relevant talents in the field of intelligent driving. In the future, it may also embark on the road of self-study. After all, it is not a long-term plan to hand over all the “soul” to the supplier.
In the first half of the electrification competition, Byd Company Limited(002594) gained certain advantages by virtue of the advantages of DM-I super hybrid, blade battery and other fields. In the more intense intelligent competition in the second half, can Byd Company Limited(002594) write a legend?
