Editorial: China'S New Energy Automotive Industry Needs To Prove Itself In Competition.

Tesla made domestically and seized the market through price cuts, which undoubtedly played a "catfish effect" for domestic new energy vehicles. It has both positive and negative impact on the domestic supply chain enterprises and the domestic vehicle. Taking into account the decline in subsidies has led to the decline in sales of new energy vehicles in China, while Tesla sales increased sharply under the stimulation of price, undoubtedly formed a double blow to domestic vehicle enterprises.

China has the largest number of new energy vehicle groups in the world. It is also the first country to make new energy vehicles from the policy force. The main reason is that China has failed in the field of traditional car market technology, and has the largest market in the world, but the competitiveness of domestic vehicles is weak. Therefore, China focuses on the development of new energy vehicles and wants to overtake corners in this area.

At present, China's new energy automotive enterprises can be divided into three camps: traditional independent brand, new Internet power and foreign brand. Foreign brands are in the initial stage, and have strong financial resources and brand influence. Therefore, it is not yet possible to judge the impact on them. But in the US luxury car market, Tesla is competing against traditional car companies.

At present, the biggest challenge is the new driving force. Including Wei Lai, Xiaopeng, Wei Ma, ideal and so on. Apart from Xiaopeng has been relatively stable, most of the others have just realized mass production delivery, and have not yet undergone market inspection. Compared with traditional brands, these enterprises have advantages in automobile design, brand building and intellectualization. Most of them are following and following Tesla. But the disadvantages are also obvious, that is, lack of capital and core technology. If Tesla continues to cut prices (around 250 thousand yuan), these enterprises will have to be cheaper to have market, but they have not yet realized mass production and the cost is still high.

Most of the traditional brands of new energy vehicles come from traditional automobile enterprises, including BYD, SAIC, Beiqi, Geely, Changan, Jianghuai, the Great Wall, Chery, Guangzhou automobile and Huachen. Although they have certain capital and technological advantages, and have a certain market scale, they can also use the existing sales channels and after-sales service systems, but they are still traditional vehicle enterprises in terms of vehicle design, production and brand building. Compared with Tesla, the new force of car manufacturing, the products are not cool, the future is not enough, and the attraction is not high. Moreover, most of these vehicles are government procurement, leasing companies and other group customers. If Tesla launches full product line in China, high school low and SUV products may have a greater impact on these enterprises.

It can be seen that the concept of new driving force is similar to that of traditional domestic brand enterprises, mainly due to the appearance and some additional functions of the automobile, but the core technology is seriously inadequate. The traditional independent brand new energy vehicle is still the product of "traditional enterprise" culture. The technology is not enough, the vehicle type is not advanced enough, and the brand image is not enough.

BYD is a relatively special company in China's new energy vehicles. BYD has long been the most widely sold new energy vehicle in the world, but it was overtaken by Tesla in 2019, and sales fell by 7.39% in 2019 as a result of subsidised subsidies. As a private enterprise, BYD is a technology-based enterprise, starting from lithium battery, becoming a new energy vehicle company with all key technologies and full product line, and has a high brand influence. The technology and experience accumulated over the years are not owned by other partners including Tesla. Because of this, Mercedes Benz and TOYOTA have chosen to cooperate with BYD in the production of new energy vehicles.

But BYD is relatively conservative. For example, although its power battery started earlier, it was mainly used for its own use. As a rising star, the Ningde era has occupied about 52% of the domestic market. If BYD's core components are opened to the market as early as possible and occupy more markets, the cost of vehicle production will be greatly reduced. In addition, BYD has received more subsidies in the past, more debt accumulation, but less profit, if the gradual reduction of subsidies, BYD's capital chain will have a relatively big impact.

The biggest uncertainty comes from the real estate car making force, mainly based on Hengda and Bao energy. Hengda is known to invest hundreds of millions of dollars to build Hengda's car manufacturing industry chain, with an annual output of 1 million vehicles, making it the largest and most powerful new energy vehicle group in the world in 3 to 5 years. However, in the face of more intense competition in the market, it is still uncertain whether enterprises can acquire competitive products by acquiring M & A and technology, and more importantly, whether the capital chain can meet the demand of continuous burning money.

Therefore, the main challenge for China's new energy automotive enterprises is whether the enterprises will have sufficient capital support in the context of declining sales, subsiding subsidise, lack of profits and overseas car companies' efforts to seize the market. Whether they are new drivers of cars, BYD or Hengda will face this pressing problem.