Underrated "Masses": China Enters The Era Of Electric Power With Stock Ratio Liberalization

In China's electric vehicle market, the first shock comes from Tesla, and the second shock will be a joint venture represented by Volkswagen.

In 2021, China's automobile market has entered the era of electric power with the opening of stock ratio. German cars, represented by BMW and Volkswagen, have become the first beneficiaries of this era.

"By 2030, BMW Group will sell more than 7 million electric vehicles." On January 16, the chairman of BMW Group, Mr. zipuce, also said at the forum of China electric vehicle 100 people's meeting (2021).

According to BMW's plan, BMW will launch two important pure electric vehicles in 2021, namely BMW IX and BMW I4. By 2023, BMW will provide 25 electric vehicles to the global market, half of which are pure electric vehicles.

"We believe that after 2030, pure electric vehicles are expected to dominate China and even the global automobile industry." On January 20, Feng Sihan, CEO of Volkswagen Group (China), raised the importance of electric vehicles to a higher level at the 2021 Spring Festival media communication meeting.

According to Feng Sihan, Volkswagen will continue to introduce three ID. models in 2021. According to the plan, by 2025, there will be 15 MEB platform models of various brands of Volkswagen Group to realize localized production in China. At that time, electric vehicles will account for 35% of Volkswagen's product portfolio in China, and it is estimated that about 1.5 million new energy vehicles will be delivered annually.

However, just when BMW and Volkswagen are ready to make efforts, they must face the challenges from Tesla of the United States and "weilaimen" of China. The valuation of new energy concept stocks has been rising one after another, challenging the confidence of traditional automobile enterprises such as Volkswagen and Toyota.

"The valuation of traditional car companies is seriously undervalued." On January 17, Cai Hongping, the "father of China's private capital overseas listing" and chairman of hande industrial promotion capital, stressed in the process of discussing whether the valuation of "new car" enterprises is reasonable at the forum of China electric vehicle 100 people's meeting (2021).

"If you want to build cars, new forces can't do traditional automobile enterprises. No matter calculate power, IGBT or power, traditional car enterprises are not inferior to new car manufacturers. Moreover, due to the large volume and large brand of traditional automobile enterprises, the cost of purchasing will be far lower than that of new car manufacturers. " Cai Hongping believes that traditional auto companies will separate the new energy sector and list on the stock market, and the market value will at least triple.

The electric age of stock ratio liberalization is coming

This is how history is gradually rewritten.

In 2018, an event that is enough to change the trajectory of China's cars has surfaced. BMW, a German luxury brand, became the first beneficiary of China's auto joint venture after its share ratio restrictions were lifted.

On October 11, 2018, BMW Group announced that BMW plans to acquire part of the equity of BMW Brilliance, increasing its shareholding ratio from 50% to 75%. At present, BMW and brilliance have signed relevant agreements.

The public followed. In December 2020, Volkswagen China completed the capital increase of JAC holdings and increased its shareholding of JAC Volkswagen to 75%. JAC Volkswagen was renamed as Volkswagen (Anhui) Co., Ltd. This is the first time that Volkswagen has achieved control of a joint venture in China and has finally achieved its wish.

According to the plan, Volkswagen (Anhui) will also produce MEB platform models. The first vehicle will be launched in 2023, and it is expected to produce 200000-250000 vehicles in 2025.

More than a month later, the Volkswagen Group went to the next city. Volkswagen Group is the second joint venture company in China to break through the stock ratio limit. On January 18, 2021, Audi, Volkswagen Group and FAW of China jointly announced that Audi FAW new energy joint venture will be established in Changchun. Audi and Volkswagen Group will hold 60% of the company's shares and will produce Audi pure electric vehicles based on the electric platform of PPE platform.

"Volkswagen (China) Investment Co., Ltd. holds shares in Audi PPE joint venture, but the main equity and management rights belong to Audi, that is to say, the main decision-making power is Audi brand." In response to VW's shareholding ratio and role in the joint venture, Feng Sihan said in an interview with 21st century economic reporter.

"In China's electric vehicle market, the first shock comes from Tesla, and the second shock will be a joint venture represented by Volkswagen," an automotive industry policy research expert said in an interview with 21st century economic report reporter on January 24

"Volkswagen's great success in the era of fuel vehicles can be partially replicated in the era of electric vehicles, which includes factors such as Volkswagen's brand strength, channels, users and word-of-mouth. Of course, it depends on the public's own determination to change. " The above experts summarized Volkswagen's previous success into three reasons: Volkswagen's strategic vision, early entry into the Chinese market; China's opening-up policy and the huge automobile market; and the third reason is that the Chinese side of the joint venture has made Volkswagen.

With the establishment of VW Anhui and FAW Audi new energy company, Volkswagen, which has achieved equity breakthrough, has entered a new era in China. The electric transformation of Volkswagen in China will also be completed by the new and old four joint ventures.

How to challenge Tesla?

On January 20, the CEO of Volkswagen Group, Herbert diess, posted his first tweet on social media in the US, saying that Volkswagen was catching up with Tesla in terms of market share and had won the consumer battle in Europe.

"Hello, I'm here to make an impact with the Volkswagen Group," dis wrote. In addition, @ elonmunsk, of course, we have to take part of your market share. Our id.3 and e-tron have won the first European market. Looking forward to a fruitful discussion with you

Behind the 62 year old's words is Volkswagen's report card in the field of electric vehicles in 2020.

In 2020, the world-wide delivery of pure electric vehicles of Volkswagen Group will reach 231600, more than three times of the delivery of pure electric vehicles in 2019. The delivery volume of plug-in hybrid electric vehicles reached 190500, up 175% year on year. Volkswagen set 2020 with "substantial progress in the group's electric offensive".

Of course, DIS is not declaring war, but joking with musk, 49. Over the years, the two have maintained a good relationship, and in September 2019, musk tweeted that dis "has done more in electrification than any big car manufacturer.".

Last September, dis also gave musk a test drive of VW's id.3 electric car while he was in Germany inspecting the progress of the Tesla Berlin super factory.

However, the Europeans are not "cold" with Tesla. On the contrary, VW's pure electric vehicles and plug-in hybrid electric vehicles are very popular in Western Europe, with the delivery volume accounting for 10.5% of the group's total delivery volume in the Western European market, which is only 1.9% in 2019.

In fact, the real confrontation between Volkswagen and Tesla is in the Chinese market, because the Chinese market has made Tesla successful, and the competition of electric vehicles is also the most fierce.

"The most easily replaced brand-new electric vehicles launched by Volkswagen in China are the existing fuel vehicle customers of the brand, and some of them are local brands, such as great wall, Geely and BYD. However, the impact on new forces such as Tesla and Weilai may be limited." On January 24, Zheng Fu, global senior partner and vice president of Greater China of Roland Berger, told the 21st century economic reporter.

In the view of Feng Sihan, CEO of VW China, VW has different brand positioning with Tesla and Weilai. "Some Chinese consumers regard Tesla as a luxury car brand, so Audi and Tesla are competitors in terms of brand positioning. The positioning of id.4 is mass production brand model. As a Volkswagen brand, we are always committed to providing more model choices for more consumers and providing them with products with more advanced technology, higher quality, higher safety and durability. "

In fact, the more important thing for the public to challenge Tesla and Weilai is the intensity of transformation in terms of intelligence.

"In view of the current global decoupling trend, we believe that we need to cooperate with local technology companies in China, rather than relying on foreign high-tech companies for technology research and development. Therefore, we will choose more local technology companies to cooperate to develop autopilot technology software for the Chinese market. " As for software, Feng Sihan stressed that "Volkswagen hopes to carry the autopilot software jointly developed with Chinese technology companies in 2023 or 2024."

Balance the masses of the north and the South

In 2020, Volkswagen Group once again became the winner of China's automobile market. "In 2020, we will deliver 3.85 million units, with a market share of 19.3%, and continue to be the first choice for Chinese consumers to buy cars." Feng Sihan said.

However, this year, the two most important joint ventures of the Volkswagen Group in China have run out of a completely different market curve. Among them, FAW-VW's annual sales volume (including imported Audi) increased by 1.5% year-on-year to 2.619 million, becoming the only passenger car enterprise with sales volume exceeding 2 million in China. However, the sales volume of SAIC Volkswagen dropped sharply by 24.79% to 1.555 million vehicles. The gap between the two is obviously widening.

This is not what the public wants. "We hope that the North South joint venture will develop in a balanced way, both in terms of sales volume and market share." Feng Sihan told reporters.

Volkswagen has entered a critical period of digital and electric transformation. Volkswagen is speeding up the layout of China's electric vehicle market. According to the plan, by 2025, Volkswagen plans to launch 15 models based on MEB platform for all brands of the group. By then, the sales volume of new energy vehicles in the Chinese market will reach 1.5 million. In the short term, Volkswagen will also rely mainly on the existing two joint ventures FAW Volkswagen and SAIC Volkswagen in terms of electric transformation.

How can the complex relationship between the north and the south be balanced in the process of transformation? It has become an important topic for the public in China. Whether for SAIC Volkswagen or FAW Volkswagen, the biggest challenge at present is how to promote the electric strategy.

Due to the large sales volume of traditional fuel vehicles, the two vehicle companies are facing extremely severe "double points" assessment pressure. In 2019, the announcement of "double points" announced by the Ministry of industry and information technology shows that FAW Volkswagen ranks first in the negative score list with average fuel consumption score of - 549439 and new energy vehicle score of - 145274. The average fuel consumption score of SAIC Volkswagen is - 191381, and that of new energy vehicles is - 96626.

At present, the price of integral trading is constantly rising, and the integral price of new energy has risen from 200 yuan to nearly 1000 yuan. In other words, Volkswagen's two joint ventures in China need to spend hundreds of millions of yuan to offset the negative points.

Based on the new MEB platform, Volkswagen has launched an electric offensive in China. On January 19, FAW-VW id.4 crozz started pre-sale. Four conventional versions of pure, pure +, pro and prime were launched in the new car. After comprehensive subsidy, the price was RMB 199900-279900. On January 21, SAIC Volkswagen id.4x started pre-sale, and the price range after comprehensive subsidy was 199900-272900 yuan.

In addition to a slight difference in appearance, the two brother models are almost the same in terms of interior, endurance, configuration and price. Volkswagen Dahua has implemented the dual vehicle strategy for many years, which will be staged again in the field of new energy vehicles.

Both SAIC Volkswagen and FAW Volkswagen have high expectations for this car. Jia mingdy, general manager of SAIC Volkswagen Sales Co., Ltd., said in an interview with the media that the sales target of id.4x is five to six thousand vehicles a month.

However, after the release of the two models of cars, there was also controversy. As a compact SUV, these two models are difficult to compete with joint venture brand fuel vehicles with the same price at a price of more than 200000 yuan. In the field of electric vehicles, the price is close to Tesla Model 3, lower than Tesla Model y, Weilai ES6 and other models. However, these two vehicles are medium-sized SUVs. New forces such as Tesla and Weilai also have advantages in automatic driving and performance.

For the north and the south, the electric transformation not only needs to face the cruel market competition, but also seeks more resources in this huge chess game. Although the new car has just been pre sold, a new round of game has already begun.