On the morning of November 22nd, ARCFOX unveiled three car models and the world’s first commercially available IMC intelligent modular framework equipped with 5G technology at Hall 1.2 in Zone A of the Guangzhou Auto Show.
In front of the stage was the ARCFOX ECF concept car, with the production model set to be delivered in 2020. On the side of the stage was an ARCFOX-GT street version with 4 motors and a maximum power output of 1200 kW, and an ARCFOX-GT racing version with 6 motors and a maximum power output of 750 kW. Interestingly, although they have different configurations, the two cars have the same acceleration of 2.59 seconds per 100 kilometers. Furthermore, the street version with 4 motors has a higher power output than the racing version with 6 motors.
It’s worth mentioning that although the NIO EP9 is ahead of it, the ARCFOX street version is a car that can really hit the road. The GT model conforms to the international level electric vehicle race specifications certified by FIA, but it has not yet obtained FIA’s official certification, so we have not seen how well the GT model performs on the track.
ARCFOX’s main focus is on mainstream models based on the ARCFOX ECF, with the GT model leading the way. In the product plan previously announced, the ARCFOX ECF is expected to be launched in the second quarter of 2020, and three more car models will be launched subsequently.
In other words, ARCFOX has chosen a product strategy that has been tested by Tesla and NIO, launching a niche luxury electric sports car first to establish a brand benchmark, and then launching mainstream electric car models to compete in the market. The key difference between ARCFOX and the previous two is that ARCFOX is not a brand new company, as it has the support of BAIC and has teamed up with other companies such as Daimler, Huawei, Magna, and CATL.
Now is the best time to launch a new brand. But what is the best time to enter the market? The answer is undoubtedly when entering an underserved and rapidly growing segment. However, things in the world are never that perfect. Starting from 2018, the Chinese auto market began to experience negative growth. In 2019, the market continued to decline, with sales of lower-end models suffering while luxury models continued to show growth. From January to October 2019, sales of new energy vehicles grew by 10.1% YoY. However, in the second half of the year, when the government subsidy was reduced, the monthly sales volume continued to decline compared to the same period last year.In the context of the entire industry’s structural transformation, Beiqi sees an opportunity. According to Lian Qingfeng, Vice Secretary of the Party Committee of Beiqi New Energy and Spokesperson, this is a good time. The domestic market was educated early enough, and after more than a decade, the public’s recognition of new energy vehicles has continuously increased. In this new field of new energy vehicles, international brands may not be able to continue their past advantages, and the public still needs to see the actual product performance.
As in a quote from ” Game of Thrones”, “Chaos is a ladder,” chaos is an opportunity.
Players in the market are gradually divided into two factions: one is represented by emerging car companies starting from scratch, such as Tesla, and the other is the traditional camp represented by brands such as Mercedes-Benz, Audi, Volkswagen, Beiqi, and GAC.
What opportunities can ARCFOX bring?
The Strong Backing and Multiple Supports
In January 2019, Ren Zhengfei accepted an interview with CCTV’s “Face to Face” and mentioned for the first time that Huawei will never cross the boundary to produce cars, but will focus on its own technology to improve the vehicle’s networking and autonomous driving capabilities. On May 29, 2019, Huawei announced the establishment of its Intelligent Automotive Solutions Business Unit.
In Huawei’s internal notification, it was stated as follows:
“The key technologies of the automotive industry are shifting from mechanics to ICT. The digitalization and intelligentization of automobiles have become the key battlefield for ICT technology leaders. In order to seize this critical historical opportunity, extend the ICT technology advantages accumulated by Huawei in the past 30 years to the intelligent automobile industry, become an incremental ICT component supplier for intelligent vehicles, and focus on ICT technology, to help automakers build better cars, the company decided at the Sanya Conference: Huawei will not produce cars.”
Huawei’s choice to become a core technology supplier is not surprising, but for Tier 1, sales of packaged solutions are only a basic business problem. To become a world-class Tier 1 supplier, the choice of core strategic partners is extremely important. The critical demonstration effect can help companies quickly occupy a leading position in technological transformation.
Huawei has chosen Beiqi, to enter into deep integration in technology research and development, product innovation, and intelligent transformation. Beiqi and Huawei have jointly established the Davidson Innovation Laboratory, aiming to integrate Huawei’s 5G technology and intelligent networked and unmanned driving technologies integrated in recent years in automatic driving, artificial intelligence, etc. into ARCFOX’s platform.According to ARCFOX, this is the world’s first commercial platform featuring 5G technology. Its hardware configuration includes three sets of LiDAR, six sets of millimeter-wave radar, 12 sets of ultrasonic radar, and 13 groups of high-definition cameras. The platform’s chip computing power is 352 Tops, and it retains dual-redundant steering and braking structures. In comparison, Tesla’s full self-driving chip computing power is 144 Tops.
In addition to Huawei, ARCFOX and Magna have jointly built a 1.4 million square meter factory in Zhenjiang, employing 2,200 workers with a maximum production capacity of 180,000 vehicles. ARCFOX has also cooperated with CATL in the development of CTP battery pack technology, adopting Daimler’s three-electricity verification standards, and equipped with SKI’s 811 high-performance all-weather batteries, among others.
With its powerful hardware configuration and supply chain endorsement that is not inferior to other manufacturers, ARCFOX has come on strong.
Lian Qingfeng stated that to achieve upward brand positioning, it is not only necessary to have no shortcomings as a whole, but also to fully surpass in all aspects. It’s challenging for a new company to make a breakthrough in one or two modules just on system integration, three-electricity technology, and automatic driving. How can it fully surpass in all aspects?
I found a convincing answer in ARCFOX’s explanation: Apart from using the best resources and technologies, the most important thing is to have the ability to wage price wars.
Being the first in the country to obtain a new energy vehicle license plate, the only national new energy vehicle technology innovation center, a test and validation center with an investment of 2 billion, and R&D resources such as 450,000 pure electric vehicle production experience and the total mileage data of 9.2 billion vehicles.
ARCFOX’s relationship with suppliers is not only a traditional supply relationship, but also a deep binding of supply chain relationships at the capital level. As new energy vehicles have developed to today, the vertical supply chain integration led by Tesla has brought more thinking on the reshaping of supply chain value relationships to the industry. New business opportunities in automotive operations and retail terminals are also quietly emerging.
Boundless and timeless, the business opportunities behind new retail are the digital transformation of the entire industry.On November 22nd, ARCFOX announced its “Unbounded Ecosystem” business model. “ARCFOX is committed to disruptive innovation in both model and ecosystem, projecting the future vision of travel for us,” said Xu Heyi, Chairman of BAIC Group. The model is centered around user experience and provides services to the brand’s retail and operational ends by establishing a holistic digital operational management platform. According to Yu Chen, Vice General Manager of BAIC New Energy Marketing Company and General Manager of ARCFOX Business Unit, the entire ARCFOX system is currently undergoing digital transformation and is collaborating with Accenture to share in this digital renovation.
In terms of its distribution channels, ARCFOX plans to begin recruiting across the country at the end of this year. Currently, Penglong Hang is helping ARCFOX build stores in key provinces and cities throughout the country. ARCFOX will adopt a hybrid direct sales and 4S distribution model, planning to build more than 100 highly digitized physical stores in two years, including dealerships divided by function and brand experience-centered manufacturer direct stores.
Yu Chen explained that they use a light-asset hybrid strategy, which not only includes light-asset manufacturers but also light-asset distributors.
Why is it called a light-asset distributor? The real meaning is to help distributors open up new profit channels and better integrate into the era of travel.
This brings us to the GENIUS platform plan from the ARCFOX Unbounded Ecosystem, which consists of six business modules represented by the six letters of the word GENIUS.
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G, Go Convenient travel, including pick-up and drop-off and substitute vehicle services;
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E, Energy Abundant energy, including public piles charging, private piles sharing, on-site charging, Wei Lan super charging, battery swapping and battery recycling services;
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N, Network Intelligent network, including APP malls, factory pre-installation, traffic service, remote control, ID cross-scene experience, OTA remote upgrading services;
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I, Interaction Close connection, including lease-back, financial services, personalized products, used car replacement, and car-power separation services;
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U, Use Worry-free use of vehicles, including maintenance, repair, extended warranties, insurance, and road rescue services.
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S, Style Colorful life, including self-made boutique, co-branded products, third-party rights, self-owned rights, SPACE rights, CLUB points sharing.The six business modules cover six major scenarios, namely transportation, electricity usage, connected cars, car buying, maintenance, and daily life. The resources that ARCFOX seeks to integrate include Huaxia Chuxing, Qingxiang Chuxing, Jingju New Energy, BAIC TELD, BAIC Zhihui, and Bluemountain Energy. It is worth noting that these are all existing subsidiary resources of BAIC Group, and thus require only business collaboration without the need for new development, which can lead to more efficient service scheduling.
As Yu Chen pointed out, we have found that our existing resources have the ability to launch a service platform, just like the App Store. Our platform includes various services such as transportation, long-distance pick-up and delivery, door-to-door service, and valet service. We have the confidence to include all kinds of possible services on our platform.
Today, service capabilities have become a major bottleneck for independent brands to break through. NIO has achieved service excellence, while both BAIC and NIO advocate “charging is more convenient than refueling” and plan to build more than 100 battery swapping stations, gradually expanding to private vehicles and shortening the battery swapping time from 3 minutes to 1.5 minutes.
Although the GENIUS Plan appears to add new business content as value-added services for dealers, the underlying change is a three-party service relationship among manufacturers, dealers, and customers. Business and customer relationships are no longer simply limited to sales; a greater number of service scenarios occur afterwards, where the interactive interface of these scenes is no longer limited to just physical stores but could possibly include mobile apps, vehicle systems, or even WeChat mini-programs.
Only by recognizing this can we truly understand what digital transformation is and the true significance of putting user experience at the center of it.
The boundaries of physical space have been broken. Interactions occur between manufacturers and customers continuously. “Boundaryless ecology” is a term used appropriately here.* EU5 to be launched in October: the rematch of BAIC New Energy
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.