Introduction
Wuling is a car manufacturer which has emerged from the strategy of pushing cars into rural areas. This time, the Wuling Hongguang Mini EV with a range of 120km is priced at CNY 29,800. This opens up a very unique path for the evolution of electric vehicles in the era of subsidies, to go to rural areas and lower the price, allowing consumers to balance range and price, and enjoy the benefits of low usage costs as soon as possible.
Of course, this car is a huge challenge for all other A00 BEVs, but for Wuling, it plays a very good role in reducing oil consumption.
Demand for Electric Vehicles in Rural Markets
A recent research report by the Hundred People’s Association surveyed 1634 people online and 220 people offline. There are some conclusions in this report that can be referred to:
1) In rural areas, the promotion of electric vehicles is aimed at consumers with an annual income of 50,000 yuan, a daily travel demand of 30 kilometers, and a long-distance travel demand of 150 kilometers.
2) The demand of rural consumers for electric vehicles is diverse, but the core is to save money and do not use fuel. In the current economic environment, saving money is the fundamental need.
3) Rural consumers have a direct demand for electric vehicles with a range of 300 kilometers, and the corresponding price is 70,000 yuan. In fact, this demand will be adjusted when balancing range and price.
What products can we use to develop rural markets?
In the A00 level of electric vehicles, before the 2017 subsidy policy adjustment and the rise of the 2B ride-hailing market towards high range, it was the absolute leader in China, mainly based on subsidies. Therefore, we can see that most of the models provided are based on the range of 250-300 kilometers in the 2019 subsidy policy.
The Hongguang MINI EV uses a small battery, so it adopts the ternary lithium battery with a battery capacity of about 9.2 kWh (96 V & 94 Ah, energy density 100 Wh/kg) for the 120 km version, and about 13.8 kWh (96 V & 144 Ah, energy density 110 Wh/kg) for the 170 km version. This is completely cost-driven in terms of trimming and design.
The design of this package can be traced back to what Zhidou previously did, which is fully enclosed, low-voltage system, and a very small battery. I think Wuling took out the part that was cut off during the experimental process of subsidies requirements for the batteries of the Baojun E100 and E200 that were previously done, and the battery announced by Wuling for Baojun was like this.
Wuling engineers started experimenting from 8 kWh and 81 km, and then 11.5 kWh and 300 km, and this time they chose two points of 120 km and 170 km. It can be predicted that according to the needs of different markets, various regions can be tried within the two sections of 100-150 km and 150-200 km to find the optimal solution.
Conclusion
Talking with Chaozi this year, there is still a great demand for lithium-ion battery electrification for two-wheeled vehicles, especially for shared electric bicycles based on battery swapping. In a sense, the path of electrifying electric vehicles will be very long, and companies like Wuling, which do not rely on subsidies in a sub-market and depend on their own Lianzhou mode experimental experience and extreme cost control, can really develop a market.
Of course, it is difficult to earn money from all the components in this market, as they are all in a low-profit state. But I believe that electric vehicles themselves are a low-profit business, and gradually letting policies withdraw will stabilize the industry.
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.