*This article is reproduced from the autocarweekly public account.
Author: Joey
In the era of pure electric vehicles, the market structure of luxury cars is being reshaped.
Not long ago, Volkswagen CEO Herbert Diess invited Tesla CEO Elon Musk to participate in a high-level meeting at Volkswagen via video link, and asked him about the issues related to why Tesla is more flexible than traditional car brands.
Clearly, faced with Tesla and the rapid rise of new pure electric car brands represented by Tesla, giants such as Volkswagen have already become restless.
In fact, this situation is not only happening to Volkswagen.
In 2009, China became the world’s largest consumer market for automobiles. In 2020, a total of 25.311 million cars were sold in the Chinese market, of which 3.46 million were luxury brand cars. In the past, Chinese car brands were not visible in the sales camp of luxury brands. However, the situation did change this year.
The Hongqi brand, which has always existed as a totem and did not expect sales, surpassed sales of 200,000 cars in 2020 (almost the same as last year in the first three quarters); in the field of luxury electric vehicles, NIO and Ideals also finally have their own names this year.
But, this is still not enough. The Chinese car industry and Chinese car market need more luxury Chinese car brands that can compete with foreign brands in the pure electric category in the 500,000 RMB and above range. If in the past, this was just a beautiful wish, then this situation has already happened today.
In September this year, a car brand achieved this “small goal”. The high-tech HiPhi X surpassed the Porsche Taycan by 56 vehicles, with a total of 641 vehicles sold, successfully topping the monthly sales champion in the electric car market for luxury brands costing more than 500,000 RMB. In fact, the top-equipped 804 sedan model of HiPhi has officially started mass production and delivery in September, with orders exceeding 30% of the total. This reversal may be due to the launch of new products.
It is indeed surprising that HiPhi has been favored by the market so quickly. But in fact, there is inevitability behind it.The author once visited Gotion High-Tech’s urban boutique factory located in the center of Yancheng. Besides the glass tower similar to Volkswagen’s Transparent Factory, the open and odorless paint workshop impressed the author the most.
In this painting workshop, Gotion High-Tech adopted the most advanced third-generation robots from Germany’s Dürr to achieve 100% automation. The nozzle reaches 65,000 revolutions per minute to make the mist finer.
The workshop forms a high-pressure electrostatic field of 30,000 volts, allowing the paint mist to evenly adhere to the body. This enables Gotion High-Tech to achieve an eight-layer paint process previously only found on ultra-luxury brands such as Porsche.
The “Titanium Grey,” unique to the 4-seater priced at 800,000 yuan, is the world’s first application of matte clearcoat in mass-produced car spraying. This kind of paint surface was only previously found on handcrafted custom models such as Bugatti.
The use of high-quality materials and advanced technology on the core and most luxurious detail parts of car paint highlights Gotion High-Tech’s high-end positioning and product power, and gives more customers reasons to choose Gotion products regardless of cost.
Perhaps the luxury price of over 500,000 yuan does not bring greater market share compared to more high-volume models.
But for the Chinese automotive industry and Chinese automobile professionals who are determined to break the monopoly of overseas brands in the high-end luxury market, breakthroughs such as Gotion High-Tech have a completely different meaning.
More flexible, more free, and unrestricted direction
Returning to the beginning, what secrets did Musk tell Herbert Diess? It is to abandon the inherent OEM car manufacturing model. Musk, an engineer by profession, has his unique understanding of the supply chain, logistics, and automobile production methods.
For example, in the current shortage of chips, Tesla rewrote some programs of the vehicle and used some chips that are not in short supply. For Herbert Diess, his colleagues, and even the Volkswagen behemoth, this flexible and effective product strategy is a priceless treasure worth learning.
So, is this method also the secret of success for Gotion High-Tech, a new brand that has just topped the list of luxury electric vehicles priced above 500,000 yuan?
The answer is also yes.
Similar to Herbert Diess, Ding Lei, the leader of GAC Group, is also one of the important leaders in the Chinese and even world automotive industries during the OEM era.
However, compared with Herbert Diess, who is in charge of Volkswagen, Ding Lei, who is currently at the helm of GAC Group, obviously has a more flexible, free, and unrestricted development direction, and has taken a step ahead into the new world (the real world of intelligent cars).
Technically, as a graduate in physics, Ding Lei is considered “radical” among all the founders of new car manufacturing. With more than 20 years of industry experience, he has not stuck to the traditional concept of car manufacturing in the past, but has aroused unprecedented enthusiasm in the new entrepreneurial journey of GAC Group. Ding Lei and his team at Huachenyuntong want to create not only a car, but also a completely new travel experience.
Therefore, GAC Group has abandoned the traditional OEM supplier search model from the beginning and worked with suppliers to create unprecedented, ideal parts and materials. At the beginning of Huachenyuntong’s establishment, Ding Lei personally led his core team and cooperated with Dow, the global chemical giant, using his influence in the global automotive industry chain to jointly develop materials from the upstream, in areas such as safety structure, environmentally friendly interiors, and lightweighting, and applying more innovative and environmentally friendly materials to new energy and intelligent cars.
In the entire R&D process, 12 innovative materials were developed, of which 8 have already been applied, including acoustic foam, a new TC series battery thermal management material, and organic silicone leather materials for interiors, thereby establishing GAC Group’s unique concept of “technology and luxury”.
Yao Weiguang, CTO of Dow Asia-Pacific, recalled the scene at that time, saying: “From the beginning, Huachenyuntong wanted to develop globally leading and innovative products, whether in terms of environmental protection, performance, luxury, or technology; he (Ding Lei) has many requirements for materials, and organic silicone leather is more in line with his (idea of) environmental protection.”
Of course, this pursuit of ultimate concepts is not only reflected in cooperation with Dow. Working with Chi Huaton to create a customized fragrance, programmable headlights co-created with open ports and users, and even the AI voice assistant for in-car developed in cooperation with Microsoft, all reflect Ding Lei and GAC Group’s flexible choice of suppliers and co-creation with suppliers and even car owners of their own components products and usage models, ultimately becoming an important reason for the brand’s success.
Clearly, this flexible elite mindset, which has a unique understanding of the supply chain and is brave enough to explore co-creation, shares the same path as Musk and Tesla’s success.
In the era of new energy vehicles, there is no determined leader
In fact, the Volkswagen Group seems to have learned from new forces and formed a love-hate relationship with them. As with Herbert Diess, Porsche, which is in the same segment market as HiPhi X, has formed a factual competitive relationship with HiPhi and is closely related to them.
In a recent interview, Dr. Jens Puttfarcken, CEO of Porsche China, said, “Porsche has maintained close contact with HiPhi for the past two and a half years and regularly exchanges ideas and communicates development.” He believes that HiPhi has provided an innovative solution.
Obviously, there is no question of who is leading in the field of pure electric vehicles. Industry giants that dominated the internal combustion engine era need to start over in the era of pure electric and intelligent automobiles. The key to leading the future of new energy automobiles, even intelligent automobiles, is whether they can create a flexible supply chain system and technology that better meet the needs of future users, like HiPhi and Tesla.
On this point, we can see some signs from the Volkswagen ID series, Mercedes EQ series, and Porsche Taycan models. They still walk the balanced product line steadily, moving towards the old OEM supplier system, to present users with a similar usage experience to automotive products in the internal combustion engine era in terms of user experience, battery life, and driving experience (like the driving characteristics of Porsche Taycan).
In fact, there is still no question of who is leading in the design and manufacturing concept of pure electric vehicles, as well as which type of product will eventually become the industry benchmark. Currently, there is a polarization of two different routes in the global pure electric vehicle market.
This difference is reflected in the huge difference in monthly sales of pure electric vehicles in the European and Chinese markets, and the only brand that has a significant impact on both markets is Tesla. The reason why Tesla is doing so well in these two markets may be due to Musk’s commitment to the car manufacturing concept, which has become the decisive factor.After all, since the birth of the automobile, it has been the culmination of modern industrial technology and the most important carrier of the latest technology and concepts. Enterprises that dare to innovate, break through constantly and break the old rules have been proven successful time and time again in history.
This is also the core reason why GAC NE can be successful, occupying the “top” position in the market for pure electric vehicles priced over 500,000 yuan and attracting frequent attention of giants like Porsche that cannot be underestimated.
Perhaps, in view of the current situation, GAC NE, which started later, needs more time to reach the height of Tesla, but as long as the direction is correct, the goal can be achieved. As for the entire Chinese automobile industry, GAC NE’s one-month sales peak may not change the basic pattern of the entire luxury pure electric vehicle market, but please do not underestimate its significance.
Just like GAC NE’s consistent pursuit of users who agree with their philosophy – the elites (also known as “Breakers of Dawn”) who can continue to follow their own beliefs in the noisy era, and review their real needs and desires from an independent perspective, constantly exploring a new balance between the era, society, and themselves.
Last month, during a typhoon on Monday, a GAC NE owner from Shanghai, Mr. Chen, with luxury cars like the Kuling inside his home, drove for 400 kilometers to attend a sharing session held by GAC NE in Yancheng, sharing his views on the development of Chinese brands.
This young entrepreneur has been wondering why foreign brands sell their products so expensively. He firmly believes that whether it is industrial or other products, with the abilities and production levels of China today, it should be on par with international standards. Moreover, as China has the largest market and production base in the world, why can’t it have its own brand at a price of 600,000 yuan or even higher?
So, when the day GAC NE is really mass-produced comes, he will not hesitate to pay the bill and believes that at this price point, he experiences a sense of respect that other traditional luxury brands cannot bring.
Like GAC NE, these “Breakers of Dawn”, regardless of adversity or prosperity, can always rely on their belief and yearning for the future to embark on the journey. They are persistent and able to bring value to society or engage in more creating.
Ultimately, their choices will be like the first snowball thrown at the top of a mountain, ultimately “rolling” into a “first step” that will truly shake the global pure electric vehicle market.
In this regard, the significance of GAC NE’s achievement in September 2021, reaching the top of the market for luxury cars priced over 500,000 yuan, is truly greater than many people imagine.
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.