Writing by: Roomy
Editor: Zhou Changxian
“Chinese luxury car brands are more than just piling materials, and they will change the global high-end car industry.”
Wang Chuanfu’s style remains the same, using concise language and a slow pace to talk about things he believes are certain.
It is well known that BYD has many die-hard fans with a nickname – “Di Fans”. These fans all have some admiration for BYD’s founder, Wang Chuanfu, and have been cheering for BYD for many years. There is a saying in the industry, “Di Di can fly at ease, and Di Fans will always follow.”
In recent years, BYD has indeed flown boldly and confidently, and after becoming the world’s best-selling new energy vehicle brand, Wang Chuanfu has a greater vision to change the global high-end car industry by launching a new high-end brand called “Yuangmou”.
However, for the “Yuangmou” brand and the die-hard fans who vowed to follow BYD, opinions are divided.
“It is shocking that four-wheel motor technology can be sold for millions under the brand Yuangmou.” “For the first time, I have the urge to buy an off-road vehicle, but unfortunately I am too poor! So I can only look up to it.” These are supportive comments. There are also strong opposing voices, “Is the conference presentation made by an engineer? It is all about technical details.” “From the F3, I have been a Di Fan for so many years, but I really can’t think of anything in Yuangmou that can sell for more than 1 million yuan”…
The disagreement among Di Fans also represents two different views of the Yuangmou brand in the market. One is “It’s a good thing for domestic brands to stand out,” and the other is “Selling a luxury car for a million yuan is different from selling cars for tens of thousands or two to three hundred thousand yuan.” The implication is, “Who will buy a million-yuan BYD?”
However, I believe that Wang Chuanfu does not care about these doubts. In his 18 years of making cars, he firmly believes in both BYD’s technology and the idea that “where there is a will, there is a way”. Just like in the early days of the rise of new car manufacturers, there were few supporters, and even Elon Musk was once “critically criticized,” and there were countless Wall Street wolves who were “shorting” Tesla.
In short, it is too early to draw any conclusions now.
As for Yuangmou, which has extreme views, it is worth discussing what kind of brand it is.
Subverting the ability system of fuel vehicles?
Before talking about Yuangmou, let’s first recall a small story that could be said to be Wang Chuanfu’s “heart knot”.# 2021, BYD and “Ying Wang” Brand
In 2021, Wang Chuanfu, after drinking with Yu Minhong on the “Zhuo Jian” program three times, talked about the long interrogations he faced during his visits to the US and UK in the past. At that time, Wang Chuanfu felt that he was looked down upon and kept his aspirations hidden, hoping to make the industry larger and fight for the reputation of the Chinese people.
It is undeniable that at that time, facing European and American automobile giants, China’s fledgling auto industry had an air of “looking up.” Whether it was the story of joint ventures to enter the market or the story of independent brands moving upmarket, their aim was to eliminate this “looking up” mentality.
BYD under the leadership of Wang Chuanfu was no exception. His method of “staying ahead” was to rely on technological strength. He hoped that with the support of technological strength, the Chinese automotive industry could truly stand out.
As BYD surpassed Tesla and claimed the number one spot in global new energy vehicle sales, Wang Chuanfu’s vision has been largely realized. However, there is still one more thing to do, which is to make high-end products and rid BYD of its reputation for being strictly cost-effective.
It can be said that this is a key point in Wang Chuanfu’s aspirations for the brand.
In other words, Wang Chuanfu hoped that through technological strength, the automotive industry could reverse its “looking-up” mentality towards China in the era of electric vehicles. He hopes that Chinese automotive brands will be “looked up” to by the global market. Therefore, when the “Ying Wang” brand was launched, he said, “completely overturning the power system of traditional fuel vehicles.”
So, what exactly is “Ying Wang,” an ambitious brand?
The logo of “Ying Wang” is derived from the Chinese character for “electricity” in oracle bone script. It is a completely Chinese element, reflecting the obsessions and persistence of BYD.
The character “electricity” not only carries the meaning of new energy, but also represents the continuous advancement of human civilization. Wang Chuanfu hopes that “Ying Wang” can progress forward bravely from the past to new heights of automotive technology. Supporting this vision is Wang Chuanfu’s pride: the core technology of “Yi Si Fang.”
It is apparent that Wang Chuanfu hopes that “Ying Wang” will make a remarkable debut. Therefore, when the first model, U8, a high-end hardcore off-road model, was released, it demonstrated superb skills: walking sideways like a crab, spinning, and supporting the “water-floating mode.” These actions were seamless and carried out without a hitch.
During more than half of the press conference, various “black technology” vocabulary was mentioned. Netizens said, “Although I don’t understand, I am deeply shocked”, accompanied with a Li An emoji.
What impressed netizens the most was “Yi Sifang”, this technical term. It is the fourth power of e, representing four electric motors, and also means “easy to manipulate”. You see, Wang Chuanfu’s ambition is not at all hidden, and he strives to be as transparent as possible.
Yi Sifang is a power system with four independent electric motors as its core from the three dimensions of sensing, decision, and execution, comprehensively reconstructing the characteristics of new energy vehicles. The most subversive value is to break through the constraints of the technical architecture of fuel vehicles and provide safer cars with a completely new concept.
“BYD has always had a technical dream, which is to provide users with the ultimate safe car by better controlling the posture of the car.” In Wang Chuanfu’s view, the stability control of traditional fuel vehicles is limited by technical development, and the perception speed and accuracy are far from the ultimate safety. The execution is slow, inefficient, low power, and low differentiation of the four wheels.
In other words, in the era of fuel vehicles, engineers saw the bottleneck of vehicle stability control. Although there is an ESP system, the problem of slipping and instability still exists. The “Yi Sifang” technology can independently adjust the dynamic state of the four wheels of the vehicle at a millisecond level by using the electric drive system with stronger sensing power to better control the posture of the vehicle.
This is due to changes in the judgment signal. The core signal for ESP to judge slipping is the wheel-speed sensor, while the core signal for Yi Sifang is the motor’s rotation-varying signal, which has an identification accuracy more than 300 times higher than the wheel-speed sensor. The power domain controller can directly obtain the slipping condition of the wheels and control the motor torque to suppress slipping.Of course, the fundamental breakthrough in overturning the traditional gasoline-powered vehicle system lies in the four-wheel motor technology. The four wheels are the hiding place of “black technology,” as Li Bin said.
Looking up at the first U8 model, it is the first pure electric SUV model with four motors after super electric sports cars such as NIO EP9, Lotus Evija, and Rimac Nevera.
There are dual motors in the front and dual motors in the rear, and all four motors can be independently controlled for forward and backward movement and torque vector control. In the gasoline era, Mazda’s proud driving performance was achieved thanks to torque vector control technology, also known as vehicle stability technology.
With four independent motors, the “liberation” of the wheels means that horizontal movement and turning on the spot are “minor things.” However, wheel-end motors and turning on the spot is not an original concept, as early as 2019, the new automaker Rivian has already realized this technology.
Although it is not an original concept, it does not prevent Yema from having a large amount of safety redundancy in terms of technology. For example, when a tire blows out, Yema’s Easy-4U system can accurately adjust the torque of the remaining three wheels 1,000 times per second to keep the vehicle stable. “Even if a tire blows out on the highway, it won’t affect driving,” joked BYD Group Executive Vice President Lian Yubo.
“By timely and forcefully intervening to compensate for the vehicle’s posture through the driving wheels, we can help drivers stop the vehicle stably and controllably, and this function can avoid secondary accidents,” said Li Bin eagerly.
“In the era of electrification, Chinese automakers have already taken the initiative to master the technology.”
Li Bin hopes to expand this initiative to a higher price range. With super technology, provide revolutionary products and experiences, deep technical accumulation and mature industrial chain support, driving the Yema brand to ascend to a higher level in the “sky”, becoming an eye-catching “Yema” for the world to behold.## Can the Brand Image Support Million-Dollar Prices?
Why did Wang Chuanfu need to succeed with a premium brand for him to finally breathe a sigh of relief? It’s easy to understand.
For a long time, the million-dollar luxury market has been dominated by traditional luxury brands. Especially with the engine, gearbox as the main braking mode, traditional luxury brands have an insurmountable gap, known as the “indestructible moat.”
BYD relied on new energy to make a name for itself in the passenger car market. Wang Chuanfu knew that taking the high-end route would require a new path in the new energy field.
Therefore, he said, “The birth of a high-end automobile brand must be accompanied by the maturity of top-core technology. Super technology creates high-end brands. With the birth of the ‘E-Platform 4.0’, China’s automobile industry has, for the first time, the opportunity to impact the high-end market with core technological advantages, and is capable of mastering the definition of high-end automobile performance. Thus, the brand BYD Dynasty is born.”
He thinks that BYD’s establishment of a high-end brand is a natural progression in this direction. Because the technical strength is there.
Wang Chuanfu spent a long time discussing the posture control of the vehicle body, which is equipped with the E-Platform 4.0 technology, including driving sideways, turning around, emergency floatation, and other capabilities. Even then, he wasn’t satisfied.
Behind this was his confidence. This is also reflected in the vehicle’s price, which has drawn criticism.
The E-Platform 4.0 technology is used in the BYD Dynasty, which has an independent 4-motor drive architecture and over 1100 horsepower. The Up Auto U8 model is comparable to the Mercedes-Benz G-Class and the Land Rover Defender.
From last year’s sales, Porsche’s Cayenne and Mercedes-Benz GLS led the way in SUV sales above one million yuan, followed by the Land Rover Defender. As a “competitor,” the price of the Up Auto U8 naturally had to match its identity. The background board behind it reads “The Million-Dollar New Energy Tough Off-Road.”
Compared to the obscure technology, this price seems even more incomprehensible and requires logic to support it.
To be honest, these days there are many new brands with prices of more than five hundred thousand yuan or even up to seven or eight hundred thousand yuan. However, it’s hard to say how many of them can be successful. After all, as Li Bin of NIO once said, the automobile industry is a marathon. We have only run two or three kilometers, and nothing has been achieved yet.
Even though BYD has a very rich pool of technology, it has no experience in operating a million-dollar luxury car brand. As a senior journalist said, “Selling a car for one million and selling a car for two or three hundred thousand are not the same game, nor the same system.” Therefore, questioning the million-dollar price point is also reasonable.
After the launch of the “Yuan Wang” brand, under the BYD system, a brand sequence with three different positions, BYD, Tang, and Yuan Wang, was formed. Wang Chuanfu hopes that under the guidance of technological innovation, Tang and Yuan Wang can occupy and consolidate BYD’s dominance in the high-end luxury market.
Wang Chuanfu said, “Not slipping, not tail-spinning, not flipping over, has become the instinct of new energy vehicles. Safety is always BYD’s highest pursuit.” In my personal understanding, Wang Chuanfu regards the “Yuan Wang” brand as the focus of the million-dollar luxury car market, still placing it on safety, which is far from enough.
If the 200,000 yuan BYD and million-dollar Yuan Wang enjoy the same “highest pursuit” of BYD, who will pay for Yuan Wang?
“We believe that China’s high-end brands are definitely not just about buying materials. They should be based on super technology to provide users with subversive products and experiences.” Wang Chuanfu’s statement only gets half of the picture right.
Indeed, million-dollar luxury is not something that can be sold for a million yuan based solely on hardware and data. The experience brought by technology only accounts for a part of it.
Actions speak louder than words. Let’s take a look at the luxury car sales data from January to October 2022. Porsche 911 with an average unit price of more than RMB 1.5 million sold 2600 units, which is a considerable number. In the buyer survey, the reasons for buying Porsche 911 are comprehensive, including brand, culture, technology, precision manufacturing, and reputation.
It is not difficult to find that whether it is the hard-line off-road SUV in the “niche market,” the Yuan Wang U8 with a 3-second acceleration, or the million-dollar pure electric performance supercar, the Yuan Wang U9 with butterfly doors and a 0-100km/h acceleration time of 2 seconds, all face this problem.
“Insufficient Branding, Compensated by Technology”. Is it practical?
“Top-notch Technology Achieves High-end Branding” – this statement by Wang Chuanfu has garnered both agreement and disagreement. While releasing a supercar has become a standard move for traditional brands to make a leap into high-end branding, there are few successful domestically produced electric cars with a sale of over a million vehicles.
Not only are there few successful domestically produced electric cars, luxury brands like Mercedes-Benz and BMW are struggling with pricing power in the “million-level electric car” market. The flagship electric sedan EQS by Mercedes-Benz, which costs over a million yuan, sold less than a thousand vehicles in the first three quarters of 2022, and had to undergo an official price cut with a reduction range of 200,000-229,600 yuan.
How to maintain premium pricing for million-yuan luxury cars in the electric vehicle era is not only a challenge for traditional luxury brands, but also for new electric vehicle forces. The same is true for YANGTUO. In fact, YANGTUO is an inexperienced new brand.
For YANGTUO, the biggest problem is that the brand image cannot support the million-yuan selling price.
As an example of a newcomer who has not yet achieved success, TESLA has already sounded an alarm for BYD and Wang Chuanfu, stating that shaping a high-end image requires not only technology, but also more. Fortunately, BYD, which has adequate technical strength, has time to sharpen its brand.
According to previous reports, in order to differentiate it from its original brands, YANGTUO’s brand, product, sales service network, and operation will all have a completely new and independent team. These are all areas where BYD has been lacking.
It remains to be seen from which luxury brands BYD will snatch its share.
Final Words：
Of course, we shouldn’t be overly negative.
After all, YANGTUO is a brave beginning. Like Wei Xiaoli, he has walked step by step to now and overturned the era of internal combustion engines amidst a skeptical crowd.
Wang Chuanfu once said that building BYD is like walking on a narrow bridge -“Only by making a firm determination, forging ahead, and overcoming difficulties can we succeed.” YANGTUO, who has made a firm determination to become a high-end electric vehicle brand that can be admired globally, is the same.
“Looking up is not only an action, but also a spirit,” said Lian Yubo.
In my opinion, this spirit is also an entrepreneurial spirit. As Wang Chuanfu once said, “The market is like a battlefield, competition is like a war, and generals are very important. This requires us entrepreneurs to take the lead.”
On January 5th, BYD’s stock price rose by 2.31%, closing at 265.08 yuan per share. The “honest” capital market also expressed confidence in looking up.
We wish every brave start all the best.
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.