Author | Huangshan
Editor | Zhu Shiyun
Which industry is most “heated” now? Undoubtedly, it is the new energy vehicle industry.
Various methods such as “piling up materials, assembling, futures trading, bragging, entering shopping malls, building charging stations, and pursuing high cost-effectiveness” ultimately lead to losing money while gaining fame, all for the sake of grabbing traffic and market share.
But is this sustainable?
At the Hundred People Forum on September 23, Dongfeng Group Chairman Zhu Yanfeng said, “We need to stop creating hype around technologies and avoid rushed and ineffective innovations, to achieve the relationship between product and enterprise scale benefits. Currently, except for a few leading companies, most companies in the new energy business are struggling with low single vehicle profitability. The more sales, the greater the loss. It forms a vicious circle that relies on gasoline vehicle profits to subsidize new energy vehicles.”
Also, Chen Yudong, President of Bosch China, said, “I hope everyone can follow basic business logic. Development without profits for too long is inappropriate. We hope to balance business operation with technological innovation.”
Both pointed out that the current industry is neglecting true fundamental product development and technological innovation in exchange for catching up with new models, and is engaging in the “strange phenomenon” of not making a profit to seize market share.
In a limited market, this “heating” phenomenon, as more and more people compete for it, devolves into a situation in which each person gets less while paying more.
This trend is more prevalent among domestic brands, and now it is slowly “sucking” in international brands as well.
This trend started with new forces brands, without solid financial foundations, relying on the profits of gasoline cars and burning investor money. It seeks market expectations and the future, and differentiation is a choice, but also carries huge risks and opportunities.
Because everyone is “heating up”, it seems like they are all entering a “prisoner’s dilemma” forced to choose, if I don’t start or start too late, someone else will start first.
In the end, those who get “burnt out” are the ones with less money, worse products, weaker technology, lower sales, and poor reputation….
Who can endure it the best? It is the international brands, and Nissan is likely to be one of them.
Why do we say that? On September 27, Dongfeng Nissan Ariya was listed, and detailed product information and prices were announced.
Let’s talk about product details first. Nissan highlighted their core technology of the three-electric architecture with the launch of the Ariya, as Nissan has 75 years of experience in developing pure electric cars.
The electric motors are fully self-developed electric-excited synchronous motors, which are the only mass-produced vehicles in the world used by both BMW and Nissan.
By adjusting the electric motor current, it balances efficiency and performance and is comprehensive in terms of acceleration, volume and weight, and driving noise.
The electronic control system of Ariya is entirely developed in-house, which can achieve torque control in 1/10000 seconds, making acceleration more linear and preventing motion sickness.
Battery is also a strength of Nissan. Its LEAF has achieved a record of 21 billion km driven with zero significant safety accidents. Although Ariya’s battery is provided by CATL, the entire battery design, safety protection, and production standards are fully defined by Nissan.
Together with 16 active safety technologies equipped in the vehicle, as Nissan Dongfeng Automobile Co., Ltd.’s General Manager, Xin Yu, said, safety is the bottom line of Nissan and there is no need to doubt it.
Ariya is equipped with Nissan’s e-Platform, which is benefited from Nissan’s control over the core technologies of the platform and the three electric components. Therefore, Ariya’s driving performance is outstanding.
As for autonomous driving and intelligence, Ariya’s functions are practical and stable, such as full-speed range adaptive cruise control, lane keeping, automatic follow-up, and turn signal-controlled lane change, etc., instead of experimenting like new players with unstable NOA and city NGP.
The price of Ariya ranges from RMB 272,800 to RMB 342,800, with all four models fully equipped with 90-degree electric battery.
The official limited-time promotional policy is to buy a low-end configuration to enjoy a high-end configuration, giving free lifetime warranty for the three electric components and the whole vehicle, 2,000 free public charging, and a cash rebate of RMB 20,000 for the low-end configuration and RMB 30,000 for the high-end configuration upon presenting the invoice before December 31.
In other words, the high-performance four-wheel-drive top-end version can be purchased for RMB 297,800, and the long-range high-end version can be purchased for RMB 252,800.
For a 4.6-meter SUV, the price of Ariya is indeed a bit expensive compared to domestic brands, but it is a reasonable price.
As Xin Yu said, Ariya is Nissan’s first global strategic model for NISSAN NEXT, focusing on user reputation and sustainable development.
“Reasonable pricing leads to reasonable profits, and enterprises can continue to invest, recruit outstanding talents, and bring better products, so as to form a positive cycle,” Xin said.And Ariya is not a futures contract, it can be delivered in October and will gradually enter the nationwide dealer network of Nissan.
When asked how many pre-orders Ariya has received at this stage, Xinyu replied: “It’s meaningless to talk about it now. It all depends on market feedback. There’s no point in bragging.”
Building an international brand requires continuous investment in technology, producing products that meet the current needs of users, setting reasonable prices, and slowly cultivating the market through long-term and stable strategic focus, which is precisely not in line with the impetuous style of seeking immediate success and quick returns in the domestic market.
However, every one of us knows that new energy vehicles are a “marathon”, not a sprint, and it takes bottom-line reserves and endurance.
Although traditional international brands seem to be “left behind” in the field of new energy vehicles in China, if we look at it from 5-10 years, the current short-term stagnation or decline is normal. After all, they have been in business for decades or even centuries, with the wisdom of sustained operation and survival.
Domestic companies should also remain stable, invest heavily in basic research and development, value product quality and standardization, especially product safety, and avoid boasting and selling futures. Be a long-term strategist against internal competition.
Finally, enter the global market and compete with international brands.
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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.