Translation

Author: Zhang Ruichen

Editor: Wu Xianzhi

On November 8, 2022, BYD officially announced its high-end car brand, which is called “Yang Wang”. The estimated price range is between 800,000 and 1.5 million RMB. The launch is currently planned for the end of the year.

BYD has set up the Shenzhen Yangwang Auto Sales Co., Ltd. in Nanshan District, Shenzhen on November 7, 2022, holding 100% of the shares.

Li Yunfei, the General Manager of BYD’s Car Branding and Public Relations Department said: “Yang Wang is not just a kind of attitude, but also a kind of brave exploration spirit. We hope to bring users extreme performance and new experiences through revolutionary technology and products.”

Before this, BYD had already set a precedent for high-end brands, which was the joint venture DENZA established with Mercedes-Benz in 2010. DENZA, which grew up with a silver spoon in its mouth, seemed to have performed poorly in its 12 years of growth, which was assisted by Mercedes-Benz. So what caused DENZA, which has been lukewarm under the blessing of Mercedes, for so long?

① Being Born at the Wrong Time

DENZA was born to launch a profitable new brand and to learn from each other’s technologies. However, in the early days of China’s new energy, the public’s acceptance of new energy models was not high. It was not until 2020 that the proportion of new energy vehicle sales in China reached 5.4%. We all know that in recent years, new energy vehicles have been developing explosively. If DENZA had appeared now, perhaps it would have been much better than the current situation.

② Low Cost-Performance RatioTaking the DENZA 2014 as an example, the guiding price is between 369,000 to 399,000 yuan, positioning itself as a mid-size car. After subsidies are applied, the selling price in Beijing is between 259,000 to 289,000 yuan. From the post-subsidy selling price and range performance, consumers can easily buy a well-configured luxury brand B-class car.

③Technologically Outdated

Here, the term “technologically outdated” refers not to being behind in new energy vehicles, but to being behind compared to traditional gasoline-powered vehicles at that time. Its official range is 451 kilometers, but its actual range is less than 400 kilometers. The actual 0-100 km/h acceleration test results of the DENZA are 13.54 seconds, and the braking distance is 41.38 meters.

Paying 300,000 yuan for such a car that not only drives sluggishly and has soft brakes, but also has a relatively unknown brand, makes it difficult for consumers to buy. If we really wanted to talk about environmental consciousness at that time, buying a BAIC new energy vehicle that costs just over one hundred thousand yuan would be an even better value for money.

DENZA, which wants to enter the high-end market, did not set a clear “benchmark” in the initial stages of its brand. Therefore, people’s deeply rooted inherent thoughts about DENZA are hard to change, even when it releases DENZA X and DENZA D9 later on, the sales did not live up to expectations.

Will “Looking Up” follow in DENZA’s footsteps? I do not think so.

①Timing is Right

From the latest sales data released by BYD for October 2022, they achieved a new record of 217,800 units sold, which is also the 2nd consecutive month that BYD’s sales surpassed 200,000 units, and sales in the previous month was 201,000 units. BYD is further widening the gap with Tesla. In the same month, the total sales volume of new energy passenger vehicle manufacturers was about 680,000 vehicles, a month-on-month increase of 1% and a year-on-year increase of about 87%. If we calculate based on this data, BYD actually accounts for nearly one-third of the market share.In the first ten months of this year, the cumulative sales volume of BYD’s new energy passenger vehicles has reached 1.3928 million, a year-on-year increase of 239%. Previously, BYD set a sales target of 1.2 million vehicles for 2022, which has been completed two months ahead of schedule.

Now, BYD has halted production of traditional fuel vehicles and is focusing on new energy vehicles. This has led to continuous improvements in technology, production capacity, sales volume, profits, and product strength. BYD has entered the best period of steady and rapid growth in history. This is the perfect time for BYD to launch a high-end brand.

2. Filling the Gap

The high-end brand launched by BYD this time is called “YOUNG” (仰望). Based on several current product plans, the price range of YOUNG is expected to be between 800,000-1.5 million RMB, and the first model will be launched in the first half of 2023.

Currently, the most high-end models in BYD’s existing vehicle lineup are the Han EV and the Tang EV, both priced at around 300,000 RMB. Some people believe that they are not advanced enough compared to Japanese and German brands. The highest-priced high-end new energy vehicle models in China’s domestic market are the HiPhi X produced by Human Horizon, priced in the range of 5.7 to 8 million RMB. However, there is still a gap in the million-level domestic new energy vehicle market.

Let’s take an example: when it comes to high-end world-famous liquors, we can think of brands like Remy Martin, Louis XIII, Lafite, and Martell, among others. Moutai, a Chinese liquor, is also one of the top ten famous liquors in the world. Although Moutai has no long history like those mentioned earlier, it is also very popular among people from China and other countries. Perhaps what BYD needs to do now is become the “Moutai” in the new energy industry.

3. Technological Leadership

In recent years, BYD has continuously made breakthroughs in technology, achieving outstanding results in both its latest e-platform 3.0 and fourth-generation hybrid technology, DM-i. BYD has been granted authorization for more than 20,000 patents, of which the most representative is the independently developed blade battery, which has more than 500 patents.Actually, BYD had a dream of low carbon, environmentally friendly and electrified vehicles in the early days. In 2003, it invested a lot of R&D efforts and financial resources in the battery field, and now has gained recognition at home and abroad with the independent technology under BYD.

According to statistics, BYD’s new energy vehicle models have been exported to more than 70 countries and regions across six continents worldwide, making it a benchmark in China’s automobile export industry.

BYD’s new energy vehicle technology has formed its own technical scale, and has almost taken the lead in the industry from the overall direction to every detail, and the pace of exploration is accelerating.

Final Words

Behind BYD’s sales dominance is the unyielding adherence to the new energy vehicle strategy for many years and the unremitting investment in new energy vehicle technology, which has laid the foundation for BYD to move towards high-end.

The first half of new energy intelligent vehicles is the competition in driving form, and the second half is the competition in intelligence and automatic driving. The current market pattern is uncertain, and opportunities and challenges coexist.

However, relying solely on technology and sales support is not enough to build a high-end brand. Under the premise of strong technology, BYD must bring brand recognition and a bright spot in intelligence to people.

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.