*This article is reproduced from the autocarweekly Official Account

Author: Jiang Xiaohua

During the media day of the auto show, Tank Brand General Manager Liu Yanzhao proudly said in an interview that this year’s organizing committee gave the first floor, which has better popularity, to the intelligent EV brand, and Great Wall Motors had to have a brand on the second floor. He voluntarily chose the second floor, because Tank is not afraid of being in a deep alley. Our fans can be found anywhere, and maybe we can also bring some popularity to the next door (Jaguar Land Rover).

However, the theme of this year’s Shanghai Auto Show is undoubtedly intelligent electrification. The small logo of Huawei inside squeezed the large logo of the outside to the point of not knowing how to arrange it. According to rumors, ARCFOX Alpha S is really difficult to pronounce, so let’s just call it Huawei inside. Of course, Huawei definitely doesn’t manufacture cars.

Geek+ 001, IM L7, Aiways Y, Mustang Mach-E, and Volkswagen ID.6 all received highly consistent praise and also brought in a fairly large number of orders. They won back a city for traditional automakers on the road to smart EVs and, more importantly, regained their confidence. Before these outstanding products arrived, these big companies had been subject to the pitiful gaze of being “like Nokia” for years, and occasionally had to face the malicious gaze of classmates like Wei Qingqing, who said, “Look at the way you don’t make progress.” Soon, the industry will probably only have new car manufacturers, and there will be no more talk of new forces.

Of course, traditional automakers that produce electric vehicles are numerous, but the public’s eyes are really sharp now, and there is no possibility of launching an amazing car and not receiving attention. I believe there are more good works on their way.

XPeng P5 didn’t make a big noise, but on the third day of the auto show, it sold out 10,000 units with posters; even the concern that the cars will be more expensive of GAC, also announced that they have received 4,000 orders.

And Evergrande, which has never been believed by the outside world during its strategic releases, announced in one breath that it would pre-sell five cars by the end of the year, with prices ranging from less than 160,000 yuan to over 600,000 yuan. They also promised to deliver all of them next year. I, for one, don’t believe it, but Evergrande people like it when everyone says they don’t believe it. Their belief foundation is that all of Evergrande’s successful projects so far have been the most incredible projects that the outside world didn’t believe in.

What is most infuriating is that new forces have also occupied the list of negative information. The beauty of Tesla owners’ anger finally forced Tesla, which had been arguing to the end, to issue what is probably the world’s first apology statement. It made the army that had been chasing and blocking Tesla for more than a year overjoyed, but it also aroused Versailles-style vigilance of pursuing diminished enemies. Other exhibition stands that also enlisted the help of car owners failed to earn a little bit of attention.The “old forces” are really not given any leeway. After careful consideration, it seems that only Geely’s new revolutionary product, the Star Voyager L, and the two new cars, Tank 800 and Tank Creamy Tough Off-Road 700, which are said to be priced at 500,000 yuan, can maintain attention above the level of normal new cars at the auto show among new forces in the information war.

After such a huge amount of information at this auto show, where the industry’s technological boundaries were pushed to the forefront of human technology, I dare to make the following five predictions for the future of the car market:

First, by 2025, the share of intelligent electric vehicles will greatly exceed the national target.

Based on the momentum of electric vehicles accounting for more than 10% of passenger car sales this year, coupled with the popularity earned at the Shanghai auto show, the national target of 20% of electric vehicle share by 2025 looks very promising, and I believe that this number will definitely be greatly exceeded. As long as the big players who are going down this year do not have too many problems with their products, 2024 is a very realistic turning point. By 2025, it is estimated that the Chinese market will welcome the arrival of iCar with a share of about 30%.

According to Li Bin of Nio, Apple’s car is the last sword hanging over the entire car industry, and a thick and sturdy shock-proof wall must be erected before the arrival of Apple. This is roughly on the same level as the description of human response to the end of the world in “Three Body”.

There are two basic materials for this wall, one is sufficient market share, and the other is sufficient user endorsement. As for the moat, Li Bin’s view is that there is no moat in the industry today. A new moat will be rebuilt by the person who fights to the end.

Optimism for the share of intelligent electric vehicles is due to the fact that electric vehicles are increasingly shifting from government requirements to user demands. Previously, the judgment of intelligent electric vehicles was that intelligence is a real user demand, while electrification is a social choice for energy and environmental protection. Today, the user stickiness of electric cars is much stronger than expected, and the dual-drive of intelligence and electrification will definitely improve the popularity of electric cars.

Second, the share of independent brands will increase significantly.If we ignore the equity structure and only consider brands that are native to China, known as independent brands, then it is certain that their market share will increase significantly. Some optimistic but irresponsible predictions speculate that it could possibly touch 70%. In my opinion, as long as it is not caused by international relationship factors, an increase to around 50% would be relatively safe.

The reason for this surge lies in the fact that these independent brands are genuinely good at making cars. Regardless of their current market position, they all share a collective anxiety about their brand and their products being subpar.

For example, during the most recent Shanghai Auto Show, the ratio of independent brands to other brands was approximately 7:3 for both gasoline and electric vehicles. Those who still insist that independent brands are inferior usually do so with a hubristic air, lounging around and chatting without really understanding the facts. Perhaps one could question the long-term outlook for Chinese automakers from the perspective of their developmental history. Nevertheless, at this juncture, independent brands have truly started to form a partial advantage over other brands.

In addition, many foreign automakers are in a very awkward position as they switch between gasoline-powered and electric-powered vehicles. In the next few years, many large automakers may face the possibility of falling behind the trend of electric vehicles while unable to keep up with the rate of loss in gasoline-powered vehicle market share in China.

Most international conglomerates seem to envision all possible futures before they arrive, but when the future does come, they struggle to balance present and future flexibility. German automakers chose to go 90% electric, while the three major American automakers’ strategies remain unclear. Even the most prudent Toyota appears to be feeling a bit uneasy. The message they send implies that they are uncertain about whether their own established pace will lead to guaranteed success.

Overall, it is difficult to predict the allocation of electric vehicle market share by 2025. However, for independent brands, the future for gasoline-powered vehicles looks promising, and in this area, they are deploying all their resources to force many joint venture brands into a retreat.

Furthermore, joint ventures are experiencing significant scrutiny during a time that requires courage, fast decision making, and reform in work procedures. This is not a time where Chinese product managers have to fight tooth and nail against arrogant foreign counterparts in order to convince them to install a sunroof in a 100,000 RMB car. In comparison to private Chinese automakers like Geely and Great Wall, as well as many emerging new carmakers, the decision-making efficiency, breakthrough courage, and other key traits of joint venture brands are markedly inferior. Even when compared to state-owned automakers, there is a clear gap.

During this era of change, it is unlikely that one can constantly rely on the excuse of, “As an enterprise of our level, we need to ensure that we are doing everything possible before making a move.”In my opinion, there are only two mentalities towards the trendy practice of selling futures by new entrants in the industry: either they don’t have any to sell, or they can’t sell them. Nowadays, the concept of futures is different from the PPT car-making of previous years. Its label is not a hoax, but radical, and being radical in a period of change is the right move. The outcome of being radical is that individual companies may encounter problems, but the industry technology will accelerate its development.

Therefore, it is not surprising that the competitiveness of most joint venture companies will continue to decline in the next few years.

Thirdly, intelligent and electrical basic technologies will rapidly become homogenized, and the ability to judge core user needs based on this homogeneity will become the key to competition.

Mr. Wang Yunqing once said that intelligent and electrical technologies will not become the moat for automotive enterprises. As mentioned earlier, Li Bin also believes that there is no insurmountable moat for the industry or for NIO itself. Looking at Bosch’s current concentration of purchasing, no one can truly make a differentiation in terms of basic technologies for electrification and intelligence.

Therefore, many people are talking about software-defined cars. However, many people overlook another dimension. I believe that predicting core hardware will become a very important quality for automotive companies.

A friend from Huawei told me that we now clearly know what the camera means for the mobile phone industry, but when Huawei started making mobile phones, who would have thought that camera competition would become a major weight in mobile phone competition? The fact is that the companies that have invested heavily in cameras for mobile phones are now leading the market. The ability to predict future demands largely determines your competitiveness. The results of hardware decisions are more obvious and more difficult to turn around than software disadvantages.

In my opinion, the comparison of automotive hardware has already reached this stage. This is also one of the hard advantages that companies like Apple and Huawei can bring tremendous psychological pressure to the current large automakers.

Fourthly, whoever can combine scale and customization to achieve lower costs and higher efficiency will be unbeatable.

If the keyword in the automotive circle last year was the “brand” that was desperately seeking a cure for illness, then after shouting about user logic for half a year, many visionary enterprises have discovered that the core of “user logic” at the product level is “differentiation.”

Consumers in all fields such as clothing, mobile phones, and household appliances pursue differentiation, and there is no reason why they would be an exception when buying cars. If a car with good basic qualities is not successful in the end, apart from the company’s own management and operation issues, there are only two most likely reasons: the first is that it was sold at a high price, and the second is that it was simply dull.

So far, most of the components of vehicles will certainly maintain scale, and differentiation cannot be achieved by a large increase in costs. Therefore, differentiation actually focuses on several aspects.First and foremost is design, with UNI-T and the Wuling Hong Guang Mini EV as prominent examples of star products from last year. The latter has even broken through the traditional consumption circle of the automobile industry, serving as the first car for young people, a toy for car enthusiasts, a license-free car in eco-friendly cities, and an even more impressive gift than a handbag for the wealthiest people.

However, even more impressive is the approach taken by Great Wall Motors. In the past, the practice of using a single platform to produce multiple models was considered to be a slippery slope, but it is now seen as a diligent way of meeting user needs. Many car companies have stretched their product lines to meet different demands, but Great Wall’s approach is more interesting.

For example, with the tank series, the current trend is to develop “skins” similar to those used in the gaming industry. For instance, at this year’s auto show, the Tank 700 and Tank 800 models should not have been classified as part of the same series using traditional methods, but Great Wall still did so. The reason is that users have similar expectations for these two models.

At a more granular level, for example, with the Tank 300, if a group of users indicates a preference for a vehicle suitable for fishing, Great Wall will broaden its research scope, gather more relevant information, and quickly develop a vehicle that meets the needs of this group of people in terms of appearance, interior design, and layout.

This is not a technically difficult task, but it requires great ability and speed. The ability to achieve small-batch customization on this scale is essential, as it must take cost into account while satisfying user demands and demonstrating excellent design. Speed is also critical, testing R&D design capabilities, supply chain integrity, and response time.

In summary, there are two types of differentiation: one is perceptible differentiation achieved through vehicle design, which is more likely to lead to a breakout success, but the sustainability of the design is the greatest enemy of all auto companies; the other is real-time response to user needs, requiring companies to be highly sensitive and close to their customers.##

Fifth, Tesla won’t be knocked down by non-technical reasons.

Tesla may be brought into a passive position due to changes in international relations, or may be knocked down due to product laziness or selective errors in critical routes, or may be knocked down by companies like Apple, or even by Musk himself, but it is unlikely that it will be truly knocked down by unrecognized technical flaws and inappropriate attitudes in the Chinese market for a period of time. At most, this may lead to it being trapped in a long or short period of time.

Regardless of how daunting the situation may look for Tesla in China, or how impressive its emotional intelligence may be, the fact that there are increasing numbers of people who think that Tesla has brake problems does not provide a reason to defeat a company that has clear advantages and strengths in the trend of smart electrification. The logic is simple – these problems are actually not difficult to solve.

In the end, it is simply two decisions that may be slightly difficult but do not really hurt Tesla’s technological ideology – replacing people and brakes. These two actions may not even harm Tesla’s brand meaning.

In fact, the biggest challenge could be whether Tesla’s background vehicle detection system logic needs to be adjusted, which may be a big action that requires time and pain to bear, but this time can be won with hardware costs and it is not a dead end.

Tesla should thank the lady who stood on top of its car and made seven or eight hot searches for it, as well as the various positive or negative driving forces behind the lady. If it is ultimately proven that Tesla’s remote monitoring guarantee logic really needs to be optimized, their role is difficult to evaluate with visible amounts and is far greater than the short-term realistic losses they may bring to Tesla.

This is also a useful warning for all companies in the smart electric field. At least before the era of fully autonomous driving arrives, the industry has the opportunity to think more cautiously about the path and rhythm of intelligent replacement of labor and the necessity of safe hardware redundancy in the early stages of intelligence.

According to the law, humans are still the primary responsible parties for driving outcomes, but everyone knows that drivers are running naked in the inevitable delay of regulations in the development of intelligence. Therefore, even without legal liability, leading companies should not adopt a face-saving attitude of “It’s not my fault if there are problems”. This is not within the scope of technical confidence.

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This auto show is the most interesting and informative one that I have participated in, both domestically and internationally. It further confirms the trend of automobiles moving from traditional manufacturing to cutting-edge technology fields. As a media person in the automotive industry, we finally no longer have to lament our industry while watching the press conferences of companies like Apple, Huawei, and Xiaomi. In the next ten years or even longer, the most exciting and cutting-edge releases will definitely be dominated by automobiles.

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.