ChuXing BaiRen Media: Focusing on the Evolution of the Automotive Industry Chain

Author: Zheng Wen

Since I don’t know when, the automotive industry has started to become notorious for using bombastic language. These words and phrases follow one principle: the more extravagant the better, even if they bring criticism in response.

Vague statements have now become a form of carnival.

“Surpassing Tesla in three years”, “Achieving a sales target of 800,000 vehicles by 2025”, “The first automaker in the industry to promise that ‘autonomous driving accidents will be the responsibility of the OEM’ “…

However, aside from the initial uproar that these statements generate, the rest is scrutiny. Is it a promise or just empty words?

Zeekr: Is It Just Bluster, or Are They Serious?

“Onzeen” released a strong statement on July 15, the founder of Zeekr, Zhu Jiangming, declared his intention during the 2.0 epoch strategic press conference in Jinhua, Zhejiang. This statement was this: “Surpass Tesla in three years.”

This statement specifically refers to Zeekr leading Tesla in intelligent driving technology. As part of the plan, Zeekr aims to complete laser radar production by the end of 2030 and achieve fully autonomous driving by 2024.

This isn’t the first time Zeekr has challenged Tesla. When the first model, S01, was launched, it was claimed by the company that the autonomous driving assistance system was as good as Tesla’s. However, the S01 did not sell as expected.

Perhaps Zhu Jiangming aims to use this challenge as an advertising strategy to obtain brand exposure and increase sales.

Perhaps he genuinely believes that Zeekr can actually surpass Tesla in three years. However, this “taking a sword to a boat” type of commitment isn’t entirely credible, and may create more doubts. Even if Zeekr overtakes today’s Tesla in three years, what will happen to Tesla during those three years, and how much longer will it take Zeekr to surpass them?

If “surpassing Tesla in three years” is understood as a marketing tactic chosen by a startup for brand exposure, then announcing the sales goal of 800,000 vehicles by 2025 at the press conference is even more grandiose.

For a startup company that has just obtained its automobile production license and only produces around 4,000 units per month with a micro vehicle model, the magnitude of this goal is obvious, and it is not inferior to “surpassing Tesla in three years” in terms of its high level of ambition.

For a technology-oriented enterprise, what is needed is not just to inspire morale and enhance confidence, but above all a realistic attitude and persistent exploration.

Zeekr, are you wide awake, or are you drunk?## WM Motors: Falling Behind or Building Momentum?

“Every day people ask me if WM Motors is falling behind.”

“In fact, we are not, just the ‘quiet period’ is a bit long.” On July 15, WM Motors’ founder, chairman, and CEO Shen Hui responded publicly to external doubts.

In September 2020, WM Motors officially submitted an application to the Science and Technology Innovation Board for IPO and still has not made substantive progress after 10 months. Coupled with the gap in sales between WM Motors and the top players in the new car manufacturing industry, such as NIO, XPeng, and Li Auto, becoming larger, external doubts are getting louder.

Data shows that in the first half of this year, WM Motors sold a total of 15,665 vehicles. In contrast, NIO, XPeng, and Li Auto sold 41,956 vehicles, 30,738 vehicles, and 30,154 vehicles respectively. It is obvious that there is a significant gap between WM Motors and the top new car manufacturing forces.

To this, Shen Hui said at a mid-year media communication meeting that “the battle of the smart EV market has not been completed in the first half, and it is far from the stage of determining the winner, so there is no such thing as falling behind.”

Everyone in the internet car-making industry want to be China’s Tesla. Brands like NIO and XPeng hope to use their own dimension to compete with Tesla and enter the middle and high-end markets.

However, Shen Hui does not follow this benchmark. He hopes that WM Motors will become an entity like Volkswagen and Toyota, where “technology inclusiveness, igniting the mainstream” and providing “smart pure electric cars that are cool and affordable” are the brand’s label.

WM Motors predicts that the market structure of new energy vehicles will accelerate optimization from “dumbbell” to “spindle” shape, and by 2030, the main new energy vehicle market segment in China will occupy approximately 60% of the market share. The penetration rate of mainstream new energy vehicles costing between RMB 150,000 to RMB 250,000 is expected to increase from 3% to 40% in the next decade.

For WM Motors, this is when they will be fighting on their own turf.

However, just because the market is there does not mean it can be easily grasped. It is worth exploring whether WM Motors fully understands what is the affordable and popular type of vehicle that users really enjoy.

Even Volkswagen and Toyota remain vigilant and fearful from time to time, so WM Motors should be even more reverential.

Can the Elephant Turn Around to Shake the Earth?

“Our strategic goal is to become the leader in the global pure electric vehicle market, and we are moving towards this goal.”After many twists and turns, Herbert Diess, CEO of Volkswagen Group, who vigorously advocated for electrification transformation, was finally granted a contract extension, which will extend his tenure until October 2025. This means Diess can personally fulfill his commitment to “replace Tesla as the world’s largest electric vehicle manufacturer.”

At the same time, Volkswagen Group also sent a signal to the outside world that they will no longer hesitate and are determined to firmly embark on electrification and digital transformation.

From last July, when Diess handed over the management of the Volkswagen brand, to the contract extension in July this year, the Supervisory Board’s attitude toward Diess has undergone a 180-degree turn, from questioning to supporting to fully recognizing. The internal resistance due to conflicts with the trade union and the Supervisory Board’s trust crisis will become a thing of the past from this moment on.

The words of Hans Dieter Poetsch, Chairman of the Supervisory Board, say it all: “Dr. Diess and his management team have successfully pushed forward the transformation of the Group in recent years. The Supervisory Board believes that, under the leadership of Dr. Diess, the entire company will have the best conditions for sustained successful development in the coming years, especially when considering the ‘2030 strategy’.”

On the evening of July 13, at the 2030 strategy release conference of Volkswagen Group with the theme of “New Auto,” Diess further interpreted the group’s understanding of future travel and strategic layout for the next ten years.

The strategic focus is to bet twice as much on key technologies such as software, platforms, and batteries that can win on new tracks, on the basis of improving profit margins and reducing costs. According to the plan, by 2030, the share of pure electric vehicle models in the Volkswagen Group is expected to rise to 50%.

“In the future automotive industry, profits and revenue sources will gradually shift from fuel vehicles to pure electric vehicles, and under the promotion of autonomous driving technology, they will turn to software and services.” In order to achieve this goal, Volkswagen Group will maximize the advantages of scale for traditional car companies to control costs.

To form a moat and implement the SSP platform + standard battery cell + self-developed software platform “combination punch” strategic layout, Volkswagen Group has earmarked €73 billion for the period 2021-2025. Although this is a large investment, Diess believes that the market’s return will be more substantial. Diess optimistically predicts that the profit margins of fuel and pure electric vehicles will be equal within 2-3 years.

From the era of Das Auto under Martin Winterkorn to Diess’s New Auto, can the elephant’s turnaround shake the earth?An indisputable fact is that even Volkswagen has not been able to truly open up China’s mainstream new energy vehicle market. The cumulative total sales volume of the two ID.4 domestic models from January to May is less than 5,000 units.

Pioneering a new era, leading a market, the road ahead is still long and arduous.

Zeekr Coupon Has Stopped Moving, Secretly Raising Prices?

“In the past 40 hours, the product, R&D, manufacturing, and supply chain teams have repeatedly demonstrated and evaluated multiple solutions, and finally decided to first respect users’ choice rights and open up three new configuration options for all users. The additional investment generated by this will be borne by Zeekr Coupon.”

“Joy turns to sorrow,” it can truly be said that this is the current true portrayal of the Zeekr Coupon brand.

At the time of its launch, based on Geely SEA platform, supporting 800V high-voltage fast charging, 3.8s zero-to-100km/h acceleration, and 700km ultra-long range… with super many technology configurations plus a starting price of less than RMB 300,000, the Zeekr Coupon 001 “Standard Edition is the Top Edition” instantly ignited consumers’ enthusiasm.

Within two months, new car orders exceeded 70,000, to the point where Zeekr Coupon CEO An Conghui had to come forward to announce that the production capacity of the Zeekr Coupon 001 had been sold out for 2021, and that new cars would stop accepting RMB 2,000 small deposit intentions starting from June 15 and released new delivery rules.

At first, things were only developing in the direction of “Versailles”, but then the picture changed. Many car owners found that after the new delivery rules were announced, the Zeekr Coupon 001WE model had increased in price. The pre-subsidized price of the WE model before the deposit for the large deposit was RMB 299,000, an increase of RMB 18,000 compared to the price at launch.

The official explanation for this was that since it was not possible to determine the specific national subsidy amount in 2022, this price was the net price of the product without deducting the subsidy, and the final transaction price would be reduced by the national subsidy amount.

This game of words of “before” and “after” led to a misunderstanding among consumers.

Of course, this was just the tip of the iceberg. Later, consumers found that the previously mentioned SEA platform supporting 800V high-voltage fast charging led them to believe that the Zeekr Coupon 001 had the ability to support 800V high-voltage fast charging, but in fact, it currently only supports 400V fast charging. Fooled again.

There is more. In the previous promotion of Zeekr Coupon, they used content such as “First Launch Umbrella Frequency Noise Reduction” and “Not Weakening After 8 Consecutive Accelerations.” However, all of these disappeared from the product introduction in the app. The WE version’s rear privacy glass and the YOU version’s variable panoramic sunroof have also become a user’s one-sided wish.

What you see in front of you is just one cold sentence: “That’s a different price.”Similar to the routine, it happened again and again. Shortly after, ECOOL was caught changing the motor supplier. Although ECOOL ensured that the power of the electric motors provided by different suppliers remained the same, only the torque parameters were different, the vehicles might be delivered in the form of blind boxes, and the supplier might be from Japan or Ningbo, solely dependent on luck.

ECOOL can be said to be actively participating in the internal competition, stacking many configurations that are ultimately difficult to fulfill, thus becoming a typical instance of being consumed by itself. Looking back at the lively launch event, if everyone knew the result would be like this, the applause would not have been so enthusiastic and sincere. ECOOL undoubtedly hurt the emotions and trust of consumers.

An Conghui’s apology letter to consumers is sincere, and also directly provides a solution. However, the behavior of many Big Order consumers who turned orders without saying a word has declared that the injured hearts are difficult to recover.

Making an empty promise is a dangerous game.

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.