The Formula for Success in the New Energy Vehicle Race: Sales and Publicity

The rule for success in the New Energy Vehicle (NEV) race has been proven to be made up of two indispensable factors: sales and publicity. Having these two factors means you have successfully grasped half of what is needed. The rest, which comprises of many variables such as technology, product, funding, market, and operations, needs to be left to time.

Guangqi Aiyun (Aion) has already succeeded in the first half.

It has sales. Previously, for four consecutive months, the monthly sales volume exceeded 10,000 vehicles. In August, the sales volume reached 11,600 vehicles, achieving a year-on-year increase of 115 percent. It is estimated that the September sales volume will not disappoint. Among them, Aion S has become a hot seller, with cumulative sales exceeding 100,000 vehicles, and average monthly sales stable at 7-8 thousand units, steadily securing a position in the top ten NEV models list every month. It has also made its way into the top five of the domestic NEV market sales rankings for January to June this year.

And it is not short of publicity. This new brand, which was born from a state-owned enterprise and announced its brand independence only in November last year, is eager to take off its state-owned label and step into the capital market as an independent brand. Therefore, it has been releasing various topics consistently to attract attention from outside. It is well-known that there was an announcement of “80% charge in 8 minutes, and 1000 km range” and “5 minutes charge, and 200 km range.” There is no denying the significant effect of these hot topics. Such topics complement the sales success.

However, the bright surface cannot conceal the urgency behind. For Guangqi Aiyun, the mixed-ownership reform and IPO are another starting point outside sales. The current NEV race is crowded and brutally competitive, with the capital market beginning to cool down, and opportunities quickly disappearing. Running against time, completing the reform, and achieving IPO success will determine the second half of Guangqi Aiyun’s success. Perhaps it is because of this urgency that on September 29th, Guangqi Aiyun shouted the slogan “All V Can” to the outside world by releasing the AION V Plus for IPO.

“All V Can” Slogan

There are two special points to the AION V Plus, which was released on September 29th.

First, the timing of the release of the vehicle. On August 30th, Guangqi Aiyun had just released the super fast battery technology and A480 super charging pile world premiere. On the same day, Guangqi Group issued an announcement on Guangqi Aiyun’s accelerated mixed reform and timing for IPO. Barely a month later, AIONV Plus was released to the market in a very grand way. (General Manager of Guangqi Group, Feng Xingya, General Manager of Guangqi Aiyun, Gu Huinan, and Deputy General Manager of Guangqi Aiyun, Xiao Yong were all present, and Happy Mahua performed at the IPO) This highlights the importance of the vehicle to Guangqi Aiyun. It also symbolizes rushing to take opportunities while still hot.Two is the Slogan of this car. GAC Aion not only gives it the title of “Interstellar Mothership”, but also shouts out the declaration of “All V Can”. It is too superficial to simply classify this as another “dare to speak” from GAC Aion, although GAC Aion has always been dare to speak. From AION S to AION Y, from SPlus to V Plus, dozens of versions of four car models can easily find words such as “intelligent, technology, trendy” and other beautiful words they are wearing. GAC Aion spare no effort to package its products, more than others.

But this declaration of “All V Can” is more like a declaration of war, or, as a carrier for AION V Plus, GAC Aion uses it to prove to the outside world and the capital market that in addition to sustained and increasing sales, GAC Aion’s technological and R&D strength is second to none and can be experienced through its products in mass production.

AION V Plus does carry GAC Aion’s latest technological strength. GAC Aion has just launched the “charging for 5 minutes, driving 200 kilometers” ultra-fast charging technology and A480 super charging pile technology, both of which are applied to AION V Plus for the first time.

In March of this year, GAC Aion’s magazine battery system safety technology was also applied to AION V Plus. AION V Plus’s range can reach 702 kilometers.

In addition, GAC Aion has applied its ultra-long-distance summoning and parking function and NDA intelligent navigation assistance system in AION V Plus.

The ultra-long-distance summoning and parking function is a low-speed driving assistance function, which uses ultrasonic sensors and cameras carried by the vehicle to search for parking spaces and perceive the current environment. At present, this function not only supports underground and ground parking lots, but also supports non-marked parking spaces outside the venue.

NDA intelligent navigation assistance system is similar to Tesla’s NOA, XPeng’s NGP, and NIO’s NOP. As a navigation driving assistance system, it can currently independently overtake, change lanes, enter and exit the expressway, enter and exit the ramp, and merge onto the main road according to navigation information combined with high-precision map data.Based on the current overall level of technology in the industry and for safety reasons, all smart navigation and assisted driving systems provided by automakers such as Tesla’s NOA, XPeng’s NGP, NIO’s NOP and Aiways’ NDA, and others still require timely human intervention. However, technically speaking, Aiways’ NDA has the technical capabilities to compete with the top players in the industry.

In addition to demonstrating their technological prowess, Aiways has impressed consumers with their services and offerings. Specifically, Aiways has introduced the “AION Care+ True Residual Value” repurchase plan for the AION V Plus.

This repurchase plan promises customers that within two years of the purchase of the AION V Plus, if they choose to exchange it for any other Aiways model, the manufacturer will buy back the original car at 70% of the market guide price at the time of purchase, as long as the vehicle has not been involved in any major traffic accidents.

The repurchase plan is clearly outlined on the Aiways app: 1) repurchase will be based on the official guide price, with the manufacturer making up the difference if the market price is below 70%; 2) users can choose any dealership nationwide to process the repurchase evaluation procedures; and 3) vehicle condition inspection fees will be waived during the repurchase process, and the repurchase criteria will be transparent and enforceable.

Regarding the intentions behind the “AION Care+ True Residual Value” repurchase plan, Aiways’ Vice President Xiao Yong explained that they “hope Aiways’ example can truly address users’ pain points, or lead the industry to jointly solve one of the major obstacles to the development of new energy vehicles – the issue of depreciation.”

To win the full race, however, Aiways will need to continue to perform at its current level, despite increased competition from other major players in the new energy auto industry. With strong competition based on factors including technology, product, capital, market, and operations, the new energy vehicle industry has already entered a phase of rapid consolidation.

As the market continues to evolve, consumers and the capital market are becoming increasingly selective in choosing which enterprises to back, making it crucial for companies to show strong leadership and excel in the aforementioned factors.

Finally, it is worth noting that sales of new energy vehicles are increasingly concentrated among a small group of “head” enterprises, including Tesla, Li Auto, XPeng, NIO, Aiways, and LeapMotor, while traditional players such as BYD, SAIC-GM-Wuling, SAIC Motor, GAC Aiways, and Great Wall Ora lead in terms of sales volume. These companies occupy more than 70% of the market share.Capital markets have been a major boon to companies such as Tesla, BYD, NIO, Li Auto, and Xpeng, providing sustained funding that is clearly advantageous for subsequent R&D. Conversely, companies without funding may face an uncertain future.

In addition, for companies lingering at the bottom for a prolonged period, surviving has become even more difficult. Lacking funds means they have no say and no sales. Mid-tier companies are faced with a crucial choice of either moving up or down, as nobody can survive by staying put.

Guangqi E-An faces the problem of having achieved only half of its objectives. Relying solely on strong sales figures, it has definitely joined the ranks of top-tier companies. However, it has yet to enter the capital markets, which constitutes a significant drawback. Even with Guangqi E-An’s claims of being financially backed by Guangqi Group and plenty of money to spare, Guangqi E-An’s CEO Gu Huinan says confidence in the company’s subsequent R&D with technological innovations will only come from the bolstering power of capital.

Furthermore, according to Gu, Guangqi E-An’s establishment was to explore new paths of industrial development for Guangqi Group. This means that Guangqi E-An must remove itself from the public enterprise label and present itself anew to the outside world. This approach makes it easier for Guangqi E-An to understand why it insists on mixed ownership reform, aiming to integrate new ideas in its company policies, says Gu.

In addition, Gu is insistent that Guangqi E-An will adhere to its initial development plan of “EV+ICV” (electric vehicle + intelligent connected vehicle). Based on Guangqi E-An’s technological R&D and usage in batteries, charging, range, and NDA, as well as its plans for the newly-developed GEP3.0 platform and L4 autonomous driving technology, its development plan is indeed in line with its “EV+ICV” strategy.

However, frankly speaking, this development path requires continuous support with a large amount of funding, and increasing numbers of consumers need to recognize and acknowledge it. In order to maintain brand development and increase its voice, to remain steadfast in the top tier, and to achieve a successful outcome, Guangqi E-An needs to enter the capital markets.

Perhaps, with the belief of “I Want to Win” and the sales boost coming from its strong performance, Guangqi E-An can become the first example of successful state-owned enterprise reform in the new energy vehicle industry.

However, some problems still cannot be ignored. For example, as the penetration rate of new energy vehicles exceeds 20% and large numbers of household consumers enter the market, will Guangqi E-An’s positioning towards individual customers, and the AION S model’s reliance on ride-hailing users, become a challenge for welcoming household customers? From being a favored brand among internet celebrities to transitioning and guiding household users to its brand, Guangqi E-An faces significant hurdles in its journey from “All V Can” manifesto to the fulfillment of its motto “I Want to Win.”

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.