More than 200% of China's new energy auto companies will be eliminated

There is no such a grand event in any part of the world. According to China Automotive Research, there are more than 200 new energy auto companies in China. There is little doubt that 90% of the existing 200 new energy vehicle manufacturers, including their successors, will be eliminated.

Cars are one of the most typical companies that need to have economies of scale. Detroit, the global car manufacturing center, has only three "giants" left after a hundred years of stigma.

Even if the rest of the "survivors" are doing, the FCA is still wielding the "straw" and hopes to be committed to people. After being rejected by General Motors, Malchonet handed the olive branch to the Volkswagen Group CEO Matthias? Muller's hand. The strategic masters of the automotive industry have clearly realized that only by continuing to expand their scale can they improve operational efficiency, reduce competition, and survive a new round of technological change.

The madness of 200 new energy car manufacturers

Compared to the run-down Detroit, the Far East is completely hot. The wealthy Chinese people regard the car as a symbol of status and status. The "mobile sofa" with four wheels is the favorite of the Chinese mother-in-law except the house.

In 2016, it sold a staggering 28 million cars, including 550,000 new energy vehicles. China's car sales have accounted for 30% of the global market share, contributing more than 70% to the global automotive market. The global market share of new energy vehicles is over 50%.

According to the European Automobile Industry Association, the number of thousands of people in the Chinese auto market has reached 102, while the US has reached 808. There is no doubt that the Chinese will also devote more passion to the new car market.

The Chinese government has blew the clarion call for new energy vehicles. The official plan shows that by 2020, the sales of new energy vehicles in China will exceed 2.5 million. To this end, the government will not hesitate to spend tens of billions of dollars in budget, subsidize new energy vehicle manufacturing enterprises, and jointly cultivate and support the development of the new energy vehicle market.

New energy vehicles are full of the ambition of this country to become a strategic emerging industry, and bear the expectation that China's core industries will seize the global strategic commanding heights.

Passion and dreams are instantly ignited. Global funding, talent and technology. Even with a group of Germans who are unfamiliar with their lives, recruiting friends and accompanying thousands of miles to China, has unprecedentedly invested in China's new energy vehicle entrepreneurial tide. After talking with the Nanjing government, they claimed to invest 11.6 billion to build a new energy vehicle factory there.

Trump, the CEO of the United States of America, who screams "job, job, job..." all the time, after seeing it all, is 100% envious of hatred.

I heard that the recent sharing of bicycles is more popular. Another newly-exploited investment field is “Charging Treasure Sharing”. Wang Sicong, secretary of the entertainment circle disciplinary committee, said angrily that if the charging treasure sharing can make him live broadcast. Compared with the smoldering of new energy vehicles, shared bicycles and shared charging treasures are simply not even hair. Just by the end of 2016, 30 new energy vehicle companies that can count the data are planning to invest 300 billion to build a car.

In July 2016, statistics from the China Automotive Technology and Research Center showed that China has recorded more than 200 new energy vehicle manufacturers. 100 years ago, the scene in Detroit was destined to repeat itself in the East of the world, and 90% of China's electric vehicle manufacturers will die.

By the end of 2016, there have been 14 investment plans and capacity planning for emerging car companies. By 2020, there will be an increase of 2.29 million new energy vehicles with a total investment of RMB 106 billion. Traditional car companies are not idle, and will invest 130 billion yuan. The planned total capacity in 2020 is 3.8 million, of which the new energy capacity is 2.53 million. This is far from all. At present, there are more than 200 new energy vehicle companies registered in the country, and there are dozens of them in Shanghai alone. If these 200 capacity plans are similar to the 14 emerging new energy companies above, the scale of future capacity is simply not conceived. 10 million vehicles? With such a huge plan to increase production capacity, has the market digested?

In 2016, the sales volume of new energy passenger vehicles was 328,800 units, compared with the total sales volume of 24 million passenger cars, the ratio was only 1.37%! China's new energy car market has been running crazy, but compared to people's desires and madness, the speed of all this is so slow. In 2016, sales of new energy vehicle passenger vehicles increased by 85.99% year-on-year, 200.72% in 2015 and 289.82% in 2014. According to the current 86% growth trend (very unlikely), the new energy market is expected to be around 4 million units until the subsidy is abolished by 2020. The official expectation is 2,500-3 million.

This market will be smashed by the three local players of China's domestic auto brands, multinational joint venture car brands and new entrants. According to Chen Anning, chairman of Guanzhi, 50,000 vehicles can break even, and Weimar’s breakeven point is 100,000, and Weilai’s breakeven point is also 100,000. In the most optimistic way, the forecast is that if 2020 automakers can get a 25% market share of energy vehicles, it is estimated that they will record 750,000 units. With an annual sales of 50,000 vehicles to survive, only 15 car companies can survive. Of course, the reality will be more cruel, the sales of the head car companies will be greater than the average, and the tail will be much lower than this figure.

The price strangulation war has begun when the market is not big enough, and when there are too many market participants, the price war will inevitably erupt.

In 2017, Q2, the traditional EV launched a large-scale price war. The price of WeChat electric vehicles with a cruising range of less than 200km is directly from the original 120,000 yuan to the 60,000 yuan range. This happened after the subsidies for new energy vehicles fell.

All market participants have to follow up. The price war was initiated by Beiqi New Energy, and then small electric vehicle manufacturers such as Jianghuai, Chery, Jiangling, Zhidou and Zotye all announced new models and price cuts. The result of such a price war is only one, and the amount is not big enough, and it is gradually being driven out of the market. If the financial strength is insufficient, it will be dragged down by the price war. Both the scale and the funds are the dead spots of the emerging entrants.

The bigger giant is preparing to enter. After 2020, as China begins to push and dominate the wave of globalization, China's new energy vehicle market will open to the global automobile manufacturing giants, and Chinese operators will be exposed to fierce fire from all over the world. It includes traditional tycoons such as GM, Ford, Toyota, Volkswagen, BMW, Mercedes-Benz, Audi, as well as technology upstarts such as Tesla, as well as cross-border hikers like Apple and Huawei.

They will not only bring price wars, but also bring new technology and new car species. Whether it is from the market capacity, or from market competition or historical experience, more than 20% of new energy vehicle manufacturers are almost inevitable.

You need to pay attention to whether your company has entered the top 10 of the sales ranking.

Who will pay for the failure?

The process of this evolution will be very fierce. Banks and VCs will probably become big losers, and many investments will become bad debts. Greed will definitely cost you.

Many decision makers who participate in this "tough competition" will be responsible for the failure.

For the practitioners, it is not too bad news. As long as the size of the new energy vehicle market is growing, it will still require a large number of practitioners, and the employment impact will not be too great. Not every place will become a new energy vehicle manufacturing base. Think about it, do you have an industrial chain? Do you have a market? Do you have mature industrial workers and talent supply? Can your transportation and logistics support such a complex supply chain? If not, please think twice.

China's new energy auto industry is bound to be brilliant. But you may not have the luck to enjoy the fruits of victory. Let me talk about your views, and we are looking forward to it.