Recent years have witnessed a new generation of electric vehicle companies chip away at China’s auto market share, and traditional car firms are gradually conforming to the trend with the launch of their own new energy sub-brands. According to October delivery data, NIO, XPeng Motors and Li Auto, the leading trio of Chinese EV manufacturers, are no longer champions in the market, as they have now been overshadowed by new energy sub-brands of traditional vehicle firms such as Aion, AITO and Zeekr.
Within China’s NEV field, fresh entrants have always occupied leading positions and maintained steady growth. One exception is BYD, which took the lead in decisively transforming to a new energy path, while most other traditional car companies have not been able to gain an advantage in the past three years. This is reflected not only in the sales of new firms, but also the market recognition of new models.
Compared with the “new EV forces,” traditional Chinese car manufacturers were indeed slightly inferior in terms of price and model quality. As electrification and intelligence became the overall focus of the market, resulting in a failure to obtain the first-mover advantage, this trend seems to be gradually reversing.
In October, the sales volume of NIO, Li Auto and XPeng reached 10,059 vehicles, 10,052 vehicles and 5,101 vehicles respectively, down 7.5%, 12.8% and 39.8% from the previous month. Among the sub-brands of traditional car companies, the sales of Zeekr (under Geely) reached 10,119 units, an increase of 22.2% from the previous month. Those of Huawei-backed AITO also reached 12,018 vehicles, an increase of 12,018 vehicles from the previous month. Although GAC’s Aion remained flat month-on-month, reaching 30,063 vehicles, it increased by 149% year-on-year.
“The fundamental reason is that there is no threshold for new energy vehicles, so traditional car companies can soon surpass them,” an engineer of Xpeng Motors said to the media. This employee first worked at a traditional car company, then switched to XPeng. He added that after understanding the routine of new EV makers, traditional car companies then recruited staff from internet companies to learn the iterative style of internet products and improve the development process.
One of the cores of this process is “running in small steps and iterating quickly,” which is the rule followed by the new EV forces to gain a first-mover advantage. They initially reduced the R&D cycle of vehicles from 60 months to 36 months, then improved the performance of vehicles and enhanced the user experience through software updates.
However, technology accumulation of traditional car companies is more mature than those of new EV makers. One example is that platform technology can be used to quickly decouple agile development modules and improve development efficiency, such as Changan Automobile’s SDA platform, Geely’s SEA architecture, BYD’s e-Platform 3.0 and GAC’s AEP 3.0 platform.
On the other hand, traditional car companies have more advantages in controlling supply chains such as auto-grade chips and batteries compared to the new EV makers. First, the scale of production and sales of traditional car companies is larger, which affects the supply chain. Stronger bargaining capability and a more stable supply of components are traditional firms’ key strengths. Under the influence of COVID-19, this stability is particularly important.