New Energy Vehicles Will Have Two Models

The movement of the Chinese auto industry in the field of new energy has formed a situation in which “the people are doing their jobs”. This situation is no stranger to the Chinese people. What kind of consequences it will have, and Chinese cars will not be unfamiliar. However, Chinese policymakers waved their scepter and not only planned the development direction of China's new energy vehicles, but also stipulated the actions of the company. All vehicle manufacturers tried to meet them. Judging from the development plan for new energy vehicles announced by the media, China's policy makers have only become the final executors.

In this manner, New Energy Vehicles set its own coordinates for the world's auto market in 2010. If you have to find the so-called model, then this may be the only case in the history of the world's automobile development. In the world, no one country's policy makers and vehicle manufacturers make cars in this way.

Whether this kind of approach will achieve a breakthrough in new energy sources for Chinese cars will take time to test and history will record the commitment of all vehicle manufacturers. In my opinion, the logic contained therein has something in common with the 1980s when China’s auto industry began to compete for a joint venture.

At that time, in order to achieve a technical breakthrough in automobiles, China Automotive began a joint venture. Consistent with the trends in the development of the world's automobiles, this road choice is correct. However, at the operational level, joint ventures have been used as the only means. Almost all large-scale vehicle companies have participated in joint ventures. This idea continues to this day.

When China’s auto industry concluded its reform and opening up for 30 years, the evaluation of the technology-for-market changes became a topic of inconclusive thinking. Not only did Chinese autos fail to produce a reasonable and feasible evaluation system, but they also failed to produce objective and fair results. In front of the huge Chinese auto market, no vehicle manufacturers are willing to tilt their energy towards this. The result of this is that Chinese cars can only continue to rely on joint ventures. Similar to Hyundai’s practice of using parts and components groups to control the profits of joint ventures, it also exists under acquiescence.

In my opinion, this process is a process in which Chinese automobiles have changed their joint ventures by means of means. It is very likely to reappear in the field of new energy vehicles. In the state of the joint venture companies occupying the mainstream market, their products and technologies can only rely on the multinational car companies. These new energy vehicles imported by China from multinational automobile companies will become the dominant force in the market for a period of time.

The “Energy-saving and New Energy Vehicle Industry Plan” still under discussion is intended to set the thinking for the development of the entire industry even from the perspective of the Chinese market, but it cannot change the status quo of China’s auto industry and its inertia. There are a lot of amazing energy in China's local automakers' groups. In the Chinese market economy environment, as long as they do not clearly exceed this requirement, their cooperation with multinational automakers will not be affected. Therefore, responding to policy makers in planning is becoming common practice.

In this state, Chinese domestic vehicle manufacturers have two models for developing new energy vehicles. One is the model represented by BYD, Chery, Geely, and the other is represented by a large state-owned auto group.

In the first model, companies such as BYD, Chery and Geely can only seek roads through their own resources. When their operations respond to the needs of policy makers, they may be able to get support. When they cannot meet the needs of policymakers, their development will be more limited.

If they cannot use their current influence to integrate more resources for themselves, their risks will be relatively high in developing new energy vehicles. And their most important task now is to increase brand influence.

In the second mode, large state-owned auto groups have established their own brands. They can develop new energy vehicles through their own branded platforms. Technically, they will conduct a new round of exchanges with multinational car companies. This is what they absorb. The main way of resources, and this is also their main reason to dare to announce the development of new energy vehicles.

In the process of joint ventures with multinational car companies, they have experienced quite a long game. Multinational car companies are already familiar with the strengths and weaknesses of their partners. In the case of multinational car companies, they need Chinese partners to provide government and policy support for their business development. They need China's complete adaptation to China's unspoken rules. The Chinese partners need to obtain the technology provided by foreign companies in this process.

With such a foundation, the two sides will negotiate on the next exchange. Several multinational automakers and China's large state-owned auto companies are already doing this work. The heads of several multinational automakers say that only by doing so can the two sides live long-term symbiosis.

Corresponding to the pursuit of technology, these two ways will be the main direction of China in the field of new energy vehicles.