Fang Yunzhou, founder and chairman of Nezha, said that new energy vehicles have reached a “Nokia moment” where the old and the new are replaced.
The latest data showed that the penetration rate of new energy vehicles in China exceeded 50 percent for two consecutive months in July and August 2024, and the number of car owners who purchased new energy vehicles exceeded the number of fuel car owners for the first time.
In July, retail sales in the domestic passenger car market reached 1.729 million units; Among them, the retail sales volume of new energy passenger vehicles was 879,000, with a retail penetration rate of 50.84% in the passenger car market, officially surpassing fuel vehicles.
Have to say, this is a milestone event in China’s auto market.
From the general trend, the penetration rate of new energy vehicles has taken three or four years to reach 50% from 5%, and the scale effect has reached a certain extent. As a result, not only Fang Yun Zhou, but also many people in the industry have put forward the “Nokia moment”.
Everyone knows a lot about Nokia. The undisputed hegemon of the feature phone era, but with the arrival of the smart phone, the speed of light has fallen, leaving a mark on business history.
Indeed, due to the rapid rise of new energy vehicles in China’s auto market, the speed of decline of fuel vehicles looks like Nokia’s shadow in those days. From the perspective of new energy vehicle enterprises, the overall fuel vehicle market has not kept up with the pace of development, and lags behind in intelligent configuration, technology research and development and product iteration. There is no doubt about this.
However, this does not mean that traditional cars should give up and watch the emerging new energy brands roar past them. On the contrary, they are also actively looking for opportunities to take advantage of the fast lane of transformation. As a result, we have seen Volkswagen and XPeng in full technical cooperation, Stellantis and Zrun forming a new company to jointly sell new energy vehicles, and Toyota has been working hard on solid-state batteries.
From this point of view, the new energy vehicle companies talk about “Nokia moment”, it is a bit wishful thinking. In the future, it is more likely that traditional car companies evolve and the gap between products shrinks.
Of course, this is not to say that all traditional car companies can be successfully transformed, just as some of the new power brands can fail. No matter which camp or brand, it is ultimately who can better adapt to market changes.
The giants have not given up on their goals
Traditional car companies have been seeking to transform, and giants in Europe, the United States and Japan have previously announced long-term goals for electric transformation.
Volkswagen Group aims to offer more than 30 pure electric vehicles by 2030 and launch an electric vehicle platform (CMP) exclusive to the Chinese market in 2026; Toyota decided in mid-2023 that it plans to sell 1.5 million evs annually by 2026 and reach 3.5 million by 2030; Mercedes-benz has also set a target of increasing the sales proportion of electric vehicles (including EV and PHEV models) to 50% by 2025. Mercedes-benz also plans to make full preparation for pure electric vehicles in the market where conditions permit by 2030. Earlier, BMW revealed that it will deliver 2 million pure electric vehicles worldwide by the end of 2025, and achieve 50% pure electric vehicles by 2030; Audi plans to launch at least 30 electric models by 2025, accounting for 40 percent of sales, according to its 2025 electric plan.
It turns out that this process is not smooth, there will always be twists and turns. They have given up on short-term targets for outside reasons: Volvo, for example, has abandoned its goal of selling only battery-powered cars by 2030; Mercedes announced earlier this year that it would abandon its all-electric plans, saying it would no longer stick to its original goal of fully switching to electric sales in major markets by 2030; Toyota recently announced a cut to its 2026 EV production target, from 1.5m a year to 1m; Gm lowered its outlook for its electric-vehicle plans, saying it won’t sell 1 million plug-in vehicles in 2025.
Although auto groups have changed their targets for the electric shift, that does not mean they are abandoning it. Vw, in particular, has invested heavily in electrification. According to the plan, the Volkswagen brand will spend 19 billion euros on future technology research and development by 2024, and a staggering 11 billion euros exclusively for electric vehicles.
In addition, Volkswagen has also cooperated with XPeng. A Volkswagen-XPeng model could be launched as early as 2025, “potentially bringing it to market a year earlier than planned”; The electronic and electrical architecture jointly developed by the two parties will also be integrated into the CMP platform jointly developed by SAIC-Volkswagen and FAW-Volkswagen, and four pure electric models will be developed for the compact entry market.
In other words, each company is still making efforts in the dark and explicit, trying to ensure that it can keep pace with its Chinese counterparts in the new energy sector.
The car joint venture is not Nokia
Still, the traditional giants are under pressure. Their domestic car joint ventures, in particular, are faltering in the Chinese market. Data show that from 2020 to 2023, the share of Japanese cars in the Chinese market will rise from 24.1% to 22.6%, and then to 17.0%, showing an obvious downward trend. In the most recent month of July, Japanese brands accounted for 12.9 percent of retail sales, down 3 percentage points from a year earlier. At the same time, in the joint venture brand camp, German and American car brands, also have a decline in the situation.
It should be said that in China’s new energy storm, the joint venture brand has been in a passive situation for a long time. Objectively speaking, the retreat of the joint venture brand is normal. Because they did not take the lead in landing as the new power brand, in the field of pure tram innovation, and research and development, endure huge losses, forced to open up a new world.
Think also, joint venture brand in the era of fuel vehicles, to product lineup, classic models everywhere; For brand influence, a family is a fan for generations; To market reputation, the Japanese department of fuel saving, German department of resistant to manufacturing, the United States department of muscle label in the majority of consumers by word of mouth; In terms of market sales, each brand has one or two popular models. Super players such as Volkswagen and Toyota can even achieve a popular model in each market segment, at least to achieve the monthly sales level of 10,000 units. For example, in the compact and middle market, if the popular model does not buy 20,000 units a month, they are embarrassed to go out.
The joint venture brand has been living a good life, of course, will not suffer from all shareholders’ doubts, to do new energy research and development. Even if it is to save for a rainy day, for the future, that is the business of international giants.
It is not surprising that the giants are far away from the Chinese market and not sensitive enough to the local market, coupled with the existence of large company disease, so they lag behind their Chinese new energy counterparts in terms of hardware and software.
For example, Toyota Motor has set up Toyota Research and Development Center (China) Co., LTD. (TMEC) to establish a new research and development system. More products will be developed and manufactured by Chinese engineers to better meet the needs of Chinese consumers. Vw has done a better job of delegating power. For example, SAIC-Volkswagen leads the development of several new Audi models and power systems. For example, SAIC Volkswagen also introduced local suppliers to upgrade fuel vehicles. The Tiguan L PRO and Passat PRO are equipped with the smart driving system provided by DJI. Faw-volkswagen has a similar operation.
Before that, it was almost unimaginable.
In other words, joint venture brands improve their product strength in a more flexible and effective way. In addition, fuel vehicles have product practicality that is difficult to match with current electric models, as well as a wider range of scenarios.
Therefore, a simple comparison between petrol cars and Nokia is obviously biased. We should take a more comprehensive view of the development of traditional car companies, rather than pure emotional output.
People comment on cars
Fuel vehicles have their own advantages, while electric vehicles have considerable shortcomings at present. If the two must compete to win, this is what the senior executives of the seemingly opposing traditional car companies and the new energy car companies are doing. For consumers, no such consideration exists. Who is good to choose who, this is the root.
It’s as if electric cars are the future, which is certainly true, but the popularity of transitional products such as plug-in hybrids and range extensions in recent years has shown the problem. Because plug-in hybrid and extended range models of the car experience is significantly better.
This also gives fuel cars a chance to breathe and catch up. Therefore, it is not accurate to take Nokia as a footnote to today’s car market. What do you think?
