On November 29, 36氪WISE2022 Future Energy Venture Capital New Trend Conference was successfully held. This year we use "Tipping Point" as the theme and focus on the new energy market, covering multiple subdivision scenarios such as lithium-ion batteries, sodium-ion batteries, wind power, photovoltaics, energy storage, hydrogen energy, electric vehicles, etc. By gathering friends from the new energy industry, capital, academia and other fields, we will comprehensively discuss the industrial ecology and development changes of my country's new energy market, and look forward to the trends and new growth points of the new energy industry in the future.
Liu Feilei, Secretary of the Board of Directors of GAC Aian, delivered a keynote speech entitled "New Energy Vehicle Industry Transformation and GAC Aian Development Strategy". In Liu Feilei's view, as subsidies recede, the new energy vehicle industry will usher in a major turning point, and corporate competition will become polarized. In the future, there will be two major changes in the development of enterprises in the field of new energy vehicles: First, the original competition based on a single product will transform into a competition based on the integration of products and ecology. At the heart of this change are technology and cost. Enterprises must have leading technologies to continue to attract customer attention. Second, in the process of entering the mainstream market, companies that have the foundation of a large industrial system and form a low-cost, high-quality system will have strong enough competitiveness.
Secretary of the Board of Directors of GAC Aian Liu Feilei
The following is the transcript of Liu Feilei's speech, compiled and edited by 36 Krypton:
Thank you to the organizer 36 Krypton for the invitation to participate in the "Future Energy Venture Capital New Trend Conference". I am Liu Feilei, Secretary of the Board of Directors of GAC Aian. Now I will report to all participants the changes in the new energy vehicle industry and the development strategy of GAC Aian.
Global car companies have been accelerating their new energy transformation since 2016. We will see that the United States is leading in vehicle technology and intelligent connectivity. In China, the national strategy is clear and clear, national policies are released in a timely manner, and the infrastructure is relatively complete. Since 2015, China has become the world's largest market for new energy vehicles for seven consecutive years, accounting for more than 50% of the market in most periods. Judging from the development situation in the past few years, Europe and Japan have lagged behind in this regard and are now accelerating their transformation.
New energy vehicles are essentially a policy-driven market. We can see that the new energy vehicle industry currently still has subsidies, which may be canceled next year. Driven by policies and capital, the new energy vehicle market has gradually transformed from a 2B market to a 2C market. Consumer car purchasing has changed from policy behavior to active choice. At the same time, technology has developed significantly during this process, EV batteries have begun to enter a mature stage, and ICV has also begun to enter a period of rapid development. However, under the current epidemic situation, Sino-US trade war, and global geopolitics, supply chain difficulties and high costs will exist for a long time.
Pure electric vehicles are an important direction for national development. Since 2009, the Chinese government has listed pure electric vehicles as one of the seven strategic emerging industries. In the era of traditional fuel vehicles, Germany, the United States, Japan, etc. have a century of accumulation in engines, transmissions, and . Therefore, China's independent automobile brands can only adopt a follow-up strategy. But new energy vehicles provide new development opportunities. Therefore, China's development of new energy vehicles is a need for energy security, a need to change lanes to overtake, and a need to deal with environmental issues. Driven by technology, electric vehicles have five major characteristics: cruising range, energy supply, safety, cost and quality. In the past few years, especially in the early days of the new energy industry, there were no exclusive pure electric cars on the market, and there was no truly good car in the oil-to-electric mode.
In 2016, the industry began to have pure electric exclusive platforms, which greatly improved issues such as battery life, energy replenishment, and safety. However, there are still some problems in terms of cost and output value . As technology advances, these problems will quickly improve. At present, the popularity of smart cockpits is accelerating, and the development of smart autonomous driving is accelerating. The ceiling of smart cockpits is not obvious. Especially with the full development of digital space attributes in the field of smart electric vehicles, smart cockpits have been greatly popularized. GAC Aian's revenue from the smart cockpit segment from January to October this year can basically reach the target of 100 million.
driverless driving has also entered a stage of rapid development.In the future, fully driverless driving will promote true car sharing. With the support of technology, policies and capital, new energy vehicles have entered the fast lane of development. At present, the penetration rate of and of new energy vehicles has exceeded 30%, which means that China's development goal of 20% penetration rate of new energy vehicles in 2025 has been achieved three years ahead of schedule. From January to October this year, the market size of new energy vehicles was 4.4 million units, which doubled from last year's to last year, and is expected to reach 6 million units this year.
As for market entities , independent brands are setting up independent new energy companies one after another to develop their own pure electric brands. GAC has been developing a dedicated pure electric platform since 2016. This may be the earliest development and the most significant achievement among state-owned enterprises. In terms of international car companies, traditional Volkswagen, Toyota, and Honda are also accelerating their electrification strategies. The software-centric strategy of Tesla is also a banner of new energy. On the other hand, new car-making forces in the past few years have also achieved certain development and formed a certain scale.
As state subsidies gradually withdraw from the market in 2024, the competitiveness of enterprises needs to be significantly improved. If the corporate system and mechanism are not very good and have not thought about how to deal with cost issues, they will face great challenges. Because the entire new energy industry is not yet profitable, for example, the price of battery raw materials has soared, the industry chain has not yet reached a large enough scale, and a single enterprise has not reached a large enough scale. Therefore, there will be a major turning point next year, and the reduction of subsidies will accelerate the polarization of the industry.
There will be two major changes in the competition among new energy vehicle companies:
First, the original competition based on a single product will transform into a competition based on the integration of products and ecology. At the heart of this change are technology and cost. Enterprises must have leading technologies to continue to attract customer attention.
Second, in the process of entering the mainstream market, companies that have the foundation of a large industrial system and form a low-cost, high-quality system will have strong enough competitiveness.
Next, I will introduce the development of GAC Aion in recent years. GAC Aion is the only smart car company under Guangzhou Automobile Group that focuses on pure electric vehicles. In 2016, when the whole world was discussing the new four modernizations of automobiles, GAC carried out a very forward-looking strategic layout. The group company made a decision in 2016 and officially launched it in 2017, establishing the first intelligent network-connected new energy industrial park in the country. GAC also invested 45 billion to build China's first pure electric exclusive factory on 7,500 acres of land, establishing an EV+ICV focus route. Since it was put into operation in April 2019, the factory has reached a production capacity of 200,000 and . The second factory was completed in October this year. At present, GAC has formed two factories with a production capacity of 400,000, and the number of employees has reached about 7,000.
Let’s take a look at the development history of GAC Aion. During the 13th Five-Year Plan, GAC Group was the first domestic enterprise to start electrification and intelligent networking. During this process, GAC has explored all hybrid routes, such as hybrid, PHEV, extended range, hydrogen power , forming a rich reserve of technology and talent. Currently, we have ten hydrogen fuel vehicles conducting demonstration operations in Guangzhou. In 2017, GAC Aian entered a stage of rapid development with a strategic focus on pure electric vehicles. Since 2017, we have created 5 phenomenal products, with product prices ranging from RMB 100,000 to RMB 1 million and above.
In the past few years, GAC's compound growth rate has exceeded 120%, ranking among the top three in the mainstream new energy vehicle market. A total of 420,000 vehicles have been sold since it was put into production in 2019, and the capacity utilization rate of and has also reached more than 150%. From January to October this year, GAC Aian still maintained rapid development. The current production and sales totaled 240,000 units, fully exceeding the 200,000 target set by the board of directors last year, and development will accelerate in the future.
After five years of development, GAC Aian has firmly ranked third in the mainstream new energy vehicle industry. At the same time, because of GAC Group, GAC Aian is also a successful representative of the global transformation of traditional automobiles into the new four modernizations. External evaluations say that GAC is the best enterprise among state-owned enterprises in transforming into pure electric new energy. Moreover, especially as the new energy vehicle market becomes a mainstream market, GAC's system advantages, cost advantages, and sustainable operation advantages will become the basis for its next development in the future.
We are the first EV+ICV full-stack self-research enterprise in China. We believe that brand is differentiation, and the biggest differentiation is technological leadership. After several years of development, GAC has formed six original, leading and exclusive global core technologies in EV: exclusive charging platform, all-in-one electric drive, global range of 1,000 kilometers, magazine battery technology to solve safety issues, the world's fastest super fast charging technology and the latest microcrystalline super iron lithium technology. GAC has comprehensively led the development of the industry in terms of batteries. In terms of ICV, we have smart cockpits, autonomous driving, our own operating system and Xingling electronic and electrical architecture, which continue to enter the advanced stage. We will comprehensively promote technological innovation of GAC Aian and realize the second revolution of smart cars. In terms of
manufacturing technology, the GAC Aian factory was completed in 2019 and formed leading manufacturing capabilities. Our AI production capabilities and new digital technology can achieve full-link in-depth customization, which is the first time in the automotive industry. This capability has also been recognized by the Ministry of Industry and Information Technology’s Intelligent Demonstration Project.
We have two major arrangements in the industrial chain:
The first is specific manufacturing. We predict that many parts and components companies will establish factories in 2025, driving an output value of nearly 100 billion. At the same time, GAC will accelerate the localization of chips and plans to create a model with nationally produced chips and in 2024. Second, independent industrialization. At present, GAC has established a battery company, an electric drive company and an energy ecology company, and will enter a new stage of rapid development next year.
Aian was previously the sequence under GAC Trumpchi , and began to operate independently in November 2020. In September this year, we released a new logo. The upward arrow is a combination of the letters A and I, which represents the continued upward efforts and high-end development of Chinese automobiles. In terms of
marketing, we have also carried out a series of innovations and implemented a dual-track reform model of online plus offline, car manufacturers plus supermarkets, and direct sales plus distribution. Currently, GAC's exclusive APP has 1.9 million high-frequency users. All customers use the APP to place orders, purchase, use, maintain and maintain products, completing the full life cycle management of and . At the same time, we achieve fixed prices, low inventory, high turnover, and directly serve every customer.
Starting last year, with the support of the group, GAC Aian achieved mixed ownership reform and went public. In August last year, GAC Group officially issued an announcement and completed a major asset reorganization in November, forming an integrated entity of research, production, supply and marketing. In March this year, we promoted employee stock ownership and introduced three strategic investors, raising a total of financing of 2.566 billion. In the past October, we completed the A-round investment, transformed the company into a joint-stock company, and introduced an independent board of directors and special committees to establish a listed company mechanism. We raised 18.294 billion in Series A, and the current investment advisory valuation has reached 103.3 billion. We are the only unlisted new energy vehicle manufacturer with a valuation of over 100 billion.
Next year, we will promote the IPO work. Since its construction started in 2017, GAC Aian has completed its start-up period and formed relatively good R&D capabilities, product capabilities, supply capabilities, intelligent manufacturing capabilities, marketing capabilities and organizational capabilities. In the next five years, we will still enter a period of rapid expansion.
At present, we have a new brand, released a new LOGO, and launched a new structure. We will quickly deploy new products based on the new structure, and the original products will continue to iterate and improve. Next year and the year after that we will build the third factory and the fourth factory respectively.
We have recently established an international department and hope to enter the international market next year after a year of preparation. By 2025, we hope that product exports can reach the target of 10-15% and form a world-class high-end smart electric vehicle brand. We also have a big goal: to reach a scale of 3 million by 2030 and become the global leader in high-end smart electric vehicles by 2035. Thank you all.
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