Author | Zhou Zhiyu

Editor | Zhang Xiaoling

The Chinese New energy Fund market in 2024 is undergoing dramatic changes. The once successful dark horse has fallen in succession, while the "Five Little Dragons" have emerged from the elimination round and made it to the final circle.

Since the beginning of this year, the sales of Huawei's AITO and Li Auto have regained momentum after experiencing a short-term fluctuation, gradually stabilizing in the mid-to-high-end market; Leap Motor and ZEEKR have been aggressively pushing forward in the second half of the year, with sales continuing to rise; although Xiaomi Autos entered the market a bit late, they delivered over 0.13 million vehicles in just eight months, creating a miracle among new energy car manufacturers.

Behind the "Five Little Dragons," Xiaopeng, which frequently produces hit models in the second half of the year, along with several other car manufacturers, are also accelerating their pursuit. There is no doubt that China's New energy Fund elimination competition has entered the final circle, and the opportunities for later players are becoming scarce.

In the upcoming market, as players within the field engage in fierce competition in the segmented market, competition will only become increasingly harsh. After the sand is washed away, the future landscape of industrial giants is gradually taking shape.

Sprint.

For China's New Energy Automobiles, 2024 is of great significance, as it is the year when Chinese independent brands truly take center stage.

According to data from the Passenger Car Association, in July this year, the market share of New Energy Automobiles exceeded 50% for the first time, becoming the mainstream in the market, replacing traditional RBOB Gasoline vehicles. Moreover, this momentum has continued over the past four months, with monthly sales of New Energy Automobiles stabilizing above one million units.

At the beginning of 2024, this was something no one in the industry dared to imagine. At that time, the most optimistic predictions only anticipated that the market share of New Energy Automobiles' monthly sales would approach 50% by the end of 2024. With the increase in penetration of New Energy, Chinese independent brands have also achieved leapfrog development with a market share exceeding 60%.

Among them, BYD is far ahead, while the 'Five Little Dragons' maintain a strong growth trend and are surging forward.

As of the end of November, Leap Motor has completed its annual sales target for 2024 ahead of schedule with cumulative sales of 0.2512 million units, and its monthly sales have exceeded 0.04 million units; Ideal's cumulative delivery in the first eleven months reached 0.442 million units, just one step away from the annual sales target of 0.5 million units; ZEEKR has also performed well, with cumulative sales exceeding 0.1949 million units; after merging with Lynk & Co, the ZEEKR Technology Group's annual sales may exceed 0.5 million units; Huawei's Asking for the Future has cumulative sales exceeding 0.35 million units, especially since the launch of the Asking for the Future M9, which has exceeded 0.2 million orders, creating a miracle for Chinese brands in the luxury car market.

Xiaomi Auto is an exception. Since the first batch of deliveries began on April 3 of this year, relying on the Xiaomi SU 7, Xiaomi Auto has accumulated deliveries of over 0.13 million units in 8 months, setting a new record for new brand deliveries.

The key to allowing the 'Five Little Dragons' to emerge is their ability to offer products with a better 'cost-performance ratio'. This is achieved by providing the most recognizable products in their segment and optimizing costs through strengthened supply chain advantages.

Ideal focuses on family scenarios, while Asking for the Future upholds the banner of intelligence, which is a 'dimensional strike' against traditional luxury cars like BBA. At the same time, they rely on increased interchangeability of components to optimize production efficiency.

In the past two years, Li Auto has focused on learning from Huawei to integrate supply chain management and rebuild the supply chain system. This has allowed it to be the first among the new car-making forces.

The same goes for Leap Motor and ZEEKR. One of Leap Motor's main strategies this year is to benchmark its products against Li Auto, and then achieve commonality in components through core technology development and full component integration, reducing production costs. As Leap Motor's Chairman Zhu Jiangming puts it, the goal is to create products that are 'good and affordable.'

Leap Motor has also further enhanced its product iteration through platform capabilities. For example, the Leap Motor C16 was initially estimated to be launched in 2026, but through platform capabilities and component commonality, it has been advanced by more than a year from the original plan.

ZEEKR, as the integrator of Geely's new energy technology, has always represented domestic performance electric vehicles. It is also looking for further opportunities to enhance scale effects. In mid-November, ZEEKR merged with Lynk & Co., hoping to strengthen synergy through the integration of middle and back-end processes including smart technology, after-sales system construction, and channel development.

Xiaomi Autos relies on the technological ecosystem accumulated by Xiaomi in the Consumer Electronics field to bring more possibilities for vehicle intelligence. Moreover, its supply chain efficiency is higher than that of other new forces during their initial entry, leading to a reduction in costs. At the same time, adhering to a user-oriented mindset, coupled with Xiaomi Group Chairman Lei Jun's unreplicable marketing efforts, Xiaomi Autos has brought an unprecedented 'emotional value' to the auto industry.

Overall, the continuous improvement of technological advantages, cost control capabilities, and product strength upgrades has allowed the 'Five Little Dragons' to stand out in the fiercely competitive 2024.

Moreover, their scale advantages are expected to continue next year. According to the 2025 sales plan currently provided by the 'Five Little Dragons', apart from Xiaomi Autos which is still ramping up production capacity, the other four automakers are projected to deliver at least 0.5 million units, with expectations going up to 0.7 million units or even higher. This also means they will have a higher market position in China's new energy vehicle market.

Race.

In the blink of an eye, it has been ten years since 2014, known as the "Year of New Energy Vehicles in China".

After experiencing the initial capital bubble and the peak with hundreds of New energy brands, China's New energy vehicles are continuously being cleared. The elimination rounds have also entered a more brutal final stage.

Li Bin, Chairman of NIO, emphasized that the Chinese automobile industry has now entered "the most intense and brutal stage, with competition on a higher dimension." If an auto company does not reach a certain size and operational quality in the next two to three years, it will be basically difficult to participate in subsequent competition.

Industry leaders, including Yu Chengdong, Chairman of Huawei's car BU, have repeatedly emphasized that automobile companies can only survive by becoming giants. Lei Jun also has a clear goal, that is, Xiaomi must strive to become one of the top five car manufacturers in the world.

The reality is that even the outstanding "Five Little Dragons" of car manufacturing in 2024 need to accelerate to strive to break through the million sales threshold and move towards the dream of becoming a global automotive giant.

The market elimination rounds will intensify. As of now, there are only 14 brands of New energy vehicles with an average monthly sales exceeding 0.01 million units, one of which is Tesla.

With the intensification of market competition, whether annual sales can exceed 0.5 million units and achieve profitability under accounting standards will be an important evaluation indicator. Players who fail to achieve these goals in the next two to three years will be on the edge of danger.

Gong Min, head of UBS Group's China automotive industry research, also told Wall Street News that during the process of electric vehicle penetration and the increase in market share of homegrown brands, the integration of China's automotive industry has actually begun. For new forces, market share will increase, but they also need to balance the relationship between losses and growth.

Moreover, with car manufacturers, including the 'Five Little Dragons', gradually growing into giants with an important position in the Industry Chain, they also need to find the direction for future development on behalf of China's autos.

The supply chain will still be the focus of their efforts. An analyst in the automobile industry pointed out that with the advancement of China's New energy Fund technology, including Battery, Lidar, etc., new suppliers are continuously emerging in the industry. Whether car manufacturers and suppliers can form a 'community of shared destiny' under the new industry pattern, driving the transformation and upgrading of the Industry Chain rather than a simple cost comparison, will be the key to the Chinese automotive industry's journey to a broader stage.

At the same time, as market competition enters the second half of intelligence, Chinese car manufacturers have begun exploration in the field of intelligence, entering uncharted territory. This year, the focus of market competition is on the comprehensive rollout of No-Map Autonomous Navigation (NOA) in urban areas, with 'end-to-end' large models becoming the key battleground for car manufacturers' technical finals.

ZEEKR CEO An Conghui revealed that ZEEKR plans to achieve mass production of models with L3+ capability by 2025. Li Xiang, the Chairman of Ideal, boldly stated that AI means everything to Ideal, and smart automobiles are just one of the carriers for realizing his AI vision.

Recently, Lei Jun recruited the '95 after genius girl', Luo Fuli, one of the key developers of DeepSeek-V2, with a salary of millions, and further increased capital expenditure on computing power resources, indicating that he is fully embracing AI large models with practical actions.

It can be seen that AI large models are disrupting the automotive industry and also allowing this century-old manufacturing industry to have more possibilities, transforming into an AI technology giant. In this process, Chinese automobile manufacturers will play an important leading role.

However, for any industry to truly become globally leading, it cannot only look at scale and market share; it also requires leading enterprises to play the role of a locomotive. This requires companies like BYD, the 'Five Little Dragons', etc., to work together on the road to becoming giants, taking on the responsibilities necessary for China's automobiles to move towards a broader horizon.