Source: Times Finance Author: He Qing.

Editor's Note:

In 2024, the competition in China's autos market is fierce. After experiencing a price war across the Industry and extreme internal competition, fuel vehicles, pure electric vehicles, and hybrid (including extended range) vehicles have developed along different paths, with each power mode occupying a certain market share. The transformation of old and new driving forces and the evolution of technology routes have led to a reshuffling of the market landscape: the controversial extended-range route has emerged as the big winner in the 2024 automotive market; companies committed to the pure electric route are working diligently on building charging and swapping Infrastructure, hoping to gain a larger market share; fuel vehicles are arming themselves with more flexible pricing strategies and more intelligent configurations, striving to maintain their former glory. This annual review will analyze the situation of fuel, pure electric, and hybrid vehicles from three dimensions in 2024.

In 2024, the monthly penetration rate of New Energy Fund reaches a new level of 50%, and the annual sales of China's new energy vehicles surpass the milestone of 10 million units for the first time. While new energy vehicles are advancing rapidly, the swift changes in product structure and technology routes also raise new requirements for companies' product structure adjustments, drawing attention to the market shares and future trends of pure electric vehicles, plug-in hybrid vehicles, and extended-range electric vehicles.

"Different users have different needs, but every company must make its own choices regarding technology routes, based on its own fundamental technological considerations," explained Li Bin, Chairman of NIO, regarding the persistence in the pure electric route.

However, the reality is that in 2024, the growth rate of pure electric vehicles has slowed down. According to data from the China Association of Automobile Manufacturers, in 2023, the sales of pure electric vehicles in China reached 6.685 million units, a year-on-year increase of 24.6%. From January to November 2024, pure electric vehicle sales reached 6.738 million units, a year-on-year increase of 15%; during the same period, the cumulative sales of plug-in hybrid vehicles reached 4.519 million units, a year-on-year increase of 85.2%.

Against the backdrop of relatively slow growth in the pure electric market, Xiaomi's first vehicle, betting on the pure electric line, was a hit upon its launch; previously steadfast supporters of pure electric, such as XPeng Motors, have declared their entry into the extended range arena; the representative of extended range vehicle companies, Li Auto, has also entered the pure electric market, but its first product, MEGA, has encountered a lukewarm response; meanwhile, pure electric vehicle brands like Hongqi and ZEEKR have failed to survive through 2024.

Image Source: Times Finance Photography.

Some are happy while others are worried, which may summarize the pure electric market in 2024. Currently, in terms of market share, pure electric still dominates the New Energy market, but its growth rate is lagging behind that of plug-in hybrids. Whether the pure electric market can further increase its growth rate in 2025 depends on longer ranges and more complete charging infrastructure.

Delivering 0.135 million units, Xiaomi's pure electric vehicle has made a 'good start'.

Looking at the pure electric market, it achieved sales of 6.738 million units from January to November 2024, accounting for nearly 60% of the New Energy vehicle market.

Among them, the most popular pure electric model is undoubtedly the Xiaomi SU7.

Against the backdrop of an increasingly saturated pure electric track and intensified competition in the New Energy vehicle market, Xiaomi Autos, which has been preparing for 3 years, finally entered the market in 2024. On March 28, 2024, Xiaomi's first pure electric sedan, the Xiaomi SU7, was launched. It set records with over 10,000 orders in four minutes, over 0.02 million units in seven minutes, and a total of 88,898 units within 24 hours of its debut. In November 2024, the Xiaomi SU7 completed its annual sales target of 0.1 million units ahead of schedule, and the total delivery for the first year reached 0.135 million units.

After the success of the Xiaomi SU7, the second pure electric model, the first SUV Xiaomi YU7, is expected to be launched in June or July 2025. Meanwhile, by the end of 2024, Xiaomi Autos officially announced a collaboration with NIO, XPeng, and Li Auto to develop a charging and energy network, with over 14,000 NIO Charging Stations, over 9,000 XPeng Charging Stations, and over 6,000 Li Auto Charging Stations integrated into the Xiaomi charging map.

As a new player in the pure electric field, Xiaomi Autos has indeed achieved a good start. Besides Xiaomi Autos, Tesla China and BYD have performed impressively.

According to data from the Passenger Car Association, Tesla's domestic sales in December reached 0.083 million units, up 12.8% month-on-month, with total sales exceeding 0.657 million units for the year, a year-on-year increase of 8.8%, all setting historical records.

In 2024, Tesla delivered approximately 1.789 million electric vehicles globally, maintaining the top position in global pure electric sales.

BYD sold about 1.765 million pure electric vehicles in 2024. In the pure electric sector, the sales gap between BYD and Tesla narrowed to within 0.03 million units.

Additionally, NIO, which insists on a pure electric route, achieved sales of 0.222 million units in 2024, a year-on-year increase of 38.7%.

However, some new car-making forces focusing on pure electric vehicles have 'fallen' in 2024, such as ZEEKR and High合.

As a brand of new electric forces, both emphasize innovative concepts. ZEEKR's core selling point is 'Auto Robot', and features such as its half-width steering wheel, screen shifting, button turn signals, and uniquely shaped long screens have sparked much discussion.

High合 also has many 'novel' selling points, such as gullwing doors, programmable intelligent headlights, and cross-border artistic design. 'Creating market-leading vehicles and pioneering products' is the founding intention of High合.

Wu Sheng, founder of the Scene Laboratory and proponent of scene methodology, believes that from a user perspective, some Geek users have a demand for cutting-edge digital products and travel tools, and they may be more inclined to choose pure electric models, as they possess a unique temperament in terms of design originality.

However, terms like 'avant-garde' and 'disruptive' have not made Aiways and ZEEKR the darlings of the market.

Aiways targets the higher-end pure electric market of 0.6 million to -0.8 million yuan. The initial two models, Aiways HiPhi X and Aiways HiPhi Z, are both priced within this range.

However, the controversial design of Aiways and the breakthrough pricing have garnered criticism. 'When people hear Aiways, they may think of prices like 0.68 million yuan or 0.8 million yuan, which seem expensive, making it sound as though only 'fools with money' would buy this car,' said Yang Yueqing, engineering project director at Aiways.

According to official data from Aiways, from August to October 2023, Aiways HiPhi Y delivered 1,021, 1,556, and 1,606 units respectively. After that, Aiways did not disclose sales figures. In February 2024, Aiways announced a stop in production and then entered a phase of pre-restructuring.

As a new force in car manufacturing, ZEEKR has always focused on high-end and intelligent labels. ZEEKR CEO Xia Yiping has stated that from its inception, ZEEKR has been committed to building world-class smart vehicles.

However, from a market performance perspective, the products launched by ZEEKR have made little splash. According to Dongchedi data, ZEEKR's sales in the past year were only 0.014 million units. The ZEEKR 07, which launched in September, had cumulative sales of 3,893 units. Another model, ZEEKR 01, has monthly sales hovering around 1,000 units.

Is pure electric still the ultimate solution?

In the pure electric vehicle sector, some companies are pleased while others are distressed. Given the backdrop of slowing growth in pure electric vehicles, multiple companies have started entering the hybrid market.

Data shows that in 2023, the sales volume of pure electric vehicles in China reached 6.685 million units, an increase of 24.6% year-on-year. From January to November 2024, the sales volume of pure electric vehicles was 6.738 million units, a year-on-year increase of 15%; during the same period, the year-on-year growth rate of plug-in hybrid vehicles was 85.2%.

Xiaopeng Motors, ZEEKR, GAC Aion, and others have announced their plans to launch extended-range models. In addition, there have been reports that Xiaomi Motors will also enter the extended-range market. According to 21st Century Business Herald, Xiaomi's third vehicle will be an extended-range SUV.

"If it's a new automaker starting from scratch, they usually follow the new forces' approach, first launching pure electric models, and then increasing the product variety through the strategy of transforming electric to fuel," said Zhang Xiaoliang, founder of SoCar's product strategy consulting.

While peers are laying out their extended-range paths, the representative company of the domestic extended-range route, Ideal Auto, is heading towards the pure electric route.

When asked how to view the increasing number of extended-range players entering the market, Li Xiang, chairman of Ideal Auto, stated in the Q3 2024 earnings call: "I believe that competition in the automotive industry is a competition of comprehensive operational capabilities, including technology, products, supply chains, sales, and services. In fact, the extended range is just one important aspect of technology, but it is definitely not everything."

In 2024, Ideal Auto launched its first pure electric model, MEGA, with a goal of achieving sales of over 0.5 million yuan, making it the top product.

However, the pure electric MPV priced at 0.5598 million yuan has not performed as expected due to various internal and external factors. Ideal Auto believes that the lackluster market response for Ideal MEGA's launch was influenced by multiple factors such as the public opinion environment, organizational phase errors, and incorrect market judgment.

However, the poor performance of the first launched pure electric model did not dampen Ideal Auto's enthusiasm for pure electric layout. In the Q3 earnings call, Li Xiang stated, "(The management) is very confident about the subsequent pure electric models. Just as our extended-range L series performed well in the high-end new energy market, we will strive to make our pure electric SUV part of the leading tier in the high-end pure electric market." Li Xiang said.

A diversified technology route has become the choice of several car companies, including Li Auto and Xiaopeng Motors.

Currently, the mainstream car companies insisting on a single pure electric route are only Tesla and NIO. In Li Bin's view, as long as the construction of basic infrastructure such as charging and battery swapping is done well, there will be a market for pure electric vehicles. "I believe pure electric is definitely the ultimate solution."

"There are fuel cars that sell well, plug-in hybrids that sell well, hybrids that sell well, and pure electric vehicles that also sell well; conversely, there are also those that sell poorly. The car company with the highest market cap is still focused on pure electric vehicles," Li Bin once said.

Currently, NIO has laid out three brands, including NIO, Landao, and Firefly, all of which follow a pure electric route. The all-in focus on the pure electric route echoes NIO's layout in the energy system, which can be charged, swapped, and upgraded. As of December 29, 2024, NIO has established 2,905 battery swapping stations nationwide, including 930 high-speed swapping stations, 4,220 charging stations, and 24,795 charging piles, with 1.17 million third-party piles.

Speaking of investment in pure electrification, Li Bin regretted not decisively building battery swapping stations earlier, saying, "We should have started building 2,000 stations a year from 2021."

In recent years, the division of technology routes has increased the "ammunition" for differentiated competition among car companies, and the game between the pure electric faction and the hybrid faction will continue in 2025.

Li Bin once lamented: "It is indeed very easy to end up fighting alone now because others have range extension or plug-in hybrids. But they will attack pure electric less after they also have pure electric vehicles, which will be better."

According to predictions by S&P Global mobile experts, next year electric vehicle sales are expected to account for nearly 30% of China's automotive market, a year-on-year increase of 20%. In this regard, analysts claim that "the growth of electric vehicle sales in China is unstoppable," but domestic brands may face challenges of oversupply of electric models and fierce price competition.