Car manufacturing, the battle between the "four major factions"

Author | Tian Zhe

Editor | Zhang Dong

The smart car industry is like the martial arts world, with different factions gradually forming among the comings and goings of people.

In the current competition in the smart car market, players can be roughly divided into four factions: new forces, traditional car companies, the Internet and smart phone companies .

The new forces are represented by Tesla, Xiaopeng, Weilai, Ideal , etc. They lead the industry change, are good at essential innovation, and are also the most optimistic faction in the secondary market ;

The traditional car companies are represented by Toyota, Volkswagen, GM , etc. They have a solid manufacturing foundation , a well-known brand, and are quite competitive.

The Internet group is represented by Baidu, Didi, Alibaba, etc. They attack from multiple fronts with massive traffic to tap into niche markets .

The smartphone group is represented by Apple, Xiaomi, Sony , etc. They have less accumulation but more resources and are good at technology migration ;

Someone mentioned that the four major factions each have their own advantages and disadvantages, and that there are currently five necessary processes in car manufacturing: starting with financing, growing in manufacturing, flourishing in integration, being loyal to the brand, and succeeding in AIoT, among which manufacturing is the lifeline .

The four major factions all have the same goal of making good cars, but the strengths and weaknesses of each faction are different, which has led to their own unique car-making routes.

Internet companies have many businesses and their respective technological accumulations are also different.

Looking at domestic and foreign Internet companies such as Baidu, Alibaba, Didi, Google, etc., their common point seems to be that they have accurately entered the smart car industry through software algorithms accumulated over many years.

Based on the technical route, the Internet faction can be divided into the autonomous driving technology category represented by Baidu, Didi, and Google, and the software platform category represented by Alibaba .

Let’s look at the autonomous driving category first.

After tens of billions of dollars of investment and years of research and development, advanced driverless technology has become a natural barrier between the Internet faction and other factions.

According to the 2020 full-year autonomous driving data released by the California Department of Transportation (DMV), the autonomous driving technologies of Google, Baidu, and Didi ranked among the top ten in the world.

Among them, out of the 63 California autonomous driving license holders, only 29 insisted on autonomous driving road testing and reported data. Seven companies including Samsung, Bosch, Faraday Future, and TuSimple have stopped signing California autonomous driving licenses.

Although the Internet generation holds the autonomous driving technology that represents the future trend, it still needs to pass many tests in the process of implementation. Issues such as technical safety, manufacturer cooperation, laws and regulations, and public recognition are the huge mountains that stand in the way of its large-scale commercial application.

In 2015, Uber CEO Travis Kalanick tweeted that Uber would replace private cars and human drivers with driverless cars. Later, the media revealed that it was setting up a robotics laboratory with Cameron University as the main research and development team to develop autonomous driving technology.

Since then, Uber has cooperated with Volvo and Daimler to launch fully autonomous vehicles and autonomous driving fleets.

In 2017, although Uber's self-driving car had caused widespread discussion for running a red light, many American media and research institutions including The Information and Navigant Research believed that Uber's self-driving technology was superior to that of Baidu and Didi.

However, this company, which carries everyone's hopes, has caused an increase in concerns about self-driving cars among the American people due to a death caused by its self-driving car.

The American Automobile Association conducted a survey of the public after the Uber self-driving car accident, and the results showed that nearly three-quarters of Americans said they were afraid to ride in self-driving cars, and more than half of the people said that self-driving cars driving on public roads would threaten their safety.

It is reported that Uber invests $20 million per month in the research and development of autonomous driving technology. As of 2019, Uber has invested $1 billion in the research and development of autonomous driving technology.

However, after continued capital investment failed to produce results and the U.S. government's attitude toward it changed dramatically, Uber was unable to continue supporting it and sold its autonomous driving business in December 2020. Uber's dream of building cars and autonomous driving came to an end.

Let’s look at the software platform category.

The lack of layout in autonomous driving technology does not affect the Internet faction represented by Alibaba from implanting technology into smart cars in another way.

The smart car brand "IM Motors" jointly launched by Alibaba, Zhangjiang Hi-Tech Park, and SAIC Motor is equipped with the in-vehicle operating system "Ali OS" developed by Alibaba for many years.

In addition, Alibaba has also made arrangements in vehicle-road collaboration, high-precision maps, remote driving, and autonomous driving cloud platforms.

However, Internet companies only provide software algorithms in smart cars and may face more intense competition in the future.

In the smart car-related industrial chain such as vehicle-road collaboration, autonomous driving, automotive chips, and high-precision maps, there are a large number of competitors lurking and waiting for an opportunity, hoping to grab more fat from the Internet faction.

The Internet-based car-making industry will inevitably face a hard struggle.

With ecology as their spear, smartphone manufacturers such as Apple, Xiaomi, Sony and others may be able to more easily penetrate the enemy's shield in the battle of smart cars.

Traditional car companies have gained hundreds of millions of users around the world in their 100 years of development. In 2020, Toyota Motor, a traditional car company, won the global car sales championship with 9.528 million vehicles, showing the world its huge user base.

The new forces in car manufacturing are also constantly breaking new sales records, showing the outside world that their potential should not be underestimated.

Even if relying solely on technology, the Internet faction has recently launched smart car brands one after another, taking the first step in car manufacturing.

The mass-produced models have been released and the delivery of complete vehicle orders has been completed. This is the common point of the above three, and it is also the solid shield that they are constantly forging and strengthening.

Each major faction uses the new driving experience to seize the minds of users and take the lead in the blue ocean market, which is obviously disadvantageous for smartphone manufacturers that have just entered the market.

If the smartphone industry enters the market from the perspective of the smart car ecosystem, it may be able to overtake others.

Among them, by using the two trump cards of operating system and AIoT smart hardware, the smartphone faction may cut a huge hole in the smart car market.

The operating system is undoubtedly the one that touches users most frequently and is also an important factor that affects the driving experience.

After years of polishing the operating system, the smartphone industry is already familiar with the preferences of mobile phone users and may be able to attract users to its arms from the most basic technology.

Just as the most powerful moat of Apple mobile phones is the iOS operating system, the unique smartphone user experience has won it countless believers around the world, and different smartphone brand operating systems have their own firm fan base.

The operating system of smartphones can be adapted to smart cars in the same vein, and the two can be seamlessly connected to achieve cross-product operations.

Apple, Xiaomi and other smartphone companies that have announced their car manufacturing plans have all revealed that the smart car ecosystem will be integrated with the existing ecosystem.

In fact, the smartphone industry has long paid attention to the development of the smart car ecosystem.

In 2013, Apple announced the "iOS in the Car" plan and officially entered the in-car operating system market. Since then, Apple has confirmed that the name of its in-car operating system is "Car Play".

After several years of optimization and vehicle installation, Car Play has been installed in more than 600 models of automobile manufacturers such as Mercedes-Benz, Ferrari, BMW, Ford, General Motors, and Honda. Apple's in-vehicle operating system has gradually matured with continuous iterations.

Although there is no plan to build cars at present, Huawei has also launched the Hi Car car system, as well as the three major Hongmeng car operating systems, including the Hongmeng cockpit operating system HOS, the intelligent driving operating system AOS and the intelligent vehicle control operating system VOS, which respectively involve the cockpit .

Xiaomi is also cooperating with car companies in areas such as smart voice and AI smart assistants.

On the other hand, the smartphone industry has been actively developing AIoT for many years and has begun to take shape. With the help of operating systems, the smartphone industry is closer to building smart cars into the third space and smart mobile terminals outside of homes and offices.

AIoT from Xiaomi, Apple, and Huawei has entered thousands of households, among which Xiaomi's AIoT is more prominent.

Lei Jun and the Xiaomi team revealed in an analyst meeting that Xiaomi cars will be connected to AIoT in the future. Prior to this, Xiaomi had already demonstrated the results of its integration of AIoT and smart cars.

Xiaomi mobile phone NFC function, Xiao Ai and other products have been installed in some car models, and Xiaomi's ecological chain has released smart car hardware such as smart rearview mirrors and cigarette lighter fast charging.

Everbright Securities believes that Xiaomi's entry into the smart car market can perfectly complement Xiaomi's AIoT ecosystem. At the same time, its market growth space is huge and will become the second growth curve driving Xiaomi , amplifying its brand + channel + AIoT ecological value.

According to Xiaomi's Q3 2020 financial report, the number of devices connected to Xiaomi's AIoT platform exceeded 289 million. Huawei's total shipments of IoT-connected devices also exceeded 150 million at the end of 2019.

According to iResearch Consulting's "China Intelligent Internet of Things (AIoT) White Paper 2020", through AloT star products + proprietary operating systems, the success of Internet era giants may be reproduced.

The smartphone industry has made varying degrees of investment in operating systems and AIoT and has achieved good results. By connecting the two with smart cars, the smartphone industry may further win market share in smart cars and achieve a latecomer advantage.

The new forces in the automotive industry have opened the door to the smart car industry through various innovations, attracting the capital market's enthusiasm. Tesla's market value was once equal to the combined market value of the nine major traditional automakers.

However, compared with traditional car companies with decades or even hundreds of years of history, the new forces may only be temporarily ahead.

Its complete vehicle manufacturing capabilities, brand effect, and huge user base are all its unique advantages.

The strong vehicle manufacturing capabilities of traditional car companies cannot be easily surpassed by latecomers. This may be the most core advantage of traditional car companies.

In the early stages of their development, new car manufacturers such as Tesla, NIO, and Xpeng have all engaged in various forms of vehicle manufacturing cooperation with traditional car companies. Some companies still rely on the latter's manufacturing capabilities to produce new models.

Compared with the first smart cars released by new car manufacturers, the actions of traditional car companies are not far behind.

The first smart cars of new forces such as Weilai, Xiaopeng, Ideal, and WM Motor were announced after 2017. The following year, traditional car companies such as Jaguar, Mercedes-Benz, Audi, Volkswagen, and GM followed suit and launched their first smart cars. Geely, GAC, and BYD also launched their second smart models in 2019.

In addition, automakers such as Volkswagen, Hyundai, and Geely have successively released smart car manufacturing platforms, which can reduce the cost of manufacturing smart cars while improving the development efficiency of new models.

Compared with new car manufacturers who release an average of one model per year, traditional car companies can launch multiple models at the same press conference and deliver them to users quickly.

BMW Group CEO Zipse once said: "Tesla's dominance in smart car sales in recent years may soon come to an end as traditional automakers launch a series of new pure smart models."

In terms of brand effect, it can be seen from the supply preferences of parts suppliers.

NVIDIA, Mobileye, Luminar and others prefer to install their latest products in new models of traditional car companies. For example, SAIC R Auto, SAIC MARVEL R and Zhiji Auto respectively own the latest products of the above manufacturers, while among the new car-making forces, only NIO ET7 is equipped with the world's first NIVIDIA DRIVE Orin chip.

At the R Auto launch conference, there were even video appearances from Nvidia CEO Jensen Huang, Luminar founder Austin Russell, and ZF Group board member Dr. Holger Klein, which is rare in previous car launches.

Traditional car companies have been deeply involved in the global market for many years, and their solid user base is not easy to pry open.

Currently, the global penetration rate of smart cars is less than 5%. Citigroup optimistically predicts that the global penetration rate of smart cars will reach 15% by 2025. This means that even if the smart car market grows rapidly, traditional car companies will still occupy a huge market share.

It is worth noting that in the "2021 China Automobile and Future Mobility Summit and 2020-2021 Sohu Automobile Annual Election" jointly organized by Sohu Technology and Sohu Auto, Mercedes-Benz, NIO, Lynk & Co, BYD, Changan, GAC Aion, Changan, GAC Honda, Changan Mazda, FAW-Volkswagen Brand, and FAW Toyota ranked in the top ten of "Annual User Operation Brands".

Traditional car companies are consolidating their industry position in the new era by learning from the success of new car-making forces.

As traditional car companies are catching up by deploying smart cars and using their unshakable manufacturing capabilities, brand effects, user base and other advantages to turn defense into offense , new forces may be challenged at all levels.

The emergence of smart cars is essentially a subversion and innovation of fuel-powered cars. Standing at the forefront of innovation in this industry are new car-making forces such as Tesla, NIO, Xpeng, and Ideal.

The innovation of new car-making forces is highlighted in many aspects such as technological integration and supporting services.

When it comes to technological innovation, Tesla cannot be ignored.

From automotive technology to autonomous driving, Tesla has opened up an evolutionary track for fuel-powered vehicles in the tightly-walled automotive industry with its new smart car format.

In terms of automotive technology, Tesla abandoned the traditional splicing mode and adopted the "one-piece die-casting" process, which can integrate the 70 parts of Model Y into a single casting.

This not only reduces costs, but also reduces the noise generated by the car while driving and improves collision safety performance.

In terms of technological application, Tesla was the first to introduce artificial intelligence technology into automobiles, providing an application template for the implementation of assisted driving and smart cockpits.

In addition, the OTA remote upgrade service provided by Tesla reconstructs the relationship between the car brand and users.

Tesla has extended the short-term buying and selling relationship between users and car brands to a two-way and lasting communication covering the entire life cycle of the car. Car brands no longer pursue a single sales indicator, but instead attach equal importance to sales and service, which makes the relationship between users and car brands more sticky.

When it comes to supporting service innovation, NIO is unique.

Smart cars have a short range, and long charging times are a major factor that prevents users from purchasing them. In response to users' "power consumption anxiety", smart car brands represented by NIO provide battery replacement services while building charging piles. It only takes 3 minutes to replace the battery and the car can be fully charged.

At present, automobile brands including SAIC R, BYD, BAIC, Geely and others have also launched battery swap services in recent new car launches.

In addition, NIO has built the deepest brand moat through user operations, and has attracted companies including Xiaomi to learn from it.

NIO has a unique user operation strategy: the ripple model.

The sales model of traditional car companies is like a funnel, which ultimately generates transactions through layers of screening. In Weilai's view, its user base is like ripples, which spread to car owners, admirers, followers and other users through the influence of the core car owners at the center, and then prompt the outer users to make purchases. Once the purchase is completed, it will return to enter a new ripple and continue the cycle.

The core of the ripple model lies in user operation.

NIO builds an online community through the NIO App to connect users with the brand, thereby making users highly recognize the brand and generating lasting stickiness.

In addition, NIO has also created a user-centric evening party "NIO Day" and a lifestyle brand "NIO Life" to meet users' various needs from spiritual to material.

Since then, products that focus on user experience, such as car brand community apps, experience centers, and car co-creation, have emerged. Loyal characteristics that originally represented fan groups, such as "Di fans" and "Peng friends", have also appeared in the car user group, and the relationship between car brands and users has undergone a qualitative change.

Through bold innovation, the new forces in car manufacturing each have a group of loyal fans, who are also the force that supports the brand to move forward.

Looking beyond China and around the world, as smart cars are evolving at an accelerated pace, few companies in other industries in Europe, the United States, Japan and other regions are interested in building cars.

In the view of New Intelligent Driving, there are two main points: industry and policy differences .

The disappearance of drivers, privatization, and internal combustion engines means that related industries will decline, especially the internal combustion engine and other technologies that traditional car companies regard as confidential. The technology and industrial chain that they were once proud of will become a quagmire that constrains their intelligent transformation, resulting in hundreds of thousands of unemployment, cost losses, and adjustments to business models.

In terms of policy promotion, China has continuously introduced a number of policies since 2009 to guide the transformation of the traditional automobile industry, and gradually reduced the qualifications for smart car manufacturing, providing access opportunities for multiple industries to manufacture smart cars. In the formulation of policies related to smart cars, Europe, the United States and Japan are slightly behind.

The increase in cross-border players in the smart car industry can further reduce the industry's manufacturing costs and raise the industry's ceiling to a certain extent.

Li Bin, founder of NIO, said at a media sharing session: "We have always regarded our competitors as 'competitive teammates'."

Gu Huinan, director and general manager of GAC New Energy, also believes that "now we need everyone to work together to make the new energy vehicle pie bigger, and it is not yet time to divide the pie. GAC New Energy is not afraid of competition, and we welcome more friends to join the Chinese new energy vehicle camp."

Currently, China's smart car market ranks first in the world and is more mature than other regions.

Perhaps the four major factions competing fiercely in China's smart car market will reappear in another country in the future.

8.26-28 Official opening

GAIR Global Artificial Intelligence and Robotics Conference, as the highest-level AI industry summit in the Guangdong-Hong Kong-Macao Greater Bay Area, together with the "North China representative" Zhiyuan Conference and the "East China representative" WAIC, constitute China's three top conference matrices with the most international vision and industrial depth.

GAIR was founded in 2016. Over the years, many Nobel Prize and Turing Award winners, 35 Chinese and foreign academicians, 25 chairmen of international AI conferences, 120+ Fellows, 150+ well-known investors, and 500+ well-known business leaders have attended and spoken at the conferences. It has also attracted tens of thousands of experts from home and abroad to attend the conferences and 1,000+ media to follow up on the conferences.

From August 26 to 28, 2021, the 6th GAIR will be officially held in Hengqin, Zhuhai.

During this conference, Leifeng.com will focus on the hottest track and hold a special session on "Intelligent Driving" on August 27.

At that time, new and old players in the car industry, BATH giants, smart driving unicorns, and industry chain giants will gather together for cross-border collisions. In the ever-changing era of automotive intelligence, we will keep our feet on the ground and gain insight into the breakthrough of large-scale mass production; at the same time, we will look up to the stars and draw a picture of the future of travel transformation.

This article is originally written by Leifeng.com, author: Tian Zhe. Please reply "reprint" to apply for authorization. Reprinting without authorization is prohibited.