After selling one million vehicles per year, where will China's plug-in hybrid market go?

2022 will be the year of explosive growth for plug-in hybrid vehicles in the Chinese market, and it is also the first year for the explosive growth of plug-in hybrid vehicles in the Chinese market.

According to insurance statistics, domestic plug-in hybrid vehicle sales will exceed one million units for the first time in 2022, a year-on-year increase of 136.8%, and the penetration rate will increase from 2.6% in the previous year to 6.2%. Among them, non-restricted cities performed well, with plug-in hybrid sales increasing by 171.1% and market share increasing from 63.7% to 72.9%. Moreover, as Shanghai, China's largest plug-in hybrid market, officially includes plug-in hybrid models in the purchase restrictions starting from 2023, a clear signal has been released: all brands positioned in the mainstream market need and must include plug-in hybrid models. Only when electric hybrid vehicles are regarded as "fuel vehicles in the new era" can the energy-saving transformation of the fuel vehicle market be achieved.

Why should plug-in hybrid vehicles be regarded as "fuel vehicles in the new era"? When more and more mainstream consumers experience the advantages of plug-in hybrid "inductance", it will be difficult for consumers to return to fuel vehicles, whether it is a first purchase or an additional purchase. Compared with pure electric vehicles, which are still subject to many restrictions in car use, plug-in hybrids, which can be used with gasoline or electricity and have worry-free travel, are undoubtedly more universal.

Therefore, one of the themes of China's new energy market in 2023 is that the plug-in hybrid market will move from the 1.0 era, which solved the problem of license plates and purchase restrictions, to the 2.0 era, which improves the car experience of mainstream consumers. In the 2.0 era of plug-in hybrids, Chinese brands have the best opportunity to rewrite the dominance of foreign brands in China’s mainstream market for decades.

Chinese brands' share of the domestic plug-in hybrid market will reach 89% in 2022: BYD's sales will increase by 122% year-on-year in 2022. An important factor is that the use of plug-in hybrids in the mainstream market has shaken the foundation of joint venture family cars; Ideal One of the keys to the rapid growth of two new power brands, AITO and AITO, is that they used extended-range technology to influence the user groups of high-end joint ventures and even luxury brands. On the contrary, at this time, the attitude and investment of foreign brands towards plug-in hybrids are no longer the same as those of Chinese brands.

If the process of plug-in hybrid vehicles replacing fuel vehicles in the mainstream market is one-way and irreversible, then Chinese brands will gradually expand the base of the plug-in hybrid market, which will also fundamentally change the brand structure of the entire passenger car market. . This is indeed the case. Just as feature phones have become increasingly marginalized since the iPhone ushered in the era of smartphones, it is the general trend for plug-in hybrids to replace fuel vehicles.

Therefore, the entire plug-in hybrid market will be an incremental market that continues to expand in scale in 2023. There will be two basic logics here: first, the Chinese brands that currently have the dominant advantage will continue to attack the city and encroach on the share of joint venture brands in the mainstream market; second, the consumer groups and needs will be further diversified. The plug-in hybrid market will be further segmented, and the experience of plug-in hybrid models will be further upgraded. In other words, the plug-in hybrid market will not always be dominated by one company. More brands with technical reserves, characteristics, and the ability to explore potential demand will have more market potential.

Where is the next step for the plug-in hybrid market?

Why would consumers buy a plug-in hybrid car?

Two years ago, the answer to this question would have been a green card that did not require a lottery or auction. In the past, plug-in hybrids were regarded as a transition category from fuel vehicles to electric vehicles. Its advantages were not reflected, and its disadvantages seriously affected the experience. Consumers simply regard plug-in hybrids as a useless product to solve the license plate problem.

2022年插电混动车销量最高的10个城市，依然全部都是限购城市或是限行城市。但是，一方面对牌照有刚需的限购城市，除了上海与深圳外，插电混动销量对其它城市的优势已经不再明显；另一方面，限购城市的插电混动车增速，都已经显著低于整体水平，上海和杭州2022年的插电混动销量同比增幅，已经滑到了不足60%，这其中上海甚至还包含了最后一年政策收紧前的刺激作用。

When the license plate factor has begun to loosen its influence on the decision-making of plug-in hybrid electric vehicles, what will be the factors that attract consumers to actively contact plug-in hybrid electric vehicles? In 2022, the answer becomes "lower cost throughout the entire life cycle" - a comprehensive consideration consisting of the cost of purchasing a car, the cost of using the car, and the cost of selling the car.

The soaring oil prices in 2022 will push the weight of fuel consumption among mainstream consumers to rise rapidly when choosing cars. However, consumers are not willing to sacrifice car prices for fuel economy. Therefore, a number of plug-in cars with the same price as oil and electricity, focusing on electricity, have Hybrid models have quickly attracted the attention of consumers and transformed their advantages in cost and experience into consumption migration. After establishing brand recognition, with the rise of scale, the value retention rate of second-hand cars is also in a good situation.

Therefore, this can explain why the most popular plug-in hybrid system configurations in 2022 are these two: the P1+P3 series-parallel configuration represented by BYD DM-i, and the plug-in hybrid configuration represented by Ideal and AITO. Program configuration.

These two configurations are actually "cousins", and both can achieve urban electricity use, long-distance oil use, and internal combustion engine stable working conditions for series power generation. The difference is that the series-parallel configuration has more direct-drive working conditions for the engine. Whether it is the P1+P3 series-parallel configuration or the extended-range configuration, it can solve the fuel consumption problem of consumers in most urban working conditions. As long as there are fixed charging conditions and a power battery of a certain capacity, daily driving can basically be done. To zero fuel consumption or low fuel consumption when the engine is running stably.

Therefore, after plug-in hybrids become popular in 2022, fuel economy has become an important reputation.

But fuel efficiency should be the most basic feature of plug-in hybrid vehicles. When the participation of electric energy increases, a plug-in hybrid system that cannot reduce fuel consumption will look strange. If plug-in hybrids want to be fuel-efficient in terms of indicators, there are many engineering methods. In other words, in the next stage of plug-in hybridization, fuel economy is just a basic thing of the plug-in hybrid system that cannot be more basic. In the "electricity-based" plug-in hybrid system, consumers should be able to get more fresh experiences in addition to fuel saving - to maintain the performance that users love in the fuel era, but also to accept the users' increased demand for intelligence in the electric era. expectations.

Why is this important to mainstream consumers as well? Because returning to the essence of a car, a plug-in hybrid model that is safe, performs well and is easy to drive is the key to further expanding the use scenarios and forming a comprehensive surpass and complete replacement of fuel vehicles.

For example, current fuel vehicles can ensure consistent performance under any working conditions. Consumers do not need to consider the difference between driving in the city and driving on the highway. However, the biggest shortcoming in performance of the series-parallel configuration and the extended-range configuration is in the mid-to-high speed range. The former is under direct-drive engine conditions. Due to the narrow efficient operating range of the engine and the lack of a speed control device, the ability to speed up again at high speeds and the engine NVH at this time are not optimistic; the latter is under low battery conditions, at high speeds or when climbing. High-power conditions are prone to limited power, weak acceleration and even stalling.

For another example, consumers can regard a fuel vehicle as a "functional vehicle", but for a model that is mainly powered by electricity, consumers will naturally think that it has an advanced, digital and intelligent experience. Otherwise, if we just talk about fuel-saving plug-in hybrids, what is the essential difference between them and those boring Japanese family cars? How can we impress the increasingly diverse new generation of consumers?

Therefore, the next step for the plug-in hybrid market is to find a breakthrough in performance and intelligent development based on the basic operation of fuel saving and targeting a more diverse and younger mainstream consumer group. It solves users’ pain points regarding plug-in hybrid models that are energy-saving but not performance-enhancing, powered but not smart, and that the technology is new but the products are not trendy. This is an inevitable progress trend of plug-in hybrid technology, and it is also a natural manifestation of the personalization of automobile consumption.

What kind of brands have potential in the plug-in hybrid market in 2023?

As mentioned above, when plug-in hybrids fully start the process of replacing fuel vehicles, if we want to be a brand that develops rapidly in the plug-in hybrid market, we believe that three conditions need to be met:

1. Dare to revolutionize the life of its own fuel vehicles and fully invest product development, channels, and marketing resources in plug-in hybrid models that are mainly electric.

2. Have a diversified plug-in hybrid product matrix, and have complete product planning to support the continuous launch of subsequent products.