Internet-based cars are beginning to ebb in popularity

When the tide goes out, you can tell who is swimming naked at a glance.

Internet companies’ dream of building cars is finally waking up.

Perhaps because of acclimatization, or because they were "playing tricks" from the beginning, when the major car companies came to the end to engage in hand-to-hand combat, the latecomers who wore the halo of Internet car manufacturing finally chose to stop their losses in time.

Among them, in addition to decisiveness, there are more regrets that are difficult to let go.

Looking at today's automobile market, even if the Chengdu Auto Show is in full swing, it cannot change the pessimism of most people. So much so that even the rare big A market with 100 shares hitting the daily limit does not have the "shadow" of the major car companies.

Could it be that the automobile industry is really in recession? A few days ago, Cui Dongshu, secretary-general of the Passenger Transport Association, wrote:

The revenue of the automobile industry from January to July 2023 was 5,314.8 billion yuan, a year-on-year increase of 12%; the cost was 4,637.8 billion yuan, an increase of 12%; the profit was 258.3 billion yuan, a year-on-year increase of 1%; the automobile industry profit margin was 4.9%, compared with the entire industrial enterprise The average profit margin of 5.4% is still low for the automobile industry. Automobile production in July was 821.7 billion yuan, an increase of 5%; costs were 714.9 billion yuan, an increase of 6%; profits were 40.7 billion yuan, a year-on-year decrease of 30%; the automobile industry profit margin was 5.0%.

In other words, in the context of a car price war, major car companies have to sacrifice part of their profits and choose to "burn money" to reduce prices in order to maintain their hard-won market share. This kind of behavior of "losing money and making money" is obviously unbearable for Internet companies that want to make "quick money".

To cut through the mess quickly, many Internet companies began to try to stay away from the "mud" of the automobile industry step by step. But questions also come one after another. After such actions, what are they left behind, or is it the so-called Internet thinking?

The “fun” pursued by capital

On the morning of August 28, Didi Chuxing and Xpeng Motors jointly announced that the two parties had reached a strategic cooperation.

The relevant cooperation content is that Didi will sell assets and research and development capabilities related to the smart electric vehicle project to Xiaopeng. Based on this, Xpeng Motors will build an A-class smart electric vehicle, project code-named "MONA", as the first product of its new brand. It is expected to be mass-produced and launched on the market by Xpeng Motors in 2024.

For Xiaopeng, this is undoubtedly a great benefit. But for Didi, the most direct explanation may be, "It can't build cars anymore."

In a daze, the ups and downs of Didi in 2021 are still replaying in my mind. But everyone knows that after today, this travel giant’s dream of building a car will no longer exist. To take a step back, apart from limiting factors such as production qualifications, Didi has finally taken a breath at this time, and the uncertainty of continuing to build cars is too great.

According to Didi's 2023 Q1 financial report released in July, Didi's revenue reached 42.712 billion yuan in the first quarter of 2023, an increase of 19.1% from 35.848 billion yuan in the same period last year.

Although the growth is good, what is difficult to change is that Didi’s first-quarter costs were 36.5 billion yuan, an increase of 21.5% from 30 billion yuan in the same period last year; the net loss of 918 million yuan also means that Didi is in the “blood recovery” stage .

In such a business environment, it is understandable that Didi chose to protect itself wisely. What's more, today's automobile market is in chaos. It is not difficult to predict that when the second round of price war in the automobile market begins, the real "money-burning" war has just begun.

Capital is not stupid and will not plunge into the fire pit. Taking history as a guide, the current rise and fall of Internet-based car manufacturing is exactly the same as the rise and fall of autonomous driving in the past.

Once upon a time, world-renowned Internet companies such as Amazon, Google, Baidu, and Alibaba began to research autonomous driving technology. Therefore, backed by a large amount of capital, robotaxi companies such as Waymo, Cruise, Argo AI, and Apollo emerged one after another.

And now when we look at these companies, when capital has lost its enthusiasm for investment, except for the ones that are dead, the only words left are "seeking for survival".

The good news is that after 7 or 8 years, autonomous driving technology has made considerable progress. So compared with Internet car manufacturing, what can it bring to the automotive industry?

In this regard, let’s look at two other examples: Zhiji and Jidu.

In November 2020, Alibaba, SAIC, and Pudong New Area held a signing ceremony to jointly invest in the establishment of Zhiji Automobile. Today, Zhiji has accumulated 3 cars: L7, LS7, and LS6.

Zhiji L7 was the first to be launched, with sales of only a few hundred units in recent months. Zhiji LS7 was launched a little later, but since its launch, the sales volume in a single month has not exceeded 2,000. Zhiji LS6 has just started blind ordering at the Chengdu Auto Show, with a pre-sale price range of 230,000-300,000 yuan, vowing to make a comeback in terms of sales.

Alibaba, which only holds 18% of Zhiji's shares, may not have much say. In contrast, Baidu's large-scale concentration represents another state of Internet companies' car-making.

At that time, Jidu had just been established. Baidu CEO Robin Li personally came to the Jidu Automobile headquarters in Jiading, Shanghai, and said to Jidu’s employees, “I really want to join you and let’s work together.”

Today, car robots that use another way to survive can only be further launched with the help of Jiyue, and Jidu Robo-01 has also become Jiyue 01.

All in all, driven by the tide of the times, "car-making" is in line with the trend of social development and is also where the traffic is. Therefore, major capital and Internet companies are competing to make frequent moves for it.

But the stakes are so intricate that who can tell them clearly?

As the saying goes, the geese passing by leave their voices behind. The digitization, processization, standardization, transparency, etc. brought by Internet companies have finally left something behind for the automobile industry. And one thing is certain, building cars on the Internet will not end here.

It's an end and a new beginning

Looking back at that time, with losses, layoffs, and inability to succeed, every major Internet company, including established companies such as Baidu and Alibaba, was "one big and two big."

And when the four big words "get rid of virtual reality and move towards reality" linger in the minds of every Internet company, the policy tilt and prosperity of the automobile industry next door has become a visible life-saving straw.

Although in the short term, the craze for Internet-based car manufacturing is receding, in the long term, there is still huge room for maneuver in the automotive market.

First of all, the most direct way for Internet companies to enter the automobile market is to invest money.

Tencent invested in Weilai, Alibaba invested in Xpeng and Zhiji, Meituan invested in Ideal... It can be seen that it is not a new thing for major Internet companies to play the role of capital and invest in new car-making forces.

But it is worth noting that investment is also a technical activity. For example, 360 invested in Nezha, Baidu invested in Weimar, etc., but they did not get a good result.

Secondly, it is intelligence.

Smart cockpits and smart driving have become indispensable "standard features" for today's new energy vehicles. It is no exaggeration to say that traditional car companies are not going smoothly in the process of intelligent and electrification transformation. Even now, these car companies still need more software help.

As examples, Huawei 's Hongmeng Cockpit, HI Smart Driving, Meizu's Flyme Auto, Baidu Apollo, etc. all have considerable influence in the automotive industry.

Finally, in addition to empowering the cars themselves, Internet companies can also empower the car companies themselves.

Big data customer acquisition, precision marketing, standardized work processes, cloud migration...Internet companies can bring new ideologies and codes of conduct to car companies from the perspective of their own evolution. Obviously, car companies still need to rely on "tools" to achieve these digital transformations, and Internet companies are the most suitable "crutch."

It is conceivable that there will be a fierce collision between Internet thinking and the traditional thinking of car companies, and the "pains" of this evolution are inevitable. Otherwise, lagging car companies will only be passively "beaten" and be hit by dimensionality reduction.

"If you want to be a great company, you must follow the trend. At this moment, the trend is smart electric vehicles." When Lei Jun was interviewed by CCTV last year, he once again mentioned the importance of the trend and said bluntly: "Don't build cars." , it’s out of date.”

So, is it really outdated if we don’t build cars today? The joys and sorrows of people are not the same, and the answers of various companies such as Xiaomi, Baidu, Alibaba and Tencent will not be consistent.

However, one thing that is certain here is that except for Xiaomi, which is still insisting on fighting for Xiaomi cars, the other major Internet companies have already begun to think about retreating.

In the days when they entered the automotive industry, many changes have indeed taken place in the automotive industry. As for whether they are good or bad, time will judge.