Involution in China's Auto Industry Insights and Views from Executives
TapTechNews June 8th news. At today's 2024 Chongqing Auto Forum in China, Li Bin, the founder, chairman and CEO of NIO, gave a speech and also talked about the topic of 'involution' in the current Chinese auto market.
Li Bin straightforwardly said that 'involution' in the automotive industry is a normal result of market competition, and at the same time also called on car companies 'not to forget to cooperate', especially in areas related to infrastructure. 'When it comes to long-life batteries and going overseas, cooperation is needed.'
Li Bin said that the Chinese auto industry 'all flourish or all fail' - in the end, it is impossible to have only one or two left, it must be the collective success, not just the success of one enterprise.
Li Bin also mentioned the problem of the lifespan of electric vehicle batteries this time. He believes that if the lifespan of the car exceeds the lifespan of the battery, it is a relatively big problem and everyone needs to pay attention to this matter in advance. 'Call on everyone to pay attention to this matter in advance and develop long-life batteries, and make good plans for long-term battery warranties and subsequent after-sales services.' He also said that if the battery lifespan problem is not solved, within eight years, the batteries of more than 20 million vehicles will be out of warranty.
TapTechNews summarizes the following partial views of the executives of various car companies expressed at this forum:
Zhu Huarong, chairman of Changan Automobile: 'Involution' is the process of good currency expelling bad currency. Involution itself means the pursuit of excellence, which will roll out a new height of Chinese brands and will roll out the maximization of user benefits and truly create value for users.
Zeng Qinghong, chairman of GAC Group: In 2030, the auto market will be a '433' structure, 40% will be hybrids, 30% will be pure electric, and 30% will be fuel vehicles. It is suggested that when the share of new energy vehicles and pure electric reaches 50%, the government departments should study 'equal rights for fuel and electricity'.
Wang Chuanfu, chairman and president of BYD: There is内卷 only when there is competition, and only by内卷 can there be technological breakthroughs, industrial upgrades, and excellent products can be born. Involution is a natural law, don't be anxious, and only by actively embracing can one come out from the competition.
Li Yunfei, general manager of BYD brand and public relations: Many car companies such as BYD have raised prices in the past two years due to factors such as subsidy withdrawals and the rise in battery raw material prices. But now the situation has changed, and the significant drop in raw materials makes price reduction possible. 'Why isn't the drop in raw material costs reflected in product pricing now? I think this is immoral to consumers.'
Li Shufu, chairman of Geely Holding Group: The degree of involution in China's automotive industry is the highest in the world, and the price war is wave after wave, which is also unrivaled in the world. This phenomenon is both a good thing and a bad thing. If the marketization level is high, the law is sound, the law enforcement is strict, and the competition is transparent and fair, it is a good thing; otherwise, it is a bad thing.