Source: Snow Leopard Finance

2023 is a year in which traditional luxury cars represent the BBA, faced unprecedented challenges.

From “Wei Xiaoli” to Huawei and BYD, independent brands are piling up to release new models that cost 500,000 or more. “If you don't work hard, you can only start a BBA” was once a hot topic on social networks.

In 2024, they want to go even further. The ambition of NIO ET9 is to “seize the BBA's core base”, and the ideal is to “challenge BBA's sales volume in China.”

However, in “Song of Ice and Fire” throughout the year, the upstarts didn't necessarily have a good time.

On the one hand, the popularity is unabated: monthly sales of new energy vehicles broke one million for the first time, automobile exports rose to number one in the world for the first time, and the world's auto giants took a stake in a new car manufacturer for the first time.

The other side is the harsh cold: from car companies to dealers to supply chains, they are all mired in price wars and forced to walk a tightrope between profit and market share.

In 2024, which direction will the balance tilt? What stories from yesterday will be repeated? What new faces will be on the stage? Who will be blessed with extraordinary wealth, and who will be confused and confused?

Based on industry reports, media reports, and interviews with industry insiders, Xuebao Finance & Economic News made the following 22 judgments on the automobile industry in 2024:

1 Tesla: Joining the trillion-dollar club

On the last trading day of 2023, Tesla's market capitalization reached US$788.7 billion, an increase of more than 100% for the whole year. However, there are mixed opinions about its performance in 2024.

Wade Bush analyst Dan Ives believes that the NEV company with the highest market capitalization in the world is expected to join the trillion dollar club in 2024. US investment bank Bernstein analyst Toni Sacconaghi believes that Tesla will have to continue to cut prices to boost sales, profit margins will drop further, and sales will also be disappointing. Tesla is “the best shorting target in 2024.”

In 2023, Tesla delivered 1.81 million new vehicles, achieving its sales target. However, due to the lack of new models, price reduction promotions have been its main means of competition in the past year. As a result, Tesla's net profit in Q3 last year was nearly lower than the previous year, and gross margin fell below 18%, hitting a new low of 17 quarters.

Morgan Stanley believes that Tesla's gross profit outlook is not optimistic. It is expected to fall further to 10% in 2024, and the possibility that Tesla's core operating profit margin in a single quarter will become negative is not ruled out.

The problem with Tesla's single product line is likely to improve in 2024. Delivery of the Cybertruck electric pickup began at the end of 2023. Venture capital agency Loup Ventures predicts that Tesla's affordable models may be launched in 2024 and production expansion will begin in mid-2025.

2 Musk: Expected to become the world's first trillionaire

According to the latest report released by cloud computing procurement solution provider Approve.com, Tesla CEO Elon Musk is expected to become the world's first “trillionaire” in 2024.

According to the “Forbes” Rich List statistics, as of December 15, 2023, Musk's net worth was 254.9 billion US dollars. His personal wealth increased by $108.4 billion in 2023, which is equivalent to an average daily wealth increase of nearly $300 million.

According to Musk's commercial landscape, Tesla's market capitalization has grown by more than 100% in the past year, close to 800 billion US dollars; SpaceX completed 96 launch missions throughout the year, with a valuation of more than 150 billion US dollars; X (former Twitter) was underestimated after being acquired, but it was still 19 billion US dollars; and the valuation of X.AI, an artificial intelligence company that was founded less than half a year ago, has reached 10 billion US dollars. Additionally, Musk owns a number of unicorn companies.

These companies will continue to add to Musk's personal wealth growth in 2024.

3 BYD: Sales volume reaches 4 million units

Over the past 3 years, BYD has increased its annual sales volume 7.37 times. But in 2024, institutions are generally cautious about their prospects of continuing to soar.

Guosheng Securities believes that BYD's sales will be “relatively weak” this year. According to Open Source Securities and SPDB International Securities, BYD's “sales growth rate is under pressure” this year. SPDB International Securities predicted sales data: it is expected to reach 4 million units, up 32.5% year on year, and the growth rate is nearly half slower than in 2023 (62.3%).

The decline in sales growth will drag down the net profit growth rate. According to SPDB International Securities estimates, BYD's net profit this year will increase 34% year over year. In the first three quarters of last year, BYD achieved a total net profit of 21.367 billion yuan, an increase of 129.5% over the previous year.

Going overseas and moving towards the high-end market will be two important directions for BYD. Currently, BYD is speeding up its deployment in Europe and announced that it will build Europe's first NEV production base in Hungary. Minsheng Securities said in a research report that this year, BYD will form a Tense+Equation Leopard+ high-end brand matrix, fully impacting all price ranges.

4 NIO: Nothing new throughout the year, the key variable is Alps

NIO, which released 6 new cars in one go in 2023, will not fight so hard in the new year.

NIO will not launch a new car throughout 2024. With a starting price of 800,000 yuan, the target rival is the Mercedes-Benz S-Class and BMW 7 Series ET9. It will not be delivered until the first quarter of 2025 at the earliest. Its mission is to “seize the BBA's core base.”

“Selling cars” will still be NIO's key word for the next year, but the burden of making explosions and canceling sales falls more on the sub-brand Alps.

Alps focuses on the mid-range market of 200,000 to 300,000 yuan, and is expected to be officially released in May 2024. NIO will add 1,000 new power exchange stations in 2024, and the focus of construction will also shift to serving Alps and other partner car companies. However, Li Bin doesn't seem to be anxious about the timing of the launch of the first model. He plans to “wait until everyone is exhausted before pushing” and be the person who “lifts the table.”

Guosheng Securities expects NIO's annual sales volume to reach more than 200,000 units in 2024. This is similar to Li Bin's judgment. He expects that after the first quarter of 2024, NIO will steadily maintain monthly sales of more than 20,000 vehicles, and strive to maintain a market share of more than 40% of the 300,000+ pure electric market.

5 Ideal: Sales challenge BBA, pure electric and smart driving speed up remediation courses

“Challenge BBA's sales volume in China and become the number one selling luxury brand in 2024.” This rhetoric posted on Weibo was brought to the earnings conference call by Li Xiang and became Ideal Auto's number one goal in 2024.

In 2024, the ideal target sales volume is 800,000 units, more than double the previous year, and just surpassing the highest BMW in the 2022 BBA (792,000 units).

In addition to challenging the BBA, I also have two goals in 2024. First, through the L6, it entered the market with a price range of 200,000 to 300,000 yuan and delivered 3 new pure electric vehicles; the second was the launch of NOA (Autonomous Assisted Navigation and Driving), which is based on a large model and covers all cities.

6 Xiaopeng Motors: Cutting Costs, Sinking, and Going to Sea

He Xiaopeng, who once imagined that flying cars would appear in 2024, had to think hard to solve the problems on the ground in front of him.

Beginning in Q1 of 2023, Xiaopeng's gross vehicle margin was negative for 3 consecutive quarters, making it urgent to continue to cut costs. He Xiaopeng's goal is to achieve a 25% reduction in overall costs and a significant improvement in gross margin by the end of 2024.

A task as important as reducing costs is increasing efficiency. In 2024, Xiaopeng will continue to expand its product lineup in multiple price ranges. The MPV model X9 was launched on January 1, with the goal of “becoming the number one sales volume in the Chinese pure electric MPV market of over 300,000 yuan”. The 150,000 yuan MONA is expected to go public in Q3, and He Xiaopeng believes it will sell more than 100,000 vehicles a year. In addition, Xiaopeng will also launch two facelift models of existing models.

In 2024, Xiaopeng will continue to set up sales outlets in third- and fourth-tier cities to increase sales in low-tier cities. Xiaopeng's current most-moving G6 will successively land in the European and Southeast Asian markets, and NGP (Intelligent Navigation Assisted Driving) will also fully cover Europe.

7 Xiaomi car: the first battle was a decisive battle, the new car is not cheap

The Xiaomi car was officially unveiled 3 days before it opened in 2024. Lei Jun spent 3 hours announcing almost all product and technical details other than pricing, while also vaccinating the car for being “not cheap.” “The goal set by Xiaomi is to be comparable to Porsche and Tesla.”

Xiaomi has not given a specific sales target for 2024, but Lei Jun mentioned in his personal biography that it is only meaningful for Xiaomi cars to reach the top five in the world and have an annual shipment volume of more than 10 million vehicles.

Whether Lei Jun's ultimate goal can be achieved, pricing will be one of the decisive factors. Tianfeng Securities analyst Guo Mingyi previously predicted that the price of Xiaomi cars will be less than 300,000 yuan, and the estimated shipment volume in 2024 is 50,000 to 60,000 units; if the price is close to or even lower than 250,000 yuan, there is room for an increase in shipments.

The market's pricing expectations for Xiaomi cars are generally between 200,000 and 300,000 yuan, and competition in this price range is particularly intense. Furthermore, Lei Jun's goal is to enter the first camp in the autonomous driving industry by 2024, which is also a tough battle.

8 Huawei: Back to the table and develop offline channels

In 2024, Huawei, which does not build cars, will still be one of the players that cannot be ignored on the NEV table.

Yu Chengdong, chairman of Huawei Smart Car Solution BU, summed up the past year in a New Year's letter to all employees: Huawei Smart Choice's first brand inquiry experienced a trough and recovery; split the BU to dispel partners' concerns about “losing their soul”; and upgraded Huawei Smart Choice to Hongmeng Zhixing to create an “ecological brand alliance.”

Yu Chengdong's 2024 plan is to continue to establish the Hongmeng Zhixing Ecological Alliance to achieve commercial success.

In 2024, a number of new models in collaboration with Huawei and the “brothers” will be launched one after another, including the Wanjie M9, which will be delivered in collaboration with Cyrus at the end of February, and the first model in collaboration with Chery, the Zhijie S7. Smart cars in collaboration with JAC and BAIC are also scheduled to be launched this year. Huawei is building independent Hongmeng Zhixing stores for Smart Select Cars. The number of stores is expected to reach around 800 this year and hit 1,000 in 2025.

The Ping An Securities Research Report predicts that in 2024, the domestic sales volume of Huawei's deeply empowered models (Insight, Smart World) is expected to reach 670,000 units, or surpass Tesla.

9 Didi: Give up car building and take back the online car-hailing market

After losing 3 billion dollars in two years to build cars, Didi chose to give up “going it alone” in 2023 and sold the car building project to Xiaopeng Motors for a total consideration of 5.4 billion yuan.

The two will jointly launch a new brand codenamed MONA. The first mass-produced model will be an A-class smart electric vehicle with a price of 150,000 yuan. It is expected to be launched in 2024. The target audience is C-end consumers and B-side online car-hailing fleets.

The ride-sharing business is still DiDi's basic business. After 18 months of removal, the DiDi App was re-launched on the App Store in January 2023 to resume new user registrations. After returning to the table, Dititron set aggressive daily order volume growth targets: 45% growth in 2023, and 10% to 15% annual growth in 2024 and 2025.

A number of brokerage analysts who have been concerned about the travel sector for a long time told Xuebao Finance and Economics that Didi's self-operated online car-hailing business has limited room for growth in the next few years. The main growth points will come from ride-sharing business with lower customer unit prices and the independent brand Flower Piggy for a sinking market.

10 Domestic car market, market growth slightly

The general auto market will continue to maintain a slight upward trend. Cui Dongshu, Secretary General of the Passenger Transport Federation, predicts that in 2024, domestic passenger car retail sales will increase 3% to 22.2 million units, a slowdown from 5.6% the previous year; wholesale sales of new energy passenger vehicles will be 11 million units, up 22% year on year, down from 36.5% in 2023.

Tao Yu, director of industry analysis at S&P Global Auto China, said that in 2024, production and sales in the domestic automobile market will show a trend of low to high levels. The first half of the year will focus on inventory removal, and the actual increase in volume is expected to be concentrated in the second half.

Slower growth will inevitably lead to more intense competition. SDIC Securities said in a research report that the fiercest competition will come from the 200,000 to 300,000 yuan price range.

11 Global car market, recovering cautiously

S&P Global Mobile expects global new car sales to reach 88.3 million units in 2024, up 5.6% year on year, the same growth rate as last year. Colin Couchman, executive director of the agency's Global Light Vehicle Forecast, believes this year will be a year of cautious recovery for the global automotive industry.

The sales growth rate of new energy vehicles will be significantly higher than the overall growth rate of the industry. In a research report, CICC estimates that in 2024, global NEV sales are expected to reach 17 million to 18 million units, an increase of 30% to 35% over the previous year.

Among the newly sold cars, there will be more and more pure electric models. S&P Global Mobile expects global sales of pure electric models to reach 13.3 million units in 2024, up 38.5% year on year, up 32.8% from the previous year.

12 The price war is endless

The price war provoked by Tesla will not come to an end in 2024.

A number of agencies predict that car companies will still bear the pressure of exchanging price for volume this year. Huachuang Securities said in a research report that from 2023 to 2024, there may be a price war that will go down in the annals of the Chinese auto market. Wang Chuanfu, chairman of BYD, determined that this war will continue for three to five years.

“The competitive barriers such as service, operation, and product positioning that automobile manufacturers previously emphasized have all become less effective; only price reduction is the most effective.” Li Yanwei, a member of the expert committee of the China Automobile Dealers Association, commented.

13. Fuel-powered vehicles: a “hopeless” tomorrow is golden

The process of replacing fuel vehicles with new energy vehicles will accelerate in 2024, and plug-in hybrid models will be the accelerator of this trend.

McKinsey said that this year's plug-in hybrid models will continue to be the core force driving further growth in the penetration rate of new energy vehicles in China on a high basis, and will put what can be called “hopeless” alternative pressure on fuel vehicles. Fitch also believes that plug-in hybrid models will become the main growth engine in the domestic automobile market.

Ping An Securities predicts that in 2024, domestic fuel vehicle retail sales will drop by 800,000 to 1 million units. The most affected brands are Volkswagen, GM, Toyota, Honda, Nissan, and self-branded fuel vehicles.

14 High-end market: Aggressive independent brands rank C

At the end of 2023, NIO released the ET9, an executive flagship sedan with a pre-sale price of 800,000 yuan, and the Quanjie M9 with a starting price of 469,800 yuan. Prior to that, BYD also looked up to the U8 for 1,098,000 yuan, the Extreme Krypton 001 FR starting at 769,000 yuan, and the ideal pure electric MPV with a pre-sale price of less than 600,000 yuan.

“If you don't work hard, you can only start a BBA” was once a hot topic on social networks.

At the same time, traditional luxury cars are being sold at lower prices. Huachuang Securities anticipates that the price reduction of luxury B-Class and C-Class cars may exceed 15% this year.

McKinsey said in a research report that this year, the brand reputation accumulated by traditional luxury car brands in the fuel vehicle era will face greater challenges, and it is expected that more and more smart electric vehicles of Chinese brands will appear in the range of 500,000 yuan or more.

15 Power battery:

Overcapacity continues, and the risk of price wars increases

The haze of overcapacity enveloping the power battery industry will still be difficult to dissipate in 2024. The Institute of Advanced Industrial Research predicts that even if ineffective production capacity is excluded, the effective capacity utilization rate of the domestic power battery market will still be less than 60% in 2024.

The overall growth rate of the power battery industry will also slow down along with the growth rate of NEV sales. TSE Futures predicts that domestic power battery demand will reach 546 GWh this year, an increase of 27% over the previous year, which is slower than last year's 40% increase.

Overcapacity and slowing growth, combined with car companies developing their own batteries, have made price cuts a weapon for power battery companies to compete for the market. Southwest Securities anticipates that the risk of a power battery price war will increase in the future. Huatai Securities, on the other hand, believes that under pressure, the advantages of leading companies will become more prominent, and the profitability of the industry may continue to diverge.

16 Refueling: 800V high-voltage fast charging will become standard for pure electric vehicles

Guolian Securities anticipates that a fast charging scheme based on 800V high voltage is expected to become standard for pure electric models in 2024.

The 800V high-voltage platform has become a new battleground for car companies. Compared with the 400V platform, the 800V high voltage platform can more than double the charging speed without changing the power. Take Xiaopeng's first mass-produced 800V high-voltage SiC platform as an example. The maximum battery life of 200 kilometers can be added after 5 minutes of charging.

On the electricity exchange circuit, NIO will add 1,000 new power exchange stations in 2024, which is basically the same as last year. In a research report, Open Source Securities estimates that the domestic electricity exchange industry market is expected to reach 133.4 billion yuan in 2025.

17 Autonomous driving: urban NOA takes the lead

China Galaxy Securities anticipates that urban NOA will be the main theme of the autonomous driving industry in 2024. Western Securities predicts that the number of models equipped with NOA will reach 1.69 million this year, an increase of 141.43% over the previous year.

In 2023, influenced by Tesla's 3D sensing autonomous driving system (BeV+Transformer) based on a visual system, “heavy perception, light map” became the key word. This technical route, which does not rely on high-precision maps, can reduce software costs and sensor usage, so that intelligent driving can cover more models.

Huaxi Securities said that smart driving has now effectively influenced consumers' car purchase decisions. In the future, leading car companies that can identify differentiated selling points and leading technology will differentiate themselves in the “standard smart driving” era and maintain their leading edge for more than two years.

18 The number of Chinese automobile exports may set a new record

Cui Dongshu, Secretary General of the Passenger Transport Federation, predicts that in 2024, the number of passenger car exports will reach 4.3 million units. Anxin Securities's forecast in a research report is more optimistic: 4.75 million vehicles, an increase of 20% over the previous year.

Whichever number it is, it will be a record breaking record. According to the Passenger Federation, passenger car exports last year reached a record high of 3.83 million units, an increase of 62% over the previous year. Agencies generally expect Southeast Asia and South America to be important incremental markets.

In the process of passenger cars going overseas, new energy vehicles are playing an increasingly important role. Nomura Orient International Securities predicts that the share of NEV passenger vehicle exports will rise from 28% in 2023 to 35%.

Furthermore, Chinese cars going overseas are expected to enter a new stage of territorial operation. McKinsey said in a research report that more and more domestic car companies will transition from simple vehicle exports to territorial assembly, territorial procurement and production, and even territorial R&D.

19 Mergers and Acquisitions and Bankruptcy: Accelerating Consolidation 2024

A report from 6 years ago accurately predicted the possibility of car companies moving towards mergers and acquisitions in 2024. Roland Berger pointed out in a 2018 report that it is expected that starting in 2024, the cooperation model between traditional car companies and new car builders will further deepen, and there will gradually be mergers and acquisitions and industry integration between old and new forces.

In the future, mergers and acquisitions will not only happen between old and new forces being reshuffled. McKinsey pointed out that the trend of integration in the Chinese auto market will shift gears and accelerate in 2024, and mergers and acquisitions will become a hot topic in the industry. For foreign car companies and suppliers eager to fill the gap between electrification and intelligence, the urgency of mergers and acquisitions is self-evident. At the same time, mergers and acquisitions will also occur between leading car companies versus technology innovators and relatively weak companies.

Along with the Matai effect of car companies, the bottom echelon of new energy vehicles may face a bleak end, including companies such as WM Auto, which has experienced a bankruptcy crisis and is still pushing for corporate restructuring, Skyrim Auto, whose 240 million shares have been frozen, and Ace, which is in arrears in salary.

New foreign automobile forces are also facing the same situation. CFRA automotive analyst Garrett Nelson pointed out that car companies such as Rivian, Polestar, Lucid, and Fisker may face challenges due to profit issues and high cash consumption rates.

20 Dealers: Maybe a break

Dealers didn't have a good time last year under the impact of inventory pressure and price wars. According to statistics from the China Automobile Dealers Association, only 37.4% of dealers completed their annual tasks in 2023.

This year, dealers may be able to take a break. Huachuang Securities predicts that the automobile industry is expected to move from active inventory removal to passive inventory removal this year, so the impact of the boom or inventory on prices will weaken relatively this year, which means that dealer terminal discounts will decrease.

21 Industry Salary: Smart Connected Workers Get the Most Salary Increase

The Sino-Chilean Consulting Research Institute predicts that the automobile industry's salary adjustment rate in 2023 will be 5%, and this year it is expected to remain flat. If broken down by industry, workers in the ride-sharing, vehicle, and auto parts industries will have a lower salary adjustment rate this year than last year. Among them, the lowest salary adjustment rate is for vehicle workers (4.8%); the salary adjustment rate for NEV, automobile service, and intelligent connectivity workers this year will be higher than last year. Among them, smart connected workers may get the highest salary adjustment rate (8.5%).

22 Used car market: continues to grow positively under favorable policies

2023 is the first year of full implementation of the new used car policy. Next, the continuation of the value-added tax reduction policy may further benefit market development. According to a survey released by the China Automobile Dealers Association, 70% of used car managers expect positive growth in used car sales in 2024, with 33.3% believing that the growth rate is between 0% and 10%.

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