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GEVDC 2016: cooperation instead of confrontation needed for both old and new players to build future vehicles (I)

SHANGHAI – Electrification, smartness, light weight and sharing are the four trends shaping and driving the auto industry forward. Hosted by d1ev.com, an NEV information service and trade platform, experts and scholars from both traditional automakers and new startups spoke at the Global Electric Vehicle Developer Conference (GEVDC 2016) held on August 5 in Shanghai about future ways of building cars.

To “redefine the automobile,” three round table salons with themes of On road leads to the future: who will get a passport; The eve of breakthrough: technology points worth noticing at present;and Openness, group innovation and sharing: development models for future vehicles were held. Following are highlights of these discussions. – Editor

 

 

Pang Yicheng: Technology advancement lowers entry level barrier for car making

“Technology advancement has drastically lowered threshold on manufacturing,” said Pang Yicheng, chairman of Zhidian Interaction Group and CEO of d1ev.com.

He believes firmly that there would be a sea of changes within the auto industry and it is already going on.

Will the building of future vehicles continue the old way of heavy investment and R&D as it did for the last century? Is there another way for car making in the future? Pang posed the questions but did not give an immediate answer.

Pang introduced his blueprint for d1ev.com. In the first step, it would start with the conference to build an open platform to draw in excellent engineers, youngsters and friends from industries and investments and strengthen communication within the industry.

Second, it will set up a future automobile developer fund by industry crowd-funding. The aim is to bring together industry resources to nurture promising seeds.

The third is to launch a model of crowd-funded national car.

In his assumption, the model would be priced under ¥50,000 ($7,692) and has at least 35 kW of electricity to support a range of above 300 km.

Pang also expects autonomous driving to come by 2025, bringing changes to the auto ecosystem.

 

Zhang Yong: Revere on car building and respect intruders   

Traditional carmakers should revere on car building and respect social capital and savages willing to go for it, according to Zhang Yong, general manager of BAIC BJEV Sales & Marketing Co.  

He has abundant reasons: since a customer has left his trust and even life safety to automakers, they are obliged to build a trustworthy, reliable and sound performing car. For those social capital and savages who are willing to enter the red sea industry with cutthroat competitions, their courage is admirable.

For traditional carmakers, a key issue is to maintain a good relationship with customers.           

BAIC has done two things: launched a new brand and reconstructed flow on product design.

The decision was made based on two points. First, mainstream auto consumers for the next 3-5 years are post 80s and 90s generation buyers. Their living conditions, life styles, travel preference are different from today’s consumer groups. They need more than a mobility tool, but a platform to socialize, a terminal for smart mobility, a cool and fun product.

“We define these people as a group which is quite creative with independent ideas on pursuing life quality,” said Zhang. 

He believes traditional auto OEMs are in a relatively enclosed industry. Common practices involving car making are to conduct market research, study rivalry brands, put forward a product definition and rely on research organizations for product development. Following these practices, before hitting the market, consumers know little about products and therefore the products cannot grasp consumers’ real needs. 

For these reasons, BAIC brings in group innovation mechanism in the aim that consumers, designers and R&D organizations can participate together in the development.

 

Those that can truly grasp customer needs can be recognized and get passports

Only companies that understand various customer needs can be recognized by consumers and win the passport, according to Wang Guangyu, vice president of JAC Motor.

For JAC, the first step for its product development is to tell consumers’ values and needs and then gather all resources to R&D. Since the first generation of NEV product launched in 2010, JAC has developed six generations of products.

When it comes to manufacturing, JAC follows closely on NEV technology development trends home and aboard and integrates them into its R&D. It also modifies and makes elevation on new generation of products with feedbacks and suggestions from previous generation product users. The practice has been recognized by customers, according to Wang.

“What we offer for future customers are not vehicles in their real meaning, but a kind of life style and life form,” said Gao Lixin, president of Chery New Energy Automobile Co., Ltd.

Gao suggests industry players to adjust positioning and stand in a future perspective if they want to restructure vehicles. 

Youxia Motor’s president Wei Jun believes only those that bring the best and most delicate products to customers can lead the future.

Liu Xinwen from Yudo New Energy Vehicle Co., Ltd. said those who can get passports must be steadfast, open, innovative and good at breakthroughs.

A subtopic of whether traditional auto OEMs know much about consumers aroused an interesting debate.

Gao did not agree on the division of traditional carmakers and new players that have emerged. He believes traditional companies are not that ignorant and incompetent as imagined by many.

“When building cars, they do an at least 15-20 years of foresight study,” said Gao. One biggest advantage traditional carmakers have is to bring a plan down on ground. Traditional companies are always in the process of self R&D and elevating, added Gao.

Another heated topic is how to face with the NEV subsidy phase out over the next three to five years.

Wang believes what prompts a customer to buy a vehicle is its value, other than the price. A customer cares more about whether his or her needs are met and required functions are equipped. Still there are several years left for the subsidy policy and enterprises must cut costs and create more profit points.

Liu mentioned some industry estimations over the post 2020 era.

Customers have been educated and have higher degree of acceptance of NEVs and can tolerate more on price increase; cost for building a car will decrease drastically in the future to compensate for falling prices; the nation will release other policies like more road rights to relay current ones; the lightness of vehicles and reduced battery pack usage may turn future vehicles into smaller ones, thus bring down costs.

He summarized that it is a problem facing the whole industry and there would definitely be a way out.

Gao believes the NEV industry has come into a crucial stage of development. There should be continuous subsidies. For Chery itself, it has built NEV brand and try to mobilize capital chains, industry chains and supply chains within the industry to innovate.

Wei says the EV industry in its current stage can survive and continue to boom without subsidies. 

In a future without subsidies, enterprises can still win out by bringing medium and high-end products with extraordinary experience to customers like what Tesla is doing right now. He suggests enterprises make better use of subsidies and invest more into R&D and innovation to be more competitive.

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