Is the automotive industry a better track?

Cars are no longer just a mobile tool with four wheels and a sofa. It's not enough to have a refrigerator, color TV, large sofa, and double bed installed in a car; it has even been defined as a large-scale e-sports device or a health monitoring device, making the concept of a car increasingly imaginative.

Amidst this development trend, the cross-industry car manufacturing boom is surging. Internet, lithium batteries, mobile phones, real estate, and home appliance giants are all eager to try. Regardless of whether they can personally get involved in car manufacturing, they want to participate in the automotive industry and embrace this industry full of possibilities.

On September 17, Sharp displayed a concept model of an electric vehicle (EV) called 'LDK+' (LDK Plus) in Tokyo, Japan. This model was developed in collaboration with Taiwan's Hon Hai Technology Group (Foxconn) based on an open EV platform.

It's not just Sharp. On September 10, Haier's Lorinser Automobile Customization Industrial Park officially opened. The industrial park has an annual capacity to customize 5,000 complete vehicles and produce 10,000 sets of core components for complete vehicles.

In fact, cross-industry car manufacturing is no longer a new topic. Xiaomi's highly anticipated SU7 is the result of Lei Jun betting his reputation on car manufacturing; Huawei, which claims not to manufacture cars, is partnering with more automotive manufacturers to help them build better cars. In this process, Huawei has become a deep participant in the automotive industry. Meanwhile, 'King of Color TVs' Huang Hongsheng is involved in both commercial and passenger vehicles. In 2021, Skyworth Group developed its first model, the Skyworth ET5. Before entering the new energy passenger car market, Skyworth participated in car manufacturing by acquiring Nanjing Golden Dragon Automobile through the Kaiwo Group.

However, cross-industry car manufacturing is a high-risk venture, with companies like Apple and Dyson already abandoning this track. Rao Zong, General Manager of Skyworth Automobile Marketing, told China Newsweek, 'After nearly a decade of development, China's new energy automobile industry has entered a very brutal elimination round, and the threshold for new players to enter the car manufacturing field has become higher.' However, Rao Zong also believes that sufficient competition is beneficial to the industry's development. 'We welcome more companies to join the new energy automobile industry and work together to make new energy automobiles better,' he said.

Fancy 'roll' car making

Lixiang One's concept of a refrigerator, color TV, and large sofa has generated quite a bit of controversy. However, based on market feedback, it does meet certain market demands. Nowadays, installing refrigerators and color TVs in cars is no longer a novel idea. The first model of Ledo, the L60, which was released on the evening of September 19, comes equipped with the industry's largest-capacity embedded car refrigerator, which was also launched simultaneously at the press conference. This refrigerator is a joint product of Midea and NIO.

Image source: Sharp

Cars are increasingly resembling homes. Sharp's car manufacturing, on the other hand, turns the still-conceptual LDK+ into an 'extension of the home.' The interior of the car is designed as an 'expanded living room,' emphasizing comfort and functionality when the vehicle is parked. The concept car will be equipped with Sharp's self-developed artificial intelligence technology and related sensing technology, aiming to provide a comfortable mobile living and working space.

It is worth noting that Hon Hai Technology, which collaborates with Sharp, has already ventured into car manufacturing. Public information shows that in 2020, Hon Hai Technology announced the MIH EV software and hardware open platform and related key component technologies, officially entering the electric vehicle field. In 2024, Hon Hai plans to mass-produce the Model B electric vehicle and expects to achieve a 5% market share by 2025, with a production target of 500,000 to 750,000 complete vehicles. Hon Hai's planned models also include the Model C, Model E, and Model T.

Installing refrigerators and color TVs in cars and treating them as living rooms is not enough; Meizu has set its sights on young consumers and even allows them to play 'Black Myth: Wukong' in their cars.

Image source: Starry Meizu

On September 25, Starry Meizu and Lynk & Co jointly launched the world's first Flyme Auto high-performance e-sports entertainment cockpit, STARBUFF. The two Lynk & Co Z10 models equipped with STARBUFF have retail prices of 242,800 yuan and 329,800 yuan, respectively, and are expected to be delivered starting in November. Notably, the games run locally without the need for cloud gaming or separate purchases of PS5. AMD V2000A desktop-grade chips, AMD RX6600M dedicated graphics cards, water-cooled cooling, Samsung OLED automotive-grade high-refresh screens, and 1TB solid-state drives have all been installed in these cars.

Image source: Skyworth Automobile

Skyworth, on the other hand, has brought the concept of health monitoring into cars. 'Skyworth's 800V supercharging model has upgraded its health system to version 3.0, offering services such as health seats, heart rate scanning, emergency contact calling, and one-click doctor transfers. Through a comprehensive health model, it safeguards the health of car owners in all aspects. It also features configurations like negative ion air conditioners and airbag massage cushions, transforming the interior space into a health guardian for car owners,' said Rao Zong. Nowadays, people are increasingly concerned about their health, and Skyworth hopes to create a third space for 'strivers,' he added.

Why the automotive industry?

Previously, a Sharp spokesperson acknowledged at a press conference that the emergence of the new electric vehicle product stemmed from pressure caused by the shrinking of its main business. Sharp explained that as its liquid crystal display panel business, which supports the company's operations, has shrunk due to market downturns, the company hopes to establish electric vehicles as a new revenue pillar.

Data shows that Sharp has faced sustained losses over the past period, with its net sales falling nearly 10% in fiscal year 2023. Its primary area of loss was its display and electronic equipment division, which has traditionally been considered its strength. In terms of operating profit, the company recorded a net loss of 14.99 billion yen in fiscal year 2023. In the second quarter of this year, the company's consolidated revenue further declined by 1.7%.

Meanwhile, the new energy vehicle market is growing rapidly. According to data from the China Association of Automobile Manufacturers, from January to August 2024, the production and sales of new energy vehicles reached 7.008 million and 7.037 million units, respectively, up 29% and 30.9% year-on-year. After achieving electrification in the first half, the second half of the development of new energy vehicles, characterized by intelligence, has arrived.

Rao Zong said, 'China's new energy automobile industry has entered a period of rapid development, with an average annual growth rate of 87%. It is expected to exceed 10 million units in 2024. China's new energy industry chain, from source to end, has gradually improved its layout, and terminal exports have increased year by year. China's new energy industry is moving from the domestic market to the global market.'

In the new energy vehicle market, traditional automakers need time for technological transformation, which provides ample market space for new automakers and allows cross-industry companies to see the possibility of entering the market and sharing the pie.

The head of Sharp said, 'We can fully utilize our manufacturing experience in household appliances to create comfortable spaces in cars. To be honest, it's difficult to compete with automakers in terms of car performance. However, from the perspective of creating comfortable spaces, the technology and knowledge accumulated by Sharp can play a role.' Regarding the difference from camping vehicles, he explained, 'Sharp's LDK+ is a car that does not require accommodation as a premise. It takes into account daily use and is controlled within the size of a regular car.'

Cross-industry car manufacturing, 'survival of the fittest'?

In fact, the seemingly booming automotive industry has already entered an 'elimination round.' Many companies that previously announced their entry into cross-industry car manufacturing with fanfare have abandoned this track. It is still uncertain whether car manufacturing can lead to a bright future, but first, companies must 'survive.'

At the beginning of 2024, Apple announced the cancellation of all development plans for its autonomous electric vehicle project and instead increased investment in the field of generative AI.

Prior to this, Dyson also canceled its electric vehicle manufacturing project. James Dyson, the founder of Dyson, said, 'This decision was not made because there were problems with the product or the car team. Producing cars is more complex. Although we worked hard throughout the development process, we could no longer see a way to make it commercially viable.'

In China, real estate companies like Baoneng, Evergrande, and Agile have basically abandoned their car manufacturing efforts, and only those that can persevere in the brutal market competition stand a chance of further success.

Lei Jun previously talked about Xiaomi's long-term development goals for its automotive business: to become one of the top five automakers globally through 15-20 years of effort. He said, 'Goals are still necessary; what if they are achieved?' In August 2024, Xiaomi delivered over 10,000 SU7 vehicles, marking the third consecutive month of deliveries exceeding 10,000 units. Xiaomi Automobile officially expects to complete its annual delivery target of 100,000 vehicles ahead of schedule in November.

Rao Zong said, 'Opportunities and challenges coexist. While the new energy automobile industry is developing vigorously, it is also facing brutal market competition. Only by continuously innovating and maintaining a forward-looking spirit can we stand out in the final battle of new energy vehicles.'

Rao Zong revealed that Skyworth Automobile will continue to increase investment in product research and development to continuously improve product quality. Within the next five years, it plans to launch six models. Specifically, a mid-sized SUV facelift model (codename BE12) will be the first to arrive, featuring a new design language and power system. It is expected to be launched in the second quarter of 2025. A new all-electric model positioned as an A-class compact crossover (codename AE21) will enter mass production in the fourth quarter of 2025. A mid-to-large flagship sedan (codename CE11), which will be equipped with air suspension and rear-wheel steering, is scheduled for mass production in the third quarter of 2026.

Skyworth Automobile's Co-CEO Han Biwen said that the company has fully entered the 2.0 era. Since 2010, Skyworth Automobile has transitioned from automotive electronics to an entire vehicle enterprise. After 14 years of new energy vehicle technology accumulation, it has a presence in more than 60 countries and regions worldwide, serving over 100,000 users. Its annual export growth rate has reached 350%, and it is expected to achieve a target of 100 billion yuan by 2030.

Cross-industry car manufacturing is blurring the boundaries between the automotive and technology industries, and integration is the general trend. Whether by directly participating in car manufacturing or actively collaborating with automakers, embracing the automotive industry has become a common choice. For consumers, cars with increasingly diverse functionalities will continue to enhance their experience. The possibilities for future cars are boundless and full of imagination.