Four years ago at the 2020 Guangzhou Auto Show, there were numerous reports about "abandoning fuel-to-electric conversions." The Volkswagen ID.4 series, Aion Aion Y, and other electric vehicles made their debut, marking a new phase for their respective brands. Fuel tanks at that time were like Trump, who had just lost the election, and it was considered "politically correct" to distance oneself from them as soon as possible.

No one could have predicted at the time that four years later, Trump would become the winner of the US presidential election again; and new energy vehicle companies that embraced fuel tanks became the protagonists of the Guangzhou Auto Show.

As the last A-class auto show in China each year, the Guangzhou Auto Show is often a bellwether for domestic automotive trends in the coming year. A prominent feature of this year's Guangzhou Auto Show is that automakers are joining the "fuel-electric hybrid" camp.

According to YuanMeiHui's analysis, more than 10 mainstream new energy brands will showcase their REEV (Range Extended Electric Vehicle) or PHEV (Plug-in Hybrid Electric Vehicle) models at the Guangzhou Auto Show, including Aviatar, GAC Aion AOHPO, and other brands that previously focused solely on pure electric vehicles.

Aviatar's exhibit at the 2024 Guangzhou Auto Show

A grand drama about the "Renaissance" of fuel tanks is unfolding. However, many chapters of this story are not as simple as they seem on the surface.

01

Join if you can't beat them?

On the eve of the Guangzhou Auto Show, the shift of pure electric brands towards "fueling" has already caused quite a stir in the automotive industry.

On November 4, media reported that NIO's upcoming third brand, "Firefly," will launch its extended-range hybrid vehicles in the Middle East, North Africa, and European markets. On November 6, He Xiaopeng, Chairman and CEO of XPeng, officially announced the Kunpeng Super Electric System, featuring an ultra-long pure electric range of 430 kilometers, which is rare in extended-range hybrids.

If NIO, which is already fully committed to battery swapping, chooses to enter the extended-range market, it may be a delaying tactic due to factors such as European tariffs and the difficulty of matching the grid infrastructure in the Middle East and North Africa with that of China. On the other hand, XPeng's entry into the extended-range market reflects its eagerness for short-term sales growth.

"Combining the two chemical energy sources of 'one car with two capabilities' and using them well will greatly enhance the future development of XPeng Motors in both the Chinese and global markets," He Xiaopeng said during a media interview after the AI Technology Day event on November 6.

How much can embracing fuel tanks help sales? In the fiercely competitive new energy vehicle market priced below 200,000 yuan, BYD has delivered a monthly sales volume of 500,000 units, relying on multiple PHEV models such as the Song PLUS, Qin PLUS, Qin L, and Haibao 06.

As for the market above 200,000 yuan, according to Dongchedi data, among the top 10 selling new energy vehicle models this year, only the Model Y, Model 3, and Xiaomi SU7 are pure electric vehicles, while the rest are extended-range or plug-in hybrids, such as the Li Auto L6, L7, and AITO M9, M7.

According to data from the China Passenger Car Association, the current sales growth rate of extended-range and plug-in hybrid models in China far exceeds that of pure electric models, with sales reaching 117,000 and 361,000 units in September, respectively, representing year-on-year growth of 89.1% and 96.7%.

Seeing other new energy vehicle companies with fuel tanks making substantial profits, who wouldn't be envious? In the past six months, in addition to the aforementioned NIO, XPeng, Aviatar, and AOHPO, which will bring their new extended-range models to the Guangzhou Auto Show, Zeekr and IM Motors have also officially announced that they will launch new fuel-electric hybrid models as soon as 2025.

In the blink of an eye, brands that adhere to pure electric vehicles have become a minority in the automotive market.

02

Extended-range hybrids rise, while single-speed DHT hybrids decline

Amid this wave of embracing fuel tanks, there are differences in technological approaches - extended-range hybrids with long endurance that significantly reduce range anxiety and offer a driving experience close to that of pure electric vehicles, and single-speed DHT hybrids that can compress costs to the extreme, resulting in shocking price points.

Although extended-range new models with a pure electric range of over 400 kilometers have not yet appeared at the Guangzhou Auto Show, Geely's Galaxy Starship 7, which uses single-speed DHT hybrid technology and is priced just over 100,000 yuan, has already booked the center stage of this year's auto show.

Galaxy Starship 7 exhibit at the 2024 Guangzhou Auto Show

DHT refers to a hybrid-specific transmission, which can be broadly classified into single-speed and multi-speed types based on the number of gears. In the field of single-speed DHT, BYD is a representative, with the Qin PLUS priced at 79,800 yuan fully demonstrating the advantages of single-speed technology.

Previously, Geely was a supporter of multi-speed DHT. However, with the Geely Galaxy Starship 7, it has embraced the single-speed approach, pricing this SUV lower than its biggest competitor, the BYD Song PLUS.

"Single-speed DHT vehicles are cheaper, have a simple structure, and lower maintenance costs. The downside is that they have a lower top speed and may struggle in scenarios requiring high power, such as climbing steep hills. Multi-speed DHT vehicles can shift gears and generally offer more reliable power, but at a higher cost for purchase and maintenance. In the current price-competitive environment, the market is unlikely to accept this," an engineer from a new energy vehicle company told YuanMeiHui on November 13.

According to YuanMeiHui, in addition to Geely Galaxy, Chery and SAIC-GM-Wuling will also showcase their single-speed DHT technologies and new models at this year's Guangzhou Auto Show. Affordable pricing will be a common feature.

In contrast, extended-range hybrids, with increasingly larger batteries and the popularization of dedicated extended-range engines, will compete more fiercely with pure electric vehicles in the mid-to-high-end new energy market by 2025.

As Professor Zhu Xichan from Tongji University and a specially appointed expert of the Society of Automotive Engineers of China said, when the battery capacity reaches 40-50kWh, it is the optimal state for extended-range hybrid vehicles. Coupled with the second-generation range extender specifically optimized for combustion efficiency and NVH, it can well satisfy users' desire to have both pure electric driving and range anxiety alleviation.

03

The first batch of extended-range vehicle companies start to 'reverse course'

However, while most automakers are rushing to enter the extended-range and plug-in hybrid markets, Li Auto, which was the first to enter this sector, and its "little fan" NIO, are contemplating how to better enter the pure electric market.

At this year's Guangzhou Auto Show, Li Auto has not yet showcased its revamped i-series pure electric vehicles, but this will undoubtedly be a top priority for the coming year. NIO, on the other hand, will bring its highlight of next year - the first model of the B-series, the B10. Surprisingly, there are reports that this model will prioritize the pure electric version for the domestic market.

It is worth mentioning that, in addition to new vehicles, Li Auto has made the construction of charging piles one of its top priorities this year. Sun Guangmin, Vice President of Li Auto's Charging Network, expressed confidence in achieving the goal of opening 2,000 Li Auto Supercharger stations within the year during a recent media interview.

By "reversing course" to focus on pure electric vehicles, Li Auto and NIO clearly believe that pure electric vehicles will remain the most important entry ticket in the future new energy market. Considering the cutting-edge battery technology, this decision is quite reasonable.

Recently, senior car reviewer Yan Yupeng posted on social media that domestic leading battery companies are making faster-than-expected progress in solid-state battery research and are expected to be widely used in the next two years. By then, with the high energy density of solid-state batteries, it will no longer be a dream for pure electric vehicles to achieve an additional range of 1,000 kilometers or more on a single charge. Extended-range and hybrid vehicles will become less effective in addressing range anxiety for pure electric vehicles.

Of course, there are also voices in the industry that consider the above expectations for solid-state batteries too idealistic, as solid-state batteries are currently plagued by high costs, short cycle life, and poor charging performance. However, in the long run, the continuous development and progress of battery technology is a general trend, and the possibility of this should not be prematurely dismissed.

In fact, extended-range and plug-in hybrids should not be opposed to pure electric vehicles.

From the popular topic of "Should Li Auto and BYD extended-range/plug-in hybrid owners charge on highways during holidays?" it can be seen that pure electric driving is also a rigid demand for users who are unwilling to give up fuel tanks. However, at the same time, pure electric vehicles are limited by weather and charging conditions, and range anxiety remains their biggest pain point to date.

If one must compare the two, it is like debating whether sweet tofu pudding or salty tofu pudding tastes better - it all depends on personal preferences and needs.

Rather than competing with each other, it is crucial to let consumers clearly understand the "sweet and salty" aspects of extended-range/plug-in hybrids and pure electric vehicles, make the right choice, and be willing to recommend and promote them to their friends and family. This is the true and perfect closed loop.

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