A deeper understanding of the transformation of the automotive industry
Produced by: Electric Planet
The Chinese automobile industry in March has a color of continuity and progress: various brands released their fourth quarter and full-year financial reports for 2024, and the preheating and launch of new products and new technologies were also carried out simultaneously.
The string of survival and competition has always been taut, especially in China’s new energy vehicle industry which has entered the knockout stage. Internal adjustments to adapt to competition have become more frequent. Li Bin, who has his own set of principles in the eyes of outsiders, has begun to reflect on Weilai’s operations, and a number of adjustments have been announced through various channels.
NIO, which relies on high-end products, is feeling a sense of crisis, perhaps also due to the impact of multiple brands planning to release high-end models this year. When people gather, the fight for the right to speak will naturally arise.
In March, when high-end models appeared frequently, in addition to comparing who was bigger and who was smarter, the chassis officially entered the scope of discussion of new energy high-end models. Topics such as the air supply system of the air suspension and the necessity of installing active suspension on the car were brought up.
Just as China’s new energy vehicle public opinion field is dominated by high-end models, Tesla, as a pioneer of new energy high-end models, has encountered boycotts in the European and American markets due to Musk’s initiatives outside of automobiles. Its sales have been affected and public opinion storms have continued.
Just as people were discussing whether NIO and Tesla could turn the tide and which brand of new energy high-end models was better, a serious accident brought the automotive industry, which had been shouting “smart driving”, back to calm.
The new energy vehicle sector moved forward amid turbulence in March.
Weilai Reform
As Ledao’s delivery performance fell short of expectations, compared with the rapidly advancing Leapmotor, Xpeng, Xiaomi and others, NIO, which has slightly slowed down, was caught in a whirlpool of public opinion. The official statement that its business conditions were good and normal was also drowned out by doubts.
NIO can always be found in the comments of the monthly post “Who will be the next new force to fall?”, and some supporters have also begun calling on NIO to make changes.
The public opinion is concerned about NIO’s operating conditions, approaching a “dangerous moment” in 2019, and it seems that NIO will collapse tomorrow. Opinions from outside are so sharp that Li Bin and NIO, who are in the game, must make a statement.
On March 10, an article titled “NIO is setting off a storm of change: every penny invested must have an impact” was published, elaborating on NIO’s measures through multiple rounds of internal meetings to promote the implementation of the CBU operating mechanism, Li Bin’s direct management of the supply chain, and streamlining of the organization and personnel.
In the words of “a person close to NIO’s management” in the article, “the new mechanism requires that every penny invested must have an impact,” which echoes what Li Bin mentioned in his 2024 New Year’s letter: “build a strong base and fight a stupid battle” and “make good use of every penny of investors and not waste a single kilowatt-hour of electricity.”
From 2024 to 2025, Li Bin’s many internal statements have all called on NIO to “move from luxury to frugality.”
The reason why this adjustment caused such a huge response is that, on the one hand, the voices of pessimism from the outside world almost drowned out NIO, and on the other hand, judging from the measures, it touched upon the underlying problem of NIO’s “lavish spending” as believed by the outside world. Voices of “it should have been done long ago” flooded the comment section of this report.
Even though a plan was made in 2024, NIO’s net loss in 2024 still expanded further.
From a results-oriented perspective, NIO’s 2024 financial report is still not good: revenue of 65.73 billion yuan, an increase of 18.2% year-on-year, and a net loss of 22.4 billion yuan, an increase of 11.6% year-on-year.
The increase in losses came from the R&D investment of 13.037 billion yuan, which accounted for nearly 20% of the revenue, the asset-heavy task of building battery swap stations, and more importantly, the large amount of investment required for the initial investment and construction of the Ledao and Firefly brands.
The situation where current liabilities (62.3 billion yuan) are greater than current assets (61.9 billion yuan) prompted it to state in its financial report that it believes its financial resources will be sufficient to support the normal operation of its daily business in the next 12 months. Perhaps this is where the urgency for internal change at NIO comes from.
In addition to the above adjustments, as a major item of expenditure, Ledao channel has also begun to try to integrate with NIO channel to share multiple resources such as delivery, after-sales, finance and personnel. On April 2, Ai Tiecheng resigned as the president of Ledao, and the changes in Ledao structure also reflect the internal changes of NIO.
NIO failed to fulfill the goal set in 2022 of “achieving full-year profitability in 2024”, but at the 2024 earnings conference, it brought forward the profitability target of 2026 in the tenth anniversary internal letter to Q4 2025.
Whether NIO can achieve its Q4 profit target remains a question mark.
The challenges it will face in 2025 will not only come from its internal adjustment pace, but also from a number of competitors pouring into the high-end new energy vehicle market.
Xiaomi in turmoil
On March 29, a Xiaomi SU7 crashed into a concrete guardrail and caught fire while driving at high speed, killing three people in the car.
The heat of this accident was completely ignited on March 31. A spokesperson for Xiaomi issued a statement on the situation, and Lei Jun posted a blog in response that evening.
The accident is still under investigation and the matter has not yet been concluded.
This is the most serious public opinion storm Xiaomi SU7 has encountered since its launch a year ago. Before the facts are investigated clearly, the significance of many discussions surrounding the incident still needs to be questioned.
So far, the most industry and socially significant discussion about this incident is the issue of restraint in the promotion of intelligent driving.
In an article in which Xiaomi Auto officially answered questions from netizens, it was mentioned that the vehicle involved in the accident was the Xiaomi SU7 standard version. The AEB function of this version “is similar to the AEB function of the same configuration in the industry and currently does not respond to obstacles such as cones, water barriers, stones, and animals.”
People’s discussion on the promotion of intelligent driving focuses on the fact that whether it is Xiaomi or other new energy vehicle companies, when they promote intelligent driving, they often focus on, or even only promote the high-end intelligent driving functions of the vehicles, and lack emphasis on the upper limit of the intelligent driving capabilities of mid- and low-end models.
For users who have been paying attention to intelligent driving for a long time and practitioners in related industries, most people have their own standard for the ability differences in their hearts and are relatively cautious when using intelligent driving functions.
But for ordinary consumers, what they see more is the intelligent driving capabilities of higher-end versions of cars as exaggerated by car companies at press conferences and in official publicity. There is confusion in the understanding of the intelligent driving capabilities among different versions of cars, and they can easily mistakenly believe that the entire series is equipped with them.
Ignorance is bliss, and due to cognitive errors, people tend to have too much trust in intelligent driving systems.
In fact, except for Tesla, which spent tens of thousands of dollars to purchase FSD capabilities, Xiaopeng’s P7+ and later models released so far, and NIO’s entire series of models, there is no difference in intelligent driving capabilities between versions. The intelligent driving capabilities of other brands of models are divided into high and low capabilities.
This accident involving Xiaomi has brought the topic of the version differences between smart driving promotions and actual applications into the public eye. After this vicious incident, will the smart driving promotions of various brands return to restraint?
The answer has not yet been determined, but at least one thing is certain: the progress of industry and society should not come at the cost of life.
Chinese luxury cars, a battle for suspension
By 2025, China’s new energy vehicle market will launch at least 20 high-end models. This market, which was previously occupied by BBA, is now entering a red ocean as Ideal L9 and Wenjie M9 have carved out a niche.
After meeting the basic needs for endurance and energy replenishment with battery swapping and large-battery extended-range models, this market has begun to pursue a deeper third-space experience.
As the improvement of cabin comfort approaches the limit of current imagination, smart connected vehicles as an attribute of the vehicle itself have once again been valued, especially the chassis, which is the technological moat of BBA in the era of fuel vehicles.
The chassis is a unique label provided by high-end models and brands. In addition, lightweight technologies such as aluminum alloy or carbon fiber subframes raise the cost threshold, becoming a key role in the product’s foothold in the high-end market and price.
The chassis battle for high-end models in 2025 started with the tire blowout test performance of NIO ET9 and ZUNJIE S800 in February, and escalated into a melee in March – Yangwang U7 joined the war.
The Yangwang U7 equipped with Yunnian-Z has mass-produced technology for fully electric vertical control. At the launch conference, it demonstrated its ability to respond quickly and stabilize the vehicle body even when both tires burst at a speed of 160km/h.
The source of this debate was that Li Bin and Yu Chengdong agreed at the Huizhou Business Conference on March 22 to try each other’s NIO ET9 and Zunjie S800 and give “real reviews”.
The tension was dispelled by the smiling agreement between executives, but in March when high-end models were unveiled, pre-sold and even launched, the melee was certainly not limited to these three ultra-luxury models.
In the promotion of many high-end SUV products, car companies like to use videos such as sudden braking and sharp turns on icy and snowy roads to showcase the strength of the suspension and performance. They also use scenes such as champagne towers and flying slopes to show the control of the air suspension on the stability of the vehicle body in a relatively gentle way.
The Denza N9, equipped with BYD Yunnian-A intelligent air suspension + CDC, collaborates with Yi Sanfang to make the control more flexible while achieving a compass turn with a turning radius of 4.65 meters. It also maintains body stability in a straight-line extreme tire burst test at a speed of 180km/h, demonstrating its chassis strength.
As for whether the rear chassis system is five-link or multi-link, single-cavity air suspension or double-cavity air suspension, it is up to the individual and varies according to the positioning and price of the vehicle model, and rarely causes controversy.
But in this round of high-end new energy vehicle market, a more detailed discussion has emerged – which option is better, the open or closed air suspension air supply system?
In a video explaining why all Ideal models use open air suspension, Lao Tang Ge said that open systems are noisier than closed systems, which has been questioned by many.
Some people believe that the closed type is resistant to freezing, takes up less space, has more precise control direction and makes less noise, so the closed type is a better choice. The relatively affordable open type is not as good as the closed type in terms of stability and space saving.
It was difficult to determine who was right or wrong in this debate, but the beneficiary of this debate, which originally centered on Huawei and Ideal, seemed to be Xiaopeng – users were curious about Xiaopeng’s suspension system, and Xiaopeng also took the opportunity to publicize their tuning of the G9 to make it more comfortable.
A more neutral point of view is that no matter open or closed, the premise of single-cavity or double-cavity air suspension cannot be ignored, and it is pointed out that the open type is suitable for comfort and daily use, while models that have off-road and travel to cold areas – especially SUVs – are more suitable for the open type. The best combination is the closed double-cavity air suspension.
More importantly, it is the tuning of the chassis.
The era of intelligence has injected new impetus into the chassis, weakened the mechanical tuning advantages of traditional luxury brands, and used algorithm computing power to create a personalized, upgradeable and quantifiable moat, but tuning is still the core of vehicle driving performance.
Therefore, we can see that today, as China’s new energy vehicle brands are thriving, chassis engineers from BBA are still sought after. Even Leapmotor, which has a close relationship with Maserati, has occasionally reported that Maserati’s chassis R&D team has come to Leapmotor’s headquarters for guidance.
In the fierce competition in China’s high-end new energy market, who can widen the gap by improving the chassis?
Musk’s stubbornness
Musk spent March in a state of contradiction.
Due to his close ties with Trump and controversial remarks on social media, Musk has encountered an unprecedented “crisis of trust” in Europe and the United States.
From less sophisticated car owners who distanced themselves from Musk’s remarks by putting badges on their cars, to Tesla owners “opening the box” and actions against Tesla and Musk erupting in various places, this is almost one of the most difficult moments in public opinion since Tesla was founded.
People are genuinely opposed to Musk, and this is reflected in sales: in January and February this year, its sales in the EU were almost halved, and its market share fell to 1.1%. In March, Tesla’s sales data in various countries also fell by more than 35%.
Except for the Chinese market, Tesla is not doing well in the European and American markets, with global deliveries in the first quarter falling 13% year-on-year.
Before announcing his resignation from the Government Efficiency Department on April 1, Musk took a tough stance on opposition activities at X and seemed very confident in his choices and the justice of them.
Musk’s confidence may be the rumored $25,000 affordable car model, the operation of driverless cars, Optimus and other products. He believes that he can create another hit like Model Y.
But it is obvious that at this stage Musk’s excessive involvement in politics has already had a real negative impact on Tesla, and stopping losses in time may be Musk’s most sensible choice.
NIO and Tesla, the two brands that originally represented high-end new energy vehicles, are facing a dilemma that is very characteristic of their founders. However, the turn has already begun. How will they consolidate their position in this turbulent world and the Chinese market where high-end new energy vehicles are emerging frequently?
We will see what happens in 2025.
(over)