The "Five Little Dragons" of car manufacturing bravely enter the finals

Author | Zhou Zhiyu

Editor | Zhang Xiaoling

The year 2024 is significant for China's new energy vehicle market, which is undergoing dramatic changes. The once-popular dark horses have fallen one after another, while the "Five Little Dragons" have emerged from the elimination rounds and entered the finals.

Since the beginning of this year, Huawei's Aito and Li Auto have regained momentum after experiencing short-term fluctuations, gradually stabilizing in the mid-to-high-end market; Leapmotor and ZEEKR have launched aggressive offensives in the second half of the year, with sales continuing to rise; although Xiaomi Auto arrived a bit late, it delivered over 130,000 vehicles in just 8 months, creating a miracle for new car-making forces.

Behind the "Five Little Dragons," XPeng, which has frequently released blockbuster models in the second half of the year, along with several other car manufacturers, is also accelerating its pursuit. There is no doubt that the elimination rounds of China's new energy vehicles have entered the finals, leaving little opportunity for latecomers.

In the upcoming market, as players engage in fierce competition in niche markets, the competition will only become more brutal. After the sands have settled, the future landscape of industry giants is gradually taking shape.

Sprint

For China's new energy vehicles, 2024 is a year of great significance, marking the year when Chinese self-owned brands truly take center stage.

According to data from the Passenger Car Association, in July this year, the market share of new energy vehicle sales exceeded 50% for the first time, replacing traditional fuel vehicles as the market mainstream. This momentum has continued over the past four months, with monthly sales of new energy vehicles stabilizing above one million units.

At the beginning of 2024, this was something that no one in the industry dared to imagine. At that time, the most optimistic forecast was that the market share of new energy vehicles would approach 50% by the end of 2024. With the increase in new energy penetration, Chinese self-owned brands have achieved leapfrog development with a market share exceeding 60%.

Among them, BYD has taken the lead, while the "Five Little Dragons" maintain a high growth trend and have surged forward.

As of the end of November, Leapmotor has achieved cumulative sales of 251,200 vehicles, completing its annual sales target for 2024 ahead of schedule, with monthly sales exceeding 40,000 units, and annual sales expected to approach 300,000 units; Li Auto's cumulative delivery in the first 11 months reached 442,000 vehicles, just a step away from the annual sales target of 500,000 units; ZEEKR's performance is also commendable, with cumulative sales exceeding 194,900 vehicles, and the combined ZEEKR Technology Group after merging with Lynk & Co is expected to exceed 500,000 units for the year; Huawei's Aito has cumulative sales exceeding 350,000 vehicles, especially since the launch of the Aito M9, which has accumulated orders exceeding 200,000 units, creating a miracle for Chinese brands in the luxury car market.

Xiaomi Auto is an anomaly. Since starting its first batch of deliveries on April 3 of this year, relying on the Xiaomi SU 7, Xiaomi Auto has delivered over 130,000 vehicles in 8 months, setting a new record for new brand deliveries.

The key to the emergence of the "Five Little Dragons" is their ability to offer products with better "quality-price ratio." By providing the most recognizable products in their respective segments and optimizing costs through strengthened supply chain advantages.

Li Auto focuses on family scenarios, while Aito raises the banner of intelligence, which is a "dimensionality reduction attack" on traditional luxury cars like BBA. At the same time, they rely on increased commonality in components to optimize production efficiency In the past two years, Li Auto has focused on learning integrated supply chain management from Huawei to rebuild its supply chain system. This has allowed it to be among the first to emerge among the new car-making forces.

Leapmotor and ZEEKR are similar. One of Leapmotor's main strategies this year is to benchmark its products against Li Auto, and then achieve component universality and reduce production costs through core technology research and development and full integration of components. As Leapmotor Chairman Zhu Jiangming puts it, they aim to create products that are "good and not expensive."

Leapmotor has also further enhanced its product iteration through platform capabilities. For example, the Leapmotor C16 was initially estimated to be launched in 2026, but through platform capabilities and component universality, it was ultimately launched more than a year ahead of schedule.

ZEEKR, as the culmination of Geely's new energy technology, has always represented domestic performance electric vehicles. It is also looking for further opportunities to enhance economies of scale. In mid-November, ZEEKR merged with Lynk & Co, hoping to strengthen synergies through the integration of smart technology, after-sales system construction, channel development, and other middle and back-end processes.

Xiaomi Auto relies on the technological ecosystem accumulated by Xiaomi in the consumer electronics field, bringing more possibilities for automotive intelligence. Its supply chain efficiency is higher than that of other new forces at the initial stage, leading to a decrease in costs. At the same time, with a user-oriented mindset and the unmatched marketing offensive of Xiaomi Group Chairman Lei Jun, Xiaomi Auto has brought unprecedented "emotional value" to the automotive circle.

Overall, continuous improvement in technological advantages, cost control capabilities, and product upgrades have allowed the "Five Little Dragons" to stand out in the fiercely competitive landscape of 2024.

Moreover, their scale advantages are expected to continue next year. According to the current sales plans for 2025 provided by the "Five Little Dragons," except for Xiaomi Auto, which is still ramping up production capacity, the other four car companies have a minimum guarantee of 500,000 vehicles, with some going up to 700,000 or even higher. This also means that they will have a higher market position in China's new energy vehicle market.

Race

In the blink of an eye, ten years have passed since 2014, which was called the "Year of New Energy Vehicles in China."

After experiencing the initial capital bubble and a peak of hundreds of new energy brands, China's new energy vehicles have continued to clear out. The elimination competition has now entered a more brutal final stage.

NIO Chairman Li Bin emphasized that the Chinese automotive industry has now entered "the most intense and brutal stage, with competition at a higher dimension." If car companies do not reach a certain scale in terms of size and operational quality in two to three years, it will be difficult for them to participate in subsequent competition.

Industry leaders, including Richard Yu, Chairman of Huawei's Car BU, have repeatedly emphasized that only by becoming a giant can automotive companies survive. Lei Jun also has a clear goal, which is for Xiaomi to strive to become one of the top five car manufacturers in the world.

The reality is that even the outstanding "Five Little Dragons" in 2024 need to accelerate their pace to strive to surpass the one million sales mark and move towards the dream of becoming global automotive giants.

The market elimination competition will intensify. As of now, there are only 14 new energy vehicle brands with an average monthly sales of over 10,000 units, one of which is Tesla As market competition intensifies, whether annual sales can exceed 500,000 vehicles and achieve profitability under accounting standards will be an important assessment indicator. Players who fail to achieve these goals in the next two to three years will be on the edge of danger.

Gong Min, head of UBS China's automotive industry research, also stated to Wall Street Insights that during the process of increasing electric vehicle penetration and market share of domestic brands, the integration of China's automotive industry has actually begun. For new forces, market share will increase, but they also need to balance the relationship between losses and growth.

Moreover, as car companies, including the "Five Little Dragons," gradually grow into giants with significant positions in the industry chain, they also need to find a direction for future development representing Chinese automobiles.

The supply chain will still be a key focus for them. An automotive industry analyst pointed out that with the advancement of China's new energy vehicle technology, including batteries and laser radar, new suppliers continue to emerge in the industry. However, whether car companies and suppliers can form a "community of shared destiny" under the new industry landscape to drive the transformation and upgrading of the industry chain, rather than simply competing on costs, will be crucial for the Chinese automotive industry to move towards a broader stage.

At the same time, as market competition enters the intelligent second half, Chinese car companies have begun exploring the field of intelligence, which has entered uncharted territory. This year's market competition focus is on the comprehensive rollout of NOA in driverless cities, with "end-to-end" large models becoming the key competition point for car companies' technological finals.

ZEEKR CEO An Conghui revealed that ZEEKR plans to achieve mass production models with L3+ capabilities by 2025. Li Xiang, chairman of Li Auto, boldly stated that AI means everything to Li Auto, and smart cars are just one of the carriers for him to realize his AI vision.

Recently, Lei Jun has even hired "95 post-genius girl" Luo Fuli, one of the key developers of DeepSeek-V2, with a salary of tens of millions, and further increased capital expenditure on computing resources, indicating that he is fully embracing AI large models with practical actions.

It can be seen that AI large models are disrupting the automotive industry, providing more possibilities for this century-old manufacturing industry to transform into an AI technology giant. In this process, Chinese car companies will play an important leading role.

However, for any industry to truly become globally leading, it cannot only look at scale and market share; leading enterprises must play the role of a locomotive. This requires companies like BYD and the "Five Little Dragons" to work together on the road to becoming giants, taking on the responsibility to lead Chinese automobiles towards broader horizons.

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