Two years and 39 new energy vehicles, is Chery taking too big of a step in the field of new energy?
Is Chery's Leap into New Energy Cars Too Ambitious? A Look at Two Years and 39 New Energy Vehicles
【PhoneAuto】In the era of traditional fuel vehicles, domestic brand car companies in China have always been overshadowed by joint-venture brands due to their late start and weak foundation compared to developed countries in Europe and America. Many people think of “poor quality” when they think of domestic cars. However, with the rapid development of the domestic automotive industry, domestic brand models have gradually gained the favor of domestic consumers with their cost-effectiveness. Especially with the advent of the new energy vehicle era, it has given domestic brands an opportunity to overtake in the bend of the road.
Among the many domestic brands, BYD, which was the first to layout the new energy industry, is undoubtedly the most successful in recent years. With its early technological accumulation in the new energy field, BYD has grown rapidly in the new energy vehicle industry and has become the leader in domestic and even global new energy vehicles.
Compared to BYD, which directly stopped the production of conventional fuel vehicles, although other domestic car companies do not have such confidence, they have also begun to enter the new energy market by launching new brands. Whether it’s AiE’an under Guangzhou Automobile Group, JiKe under Geely, ShenLan under Changan, they have achieved good results in the current new energy market. Even Great Wall, which is known for its SUVs, has enabled many of its SUVs to use green plates through Hi4 hybrid technology. However, Chery, which is also a well-known brand in the era of traditional fuel vehicles, seems to have fallen behind.
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However, at the 2023 Chery Technology Day on October 16th, Chery finally brought an ambitious plan. Dr. Gao Xinhua, Executive Vice President of Chery Automobile Co., Ltd. and Dean of the Automobile Engineering Technology R&D Institute, announced Chery’s new vehicle plan. He stated that Chery Automobile will be fully focused on new energy and global intelligence. By the fourth quarter of 2023, Chery will launch 5 super hybrid models and 4 high-end electric vehicle models based on the E0X platform. He also stated that Chery will launch a total of 39 new energy vehicle models, including 24 super hybrid models and 15 high-end electric vehicle models based on the E0X platform, within 2 years.
Dr. Gao Xinhua introduces Chery’s new vehicle plan
It can be seen that Chery has long realized the current problems and has decided to take a big step into the new energy era.
In fact, it is already an open secret that Chery has encountered setbacks in the field of new energy vehicles, which can also be seen from the types of new vehicles Chery has recently released and the announcement of sales performance.
First, in terms of new car releases. Unlike other companies that have clearly increased their focus on new energy vehicle models, Chery is still “going all-in” on conventional fuel vehicles. Among the high-profile models they have launched this year, whether it’s the flagship SUV, Tiggo 9, the newly added 2.0T version of Arrizo 8, or the SUV model, Exeed TXL, which is positioned as a light off-road vehicle, all of them are fuel-based cars. This is definitely not something to be proud of for Chery, considering we are already in the era of a 36.9% penetration rate for new energy vehicles in 2023.
Chery Tiggo 9
In addition, in comparison to the frequency of new fuel-based car releases, Chery’s speed in launching new energy vehicles can only be described as “ultimate torture” for consumers who are interested in them. As early as the Shanghai Auto Show in April this year, Chery showcased its strong lineup that included two new cars from its high-end brand, Exeed, the third generation of its hybrid technology CDM, the first extended-range model, REEV, the globalized super comfortable and high-performance electric platform, E0X, and the super high-performance hybrid CDM. At that time, many people thought that Chery was really going to make a big splash in the field of new energy vehicles.
ARRIZO Star concept car at the Shanghai Auto Show
However, half a year has passed, and many competing models that were showcased later than the aforementioned models have already started selling, while Chery’s new cars showcased at the Shanghai Auto Show are still not officially on sale. We can only occasionally see news like “Spy photos of XX Chery new energy vehicle on road test exposed.” Chi Zhi, a spokesman for Chery, said that some models will be launched in the fourth quarter. Even the recently officially released fuel-based Exeed TXL was jokingly referred to as “Inkstigator” by car enthusiasts due to the long gap between its unveiling and launch.
On the other hand, from the sales posters released by Chery, we can also see their lack of confidence in the field of new energy vehicles. Unlike other car manufacturers who like to list the monthly sales of new energy models in their sales reports or release separate reports for their new energy brands, Chery has not published any sales figures for new energy vehicles in their sales reports for some time. In its recently announced sales performance for September, Chery sold a total of 190,080 vehicles, an increase of 30.7% compared to the same period last year, with sales exceeding 150,000 units for three consecutive months.
Chery further listed the sales performance of its various models. In September, Chery sold 136,041 vehicles, an increase of 20.4% compared to the same period last year; Exeed brand sold 15,199 vehicles, an increase of 93.9% compared to the same period last year; and Exeed brand sold 32,129 vehicles in September, an increase of 68.9% compared to the same period last year.
Chery’s sales performance in September
However, Chery did not disclose the sales figures for Chery New Energy. According to the data released by China Passenger Car Association, it can be inferred that Chery’s new energy sales in September were probably only over 10,000 units, accounting for only about 5-6% of the total, which is very low. Chery’s new energy models, such as the QQ Ice Cream and the Little Ant, have gradually lost attention in the market, which may be the reason why Chery has been reluctant to disclose its new energy sales figures.
At the 2023 Chery Technology DAY, Yin Tongyue, Chairman of Chery Holding Group, said that Chery was “early to rise, but late to gather” in the field of new energy vehicles in recent years, which summarizes the problems Chery has faced in the field of new energy. However, he also expressed that Chery is now ready to surpass other competitors and has made preparations in the fields of new energy and intelligent connected vehicles.
Yin Tongyue stated that through resource cooperation and collaboration, Chery is very confident that it will no longer be as polite as this year in terms of ranking in the new energy vehicle industry, and it will definitely enter a leading position nationwide. Among these efforts, Chery’s partnership with Huawei to launch the Zhijie series of models has gained a high level of attention.
Yin Tongyue, Chairman of Chery Holding Group
In August of this year, Yu Chengdong, the then CEO of Huawei’s Intelligent Automotive Solution Business Unit, revealed on social media the official image of Huawei’s first pure electric coupe, which is the first model under the Zhijie brand and is officially named Zhijie S7. In September, Yu Chengdong announced with great fanfare that the Zhijie S7 will be officially launched in November. In addition to featuring Huawei’s advanced ADS 2.0 intelligent driving system, the Zhijie S7 will also become the first model equipped with the HarmonyOS 4 in-car system.
Official image of Zhijie S7
Perhaps inspired by Seres and Huawei’s collaboration in launching the Wuque model, Chery also wants to work with Huawei to gain higher popularity for its new energy models. Compared to Seres, Chery obviously has a stronger brand appeal in the automobile manufacturing industry. With Chery’s manufacturing foundation and Huawei’s support in electrification and intelligence, the Zhijie series of models is indeed worth looking forward to.
However, Chery’s path to electrification will certainly face various obstacles. Yin Tongyue said that Chery will never rely on losses to achieve sales in new energy vehicles, which does not seem to fit the current environment of the domestic new energy vehicle industry. Due to intense competition, many new players in the industry, including NIO, Xiaopeng, and Leapmotor, are facing huge losses. Only a few industry leaders like BYD and Li Auto have achieved profitability, but they also experienced losses in the early stages of entering the new energy field. As a latecomer, Chery cannot compromise on price if it wants to develop new energy without incurring losses. Therefore, how Chery, as a “new player” in new energy, can convince consumers to pay for its products is also a problem that needs to be solved.
However, working with Huawei is not a magic solution. The cooperation between Huawei and Sethis has also had some effects on Question界. At the beginning, Question界 received a lot of attention with the support of Huawei. The initial sales performance was also good. However, as competition intensified, sales of several Question界 models suffered. It was not until recently, with the release of the new Question界 M7 at a significantly reduced price, that it regained its former glory.
The new Question界 M7 is selling well.
Additionally, there are concerns from internet users regarding the safety of Chery’s new cars. With the release of 39 new car models within two years, how reliable are these vehicles in terms of safety testing? However, there is no need to worry too much about this. One of the reasons why Chery’s new concept cars haven’t been mass produced and launched is that they need to undergo various tests to ensure the reliability and safety of the related platforms. Once the platform reliability is guaranteed, there shouldn’t be significant issues with the reliability of the many models built on the new platform.
Overall, Chery’s ambitious move to bring so many new products within two years is aimed at catching up with the fast development of new energy vehicles. However, the previous domestic new energy vehicle company that tried to introduce so many new cars in a short period, Hengchi Auto, has already become somewhat stagnant. In the era of platform-based manufacturing, it is not too difficult to release dozens of new cars within two years. The challenge lies in achieving good sales results. It is still unknown whether Chery can gain a portion of the market share and be favored by consumers while remaining profitable.
Chery cars in the overseas market.
However, even if Chery’s bold steps this time do not achieve the desired results, there is no need to be overly concerned. After all, Chery has had good sales performance in the vast overseas market with their fuel cars. But looking ahead, if they really fall behind in China’s new energy transformation, their future development in the domestic market might be quite difficult.
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