In this currency feast, a new round of car building movement swept.
Is this the carnival of capital or the auto revolution?
This paper simply analyzes this round of car building movement from the perspective of economics.
The logic of this paper
1、 Energy and efficiency
2、 Technology and capital
3、 Giants and Revolution
Energy and efficiency
There is no distinction between old and new energy sources, only efficiency.
More than one hundred years ago, there were four kinds of cars running on the roads of European cities. They were carriages, steam locomotives, electric cars and gas locomotives. From the market share point of view, the four can be described as equal. Who won in the end?
In factories, the efficiency advantage of electric power is quite obvious; in the fields of aerospace and military industry, oil and gas are still reliable power for aircraft, rockets and ships; in the field of rail cars, electric power is basically used; in the field of automobiles, electric vehicles are now trying to challenge the status of diesel locomotives.
In the past, the success of gas-fired locomotives was not the use of new energy, but the higher efficiency of oil and gas energy. The key is that engineers such as Daimler, diesel and Wankel constantly improve the internal combustion engine and continuously improve the efficiency of energy conversion.
Economics does not support the idea of new energy or old energy. In this round of car making feast, we should pay attention to energy efficiency. Besides power, safety, stability, energy conservation and resource availability are all part of energy efficiency.
Solar energy is considered as a new energy, but it is the oldest natural energy, far earlier than human beings. However, the efficiency of human use of solar energy has been low. Now, we talk about solar energy again because of the progress of photovoltaic technology. Photovoltaic improves the efficiency of converting solar energy into electricity.
Coal was first discovered more than 2000 years ago, but its value was not developed until the appearance of steam locomotive. Nuclear energy is now an efficient energy, but its safety has not been solved, which is limited to power generation, aircraft carrier power, etc. After the Fukushima nuclear accident, Japan strategically abandoned its nuclear power and turned to hydrogen fuel. Hydrogen fuel is a kind of clean energy, but the cost of hydrogen vehicle is not low at present.
Therefore, there are many energy sources in front of human beings, such as wind energy, solar energy, animal power, oil, coal, natural gas, electric energy, hydrogen energy, ethanol, methanol and so on.
Low carbon should not be the only direction to be considered. The only indicator to be considered should be efficiency. It is not suitable to use the energy technology that the industrial policy bet on. Even in the battery field, there are lithium batteries, manganese zinc batteries, lead-acid batteries, nickel hydrogen batteries, etc. There are great differences in density, safety and manufacturing cost between them. The best way is to let enterprises compete in their respective markets, with dreams as horses, profits as smell, technology as strength, and run different tracks and advantages.
At present, there is a saying in the market that China's development of new energy vehicles is a curve overtaking. Which turn? Engine, internal combustion engine to be exact. Now that the internal combustion engine technology is mastered by Japan, the United States and other countries, can China make a detour with electricity?
In the field of automobile, let capital explore freely, looking for motors, internal combustion engines, electric energy conversion technology and shale gas technology. The question is whether oil and gas resources have peaked, and whether internal combustion engine technology has peaked?
The technology history of internal combustion engine and generator is similar, both of them are very mature. There are limits to technical track, but there is no limit to technical progress. For example, chips are getting smaller and smaller. At present, 7-nanometer chips can be developed, but there is always a limit. When the chip limit comes, other materials may be used, or thermal management and energy density may be improved to enhance the technical performance.
In economics, resources are assumed to be limited. The maximum allocation of limited resources depends on free market and technological progress. It is the technological progress of exploration and exploitation that enables oil and gas resources to support the world's huge industrial system. After entering the 21st century, the anxiety of crude oil shortage continues to heat up, and oil prices continue to rise. In July 2008, international oil prices peaked, rising from $19 a barrel in 2002 to $145 a barrel. China's new energy strategy is also put forward in this context.
However, after the financial crisis, oil prices fell. By February 2016, international oil prices had dropped to an all-time low of $27 a barrel. An important reason for the decline of oil price is that the shale gas revolution broke out in the United States, and the United States has achieved self-sufficiency in oil, changing from an original importing country to an exporting country.
Is shale gas technology important? At present, the total proven shale gas resources in the world are equivalent to the sum of CBM and tight sandstone gas resources, and equivalent to conventional natural gas reserves. China is also rich in shale gas. In other words, as long as shale gas technology advances, the adequacy ratio of oil and gas resources is still very high.
American oil companies are subject to the anti-monopoly law and dare not openly conspire with Saudi Arabia and Russia, so they can only rely on technology to suppress. This is the pressure of market and technology on the collusion of international oil power.
Oil resources are limited and not clean; power resources are also limited and not clean. Generally speaking, if half of the world's cars are replaced by electric vehicles, the demand for electricity will double, the consumption of coal and oil will also increase significantly, and nuclear power plants will also expand substantially. On the small side, the amount of cobalt used in lithium batteries is also limited. The domestic Tesla battery is lithium iron phosphate battery, which is characterized by good safety, low cost, low density and insufficient endurance. Ternary lithium battery has higher density and longer endurance, but its output is limited by the core material cobalt.
Cobalt is a rare metal. At present, the global proven cobalt resources are 25 million tons, the reserves are 6.88 million tons, and the annual mining amount is less than 150000 tons. New energy vehicles have pushed cobalt prices up more than 10 times in a few years. Why can't cobalt production keep up? The main reason is that the global cobalt resource allocation is not market-oriented. More than half of the world's Cobalt resources are distributed in Congo (DRC), and most of the cobalt in the international market is exported by this country. However, the constant war and political instability in the Democratic Republic of Congo cannot guarantee a stable market supply, let alone technological progress. In addition, Russia, Canada and Australia, which are relatively rich in cobalt ore, restrict the export of cobalt.
This is the bottleneck of lithium batteries. In recent years, in order to break through the bottleneck, teras gradually jumped to the nickel technology track. In the ternary lithium battery, the proportion of cobalt is reduced and the content of nickel is increased.
Oil used in internal combustion engines and nickel, cobalt and manganese in ternary lithium batteries are all limited resources, which need to improve allocation efficiency through free market and technological progress, such as shale gas technology and cobalt free high nickel technology route. Perhaps, technological breakthroughs in batteries are more imaginative than oil.
Capital and technology
The real opportunity for this round of car building is actually driverless.
Even if the effective battery life is increased to 1000 km, electric vehicles are no surprise compared with cars. Of course, this is not to deny the value of electric cars. If the effective battery life is raised to this level, and the safety and pollution problems can be solved, this is a great technological progress. Traditional automobile manufacturers have to face new challenges.
However, if that's all, this round of car building movement is not revolutionary, users just have one more choice. It is difficult to arouse the interest of users and capital. This round of car building movement should be the sword dance of electric vehicles, aiming at driverless.
The imaginative space of car making feast will be driverless in the future. However, driverless is the cutting edge of artificial intelligence. At present, no company, including Tesla, Google, apple and traditional automobile manufacturers, has mature and reliable technology. Some electric vehicle manufacturers, having nothing to do with driverless, also wear this hat to stir up in the capital market.
This round of car making feast is basically a capital feast, or rather a monetary feast.
In history, the eve of every technological revolution will attract a large number of capital, capital promotes technological innovation. Typically the railway revolution in the second half of the nineteenth Century, when the US stock market was mostly railway stocks, and many financial crises were triggered by the collapse of the railway investment bubble.
This time, perhaps more exaggerated than any other time in history. Since the financial crisis in 2008, the global currency has been over issued seriously, and a lot of capital has been circulating in the financial market. Especially in 2020, large-scale capital will gather in the property market of big cities, Maotai, bitcoin and global leading technology stocks, resulting in serious polarization in the capital market.
In January 2021, Evergrande motor obtained HK $26 billion in financing, and its shares soared, with a total market value of more than 600 billion. Evergrande has not landed a car, and its market value is close to three times that of its parent company, Evergrande group. At the same time, the market value of Tesla far exceeds that of Toyota, BYD far exceeds that of Volkswagen, and Weilai far exceeds that of Daimler. But the former's car sales and profits are far less than the latter.
Why do capital gather to build new forces?
In the year of the great epidemic, the currency was over issued, the asset prices and prices rose, the currency devalued, and the risk aversion of the global capital market rose sharply. Where can capital avoid risks? For example, the houses in the core area of big cities, global technology leading stocks and consumer leading stocks. It's like the melting of the Arctic glaciers, the rising of sea level, and the people taking refuge in the highest places. Even if the end of the world comes, the people in the highest place can get to the end. As long as the world is still there, they are still the most powerful. If you can bet on the future direction of technology, it will undoubtedly win in chaos.
Investing in the new forces of car building can enjoy the monetary dividend of new energy in the short term and the technological dividend of driverless driving in the long term.
The main purpose of new forces to manufacture electric vehicles instead of fuel vehicles is to reduce the difficulty of vehicle manufacturing, bypass the threshold of engine and reduce the difficulty of supply management in vehicle manufacturing. To a large extent, industrial policy also has this tendency, providing a lot of financial subsidies and credit support for electric vehicles. Beijing, Shanghai, Guangzhou and Shenzhen relax new energy licenses and encourage users to buy new energy vehicles. Biden government of the United States has launched a trillion yuan green new deal, which also heavily subsidizes new energy. Under the stimulation of subsidies, the short-term growth of efficiency promotes the stock price to soar.
Agglomerations tend to disintegrate as liquidity shrinks. If the Federal Reserve ends its easing cycle and turns to moderate tightening in the second half of 2021, the polarization of the capital market will be eased and more funds will return from new energy vehicle stocks to investment targets with short-term value support.
Supporting the new force of car building is the expectation of future driverless. This complex technology is composed of chips, operating systems, sensors, big data and artificial intelligence. Tesla's driverless is mainly assisted driving. How far is the real driverless from us is still unknown. That's the risk of investing in new car building forces.
Through the capital feast, we need to pay attention to the growth of automobile manufacturers in terms of driverless. The core technologies of traditional automobile manufacturers are vehicle manufacturing, engine and gearbox, while electric vehicles are vehicle manufacturing and battery technology. The core technology of driverless vehicle also needs chip, operating system, artificial intelligence and big data processing. The number of electronic control units will be greatly increased, and the number of vehicle code lines will reach hundreds of millions.
The difficulty of unmanned driving is the accumulation and intelligent processing of a large number of driving data. In this regard, Google is ahead. Google's driverless cars have accumulated a lot of driving data, causing 11 minor accidents in the past six years. The result is satisfactory. Apple launched 62 driverless test cars on California public roads in 2018.
Traditional automobile manufacturers also have the potential of big data accumulation, and the purpose of new car building forces to seize the track is also here, but their shortcomings in driverless technology are outstanding. By seizing the track, the new force hopes to cooperate with Baidu, Tencent and other technology companies. In China, Baidu's driverless technology is relatively advanced. Can baidu turn over with this round of car building?
Therefore, as for the investment in this round of car building movement, first, we should pay attention to the Fed's tightening policy in 2021; second, we should return to the car companies with hard core technology in time; third, this article is not used as any investment reference or suggestion.
Giants and Revolution
The 2007 iPhone redefined the mobile phone. Since then, Motorola, Nokia and other traditional mobile phone manufacturers have rapidly retreated, replaced by apple, Samsung, Huawei and Xiaomi.
However, the market is still looking forward to new car building forces, especially Tesla, apple and Google. I think the main reason is that traditional automobile manufacturers are too degenerate to meet the demands of the information age.
Although the traditional automobile manufacturers are still the representatives of advanced manufacturing in the industrial field, they are too degenerate and complacent compared with the ever-changing information technology. During the oil crisis in the 1970s, high oil prices forced cars to move towards fuel saving, and Japanese cars rose. Since then, the European and American markets have shrunk, and the European, American and Japanese automobile manufacturers have moved to emerging markets. Over the next three decades, they have fallen in emerging markets.
In emerging markets, first, there is no strong trade union pressure, labor is low, and cost pressure is low; second, there is no perfect automobile recall system, and consumer protection consciousness is weak, so the pressure from consumers is low; third, many administrative monopoly markets have built high automobile tariffs to protect these automobile manufacturers, which is lack of competitive pressure; fourth, global automobile manufacturers make profits by transferring technology, which is third rate The engine can make profits in the emerging monopoly market, and it is often reduced; fifth, the environmental protection standards in the emerging market are lower than those in Europe and the United States, and the automobile manufacturers lack the power to improve the internal combustion engine.
The global automobile manufacturers are the typical products of the unbalanced order of globalization. In my past articles (such as "the truth of America"), I have repeatedly cited global automobile manufacturers as examples, who are protected by this unfair order.
Today, Volkswagen, GM, Toyota and other giants, more than 50% of the market are in emerging markets. In particular, general motors, if there is no emerging market, basically declared bankruptcy. Some people say that the reason why auto manufacturers are moving to emerging markets is that the European and American markets are saturated. This is true, but according to say's law, automobile manufacturers can re create demand in the European and American markets through innovation. If car manufacturers develop driverless cars, it will completely subvert the global car market. But these auto makers choose to earn a last penny in emerging markets. Although the profit margin of the auto industry has decreased from 9% in 2014 to 6.3% in 2019, we still don't see the courage and determination of the giants to try to make a revolution.
Who is likely to win?
Tesla's market value far exceeds Toyota's, but its global sales are less than a fraction of Toyota's. It can be seen that the capital market seems to be more optimistic about Tesla.
However, the advantage of the new force is that the difficulty of making electric vehicles is far lower than that of fuel vehicles. Electric vehicles do not have the peak of engine, the number of parts and components is reduced by one-third compared with fuel vehicles, and the management difficulty of supply supporting is lower. For a pure electric vehicle, the cost of battery, power system composed of electronic control and automotive electronics is more than 60%. The new power of car manufacturing can better control the manufacturing initiative. Apple's entry into the automotive field has opened up the imagination of the OEM mode of electric vehicles.
Today, almost all car manufacturers can see the future trend of driverless. Even if they don't get on the electric car quickly in a short period of time, they can also be driverless. In fact, the technology of intelligent driving assistance of traditional automobile manufacturers is not bad. However, they lack the desire and motivation for change. Tesla needs battery revolution and driverless revolution to meet the expectations of users and capital.
Of course, I don't think that the new power of car manufacturing can replace the traditional car manufacturers in the short term. In this round of car building movement, the theme of cooperation may be greater than substitution. This is a global supply chain ecology. The driverless automobile industry chain is long and the system is complex, which needs chip companies, software companies, electronic manufacturers and vehicle manufacturers to complete together. The most advanced chips in the world are designed in the United States, manufactured in Japan, lithography in the Netherlands and manufactured in South Korea. Driverless cars will be a collection of the world's top manufacturing.
But the more we go back, the more we go in the direction of driverless, the more obvious the advantages of Tesla, apple, Google and other information companies are, and artificial intelligence and big data will occupy a more dominant position. If it is possible to extend to vertical lift vehicles, it may also need the support of aviation technology companies. By then, the biggest impact may be the real estate in the first tier cities.
According to Smith's theorem, the world's top technology must be born in the global market, and it is difficult for a country or today's independent globalization to support the next round of automobile revolution. The automobile revolution will reshape the global automobile industry chain and promote the evolution of the global order. The real globalization is the market order of mutual and non-interference.