Change is always present, ubiquitous, unstoppable, and omnipotent.

　　With the advent of the post pandemic era, the economy is becoming increasingly weak, and demand and consumption are showing a cliff like downward trend. When everything starts to focus on cost-effectiveness, the automotive industry can only face this stormy transformation head-on. Of course, it is impossible to be alone, but rather bear the brunt.

　　The trend of automobile price reduction is coming. New energy vehicles led by Tesla and BYD, as well as joint venture fuel brands of Citroen and Honda, are all involved in this market competition called "price war". When car companies know they cannot do it, the result of drinking poison to quench their thirst is already destined——

　　The entire automotive industry chain is experiencing severe turbulence.

　　Due to being further away from the C-end, component suppliers have always been referred to as "behind the scenes heroes" and "uncrowned kings". It is no exaggeration to say that the technology benchmark in the automotive industry has always been Tier 1, and technological change has also been driven by leaders such as Bosch, Electric Equipment, and ZF.

　　But the wheels of the times roll forward, and the only thing that remains unchanged is forever changing. The automotive parts industry is even more so, with those who are capable going up and those who are weak going down. No one can always be above others, even component giants such as Bosch and Dianzhuang must face the trend of new energy vehicles and face the upcoming uncertainties.

　　As the saying goes, it is not easy for an elephant to turn around; But now, electrification transformation is imperative.

　　01 "New Key" Up, "Old Core" Down

　　On April 18, the 2023 Shanghai Auto Show was held as scheduled, and the spare parts suppliers who have always been "stable in Mount Taishan" are obviously more active than ever, and are more willing to show their latest products and technologies. And behind this "from behind the scenes to in front of the stage" action is a change in mindset, which is also a last resort.

　　The reason is simple: the advent of the era of new energy vehicles has put forward new requirements for automotive components. However, these new industries and things do not have a specific image in the minds of consumers, so the majority of them are 'unaware'.

　　Looking back at the past, the engine, gearbox, and chassis of a car were collectively referred to as the "three major components", which were key factors in measuring the quality of a car: the engine ensures strong power, the gearbox is responsible for power transmission, and chassis tuning involves driving comfort.

　　However, in the face of the trend of new energy vehicles coming from Haotang, the traditional "three major components" are no longer necessary, but have transformed into battery based power systems, motor based electric drive systems, and electronic control systems integrated with various electrified devices.

　　The new "three major components" of automobiles have become key, while the core of the old "three major components" has been eclipsed. Against this backdrop, no component supplier is willing to sit idly by and at least show a positive side, striving to take the path of new energy and protect the environment.

　　Perhaps the transformation was successful?

　　As a result, the automotive parts industry has also become lively, with industry elders using technology and experience to elaborate on their product concepts; New car suppliers such as power batteries, LiDAR, and chips are also clamoring to become the "uncrowned king" of the new automotive industry.

　　Will their wishes come true? Answer: The more you want, the less you get.

　　After a century of ups and downs, the automotive industry has indeed established a set of market hidden rules, especially in the parts industry chain, and there are even rumors of "Bosch controlling the lifeblood of automotive companies".

　　Of course, it's not that in the era of new energy vehicles, Bosch is not powerful, but rather that under the influence of many elements, Bosch will no longer be as detached as before. The Chinese market has undergone changes, as there are numerous successors and pursuers of fame and fortune.

　　The 800V high-voltage platform, silicon carbide inverter, higher power density motors, and various other little-known key components are all available and dazzling at this Shanghai Auto Show.

　　But one thing can be certain is that with the arrival of the era of new energy vehicles, opportunities belonging to the parts industry chain and supply chain have emerged one after another. Faced with a blue ocean market full of demand, no one is irreplaceable, even if its current technology is known as "the world's number one". If it cannot maintain innovative vitality and maintain good market relations, it will also become a member eliminated by the market.

　　The so-called alternation of thrones between "new key" and "old core" is like this.

　　Since 02 is stuck in the neck, it should be abandoned

　　In fact, after Huawei was subjected to unreasonable sanctions and restrictions from the United States, various industries in China have been secretive about the issue of "neck sticking". As for the automotive market, which is a new pillar of the economy, this issue cannot be avoided.

　　Unfortunately, although the domestic new energy vehicle industry has temporarily achieved a leading position, other core components besides power batteries still seem to be constrained everywhere, especially in the field of automotive grade chips.

　　Of course, this is not to stimulate national sentiment, but to say that the current market environment and timeline are a great opportunity to establish a complete new energy vehicle parts supply chain in China.

　　Looking at the entire automotive market, the key to BYD's ability to break through the tight encirclement and lead the way lies in having a majority of independent and reliable component supply systems. Tesla is also known as the king worldwide because it has a great say in component supply.

　　There are many slogans for self development across the entire stack and domain, but there are few who truly have the ability to grow and strengthen. As for the current situation of the domestic market, it is likely that only a group of power battery manufacturers such as Ningde Times, BYD, and China Innovation Airlines can support the situation.

　　However, looking back earlier, the phrase "working for Ningde Times" by Chairman Zeng Yuqun of GAC revealed a huge loophole in the power battery industry - particularly a "monopoly".

　　The development of new energy vehicles should not be hindered by power batteries, nor should they be hindered by other factors. If someone wants to gain a dominant position in the industry to "block" the neck of a car company, at least in the current domestic market, it won't last long.

　　The same applies to intelligence.

　　As the concept of intelligence becomes increasingly popular, intelligent driving, intelligent cockpit, and intelligent chassis should be well demonstrated as long as they can "touch" the edge. But one thing to say is that besides the stunning Chatgpt, the in car intelligent features at this time are still in their early stages, and even stronger than Huawei, they dare not break through the limitations of the L3.

　　There are three key factors in this: first, the law, second, safety responsibility, and third, technology.

　　In terms of technology, it's all about selling melons and boasting. Of course, there are also advocates for having enough hardware stacking materials, such as Qualcomm 8295, NVIDIA Orin, multiple long-range LiDARs, and various large screens. As long as there is market demand, component suppliers can make every effort to use them in practice.

　　But is the future really a bright future?

　　Indeed, opportunities outweigh challenges in the automotive market today, and the popularity of new components such as LiDAR, power batteries, and chips has given rise to a brand new blue ocean market. But it must be acknowledged that the water in the automotive parts industry is still deep.

　　Listening to sales colleagues on the phone, many of our products have been pressured by the entire vehicle factory due to the price war, but there is no way out

　　During the auto show, I often talked about the impact of the current price war in the automotive industry while shuttling through the exhibition booths of major component companies in a special forces style. The feedback received is also very direct. At this time, the price war among downstream vehicle companies has spread to the upstream supply chain, and the sales pressure of each enterprise has doubled.

　　Yes, the days when the parts industry used to have a 'one word pricing' are over. Next, only with more valuable products, more convincing costs, and more appropriate services can we survive and continue in such a "rolling" market.

　　The future is not far away, and the story of component suppliers will continue to unfold, but the "uncrowned king" born specifically for the "bottleneck" no longer exists.