Author | Wu En

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Recently, the official website of the Ministry of Industry and Information Technology (MIIT) issued a document publicly soliciting opinions on the revision plan for the mandatory national standard "Safety Technical Requirements for Automobile Door Handles", causing quite a stir in the new energy vehicle industry.

On the surface, MIIT's move to regulate car door handles appears to be a mere technical correction, but in reality, it is aimed at the myriad of "black technologies" in the new energy vehicle market. Both manufacturers and consumers should rationally question the new energy vehicle industry: do those "new concepts" packaged with high-level vocabulary truly provide sufficient value to users?

To put it more broadly, aside from technical details, since the policy-driven explosion of the new energy vehicle sector in 2012, this "car-making movement" has given rise to countless conceptual hypes and capital games under the guise of "overthrowing tradition". Nowadays, with market penetration exceeding 50% and the corporate elimination race accelerating, new energy vehicles are finally emerging from the chaotic era of "gullible rich people" to mature stages where product competitiveness and corporate competitiveness truly matter, returning to the essence of the automotive industry: safety, pragmatism, and long-termism.

'Pause' button on chaotic innovation

The revision of national technical standards for car door handles easily reminds people of the recent Xiaomi car incident on a highway in Anhui.

Two months ago, a Xiaomi SU7 was involved in a collision accident on a highway in Anhui and caught fire, resulting in three deaths. Some voices claimed that the Xiaomi car's "door locks could not be opened" after the accident, pushing electric car door handles into the limelight. However, it is not the first time that hidden door handles, which have almost become a standard configuration for new energy vehicles, have fallen into a public opinion vortex.

On April 26, 2024, an AITO M7 vehicle was involved in a traffic accident in Yuncheng, Shanxi, killing three occupants. After the accident, the door could not be opened using the door handle; in 2022, a Lexus LM in Guigang, Guangxi, had its doors locked after a collision, forcing rescuers to break the windows; in 2019, a man in the United States driving a Tesla Model S was involved in a traffic accident, and rescuers encountered obstacles when trying to open the doors, ultimately leading to a fire inside the vehicle and casualties. Tesla was subsequently sued in court, becoming the world's first case of a death inside a vehicle due to a hidden door handle.

The original intention behind the design of hidden door handles was to look good and "reduce wind resistance". However, aside from subjective aesthetic differences, how much wind resistance can be reduced by a door handle? What is its significance to ordinary car owners? In this regard, Wei Jianjun of Great Wall Motors bluntly pointed out that the reduction in wind resistance by door handles can be "negligible".

There are many flashy technologies and functions in new energy vehicles. Cui Dongshu, Secretary-General of the China Passenger Car Association, bluntly stated: "Many cool functions are not very practical and carry significant risks." Among them, the most typical and criticized is the proliferation of large in-car screens.

Over the past few years, large screens have become one of the "faces" of the digitalization of cockpits. Besides the 12-inch to 17-inch central control screens, there are now even 37-inch or 45-inch "ultra-wide screens". However, the large screens, which have eliminated physical buttons, have not brought more convenient operation or safety improvements. Various functions are hidden in layers of menus, especially when voice recognition is not yet mature. Drivers have to turn their heads constantly to click on the large screen while driving, which is no less dangerous than sending WeChat messages while driving.

In 2020, the Transport Research Laboratory (TRL) in the United Kingdom published a study pointing out that when using touchscreen operations for interactive systems such as CarPlay and Android Auto, drivers' reaction times are 53% to 57% longer than normal driving, which is higher than drunk or drugged driving.

In addition, there are many dazzling technologies that constantly test the patience of car owners. After stripping away the esoteric terminology, the value of these technological innovations is worth considering. For example, Xiaomi SU7 Ultra recently faced a public relations crisis due to its carbon fiber perforated front hood.

According to media reports, some Xiaomi SU7 Ultra owners who opted for the 42,000 yuan carbon fiber hood believed that Xiaomi had previously promoted the "race-car-grade carbon fiber", "dual-channel aerodynamic design", "able to assist in heat dissipation", "increase downforce" and other functions of the carbon fiber perforated hood model. However, in reality, aside from the dual-channel front hood appearance, the internal structure is almost identical to the regular version. Many consumers questioned the false advertising and demanded refunds or new orders.

Another example is intelligent driving, which almost every new energy vehicle manufacturer is relentlessly promoting. In reality, most of them still belong to L2-level assisted driving, which still requires the driver to monitor the driving process throughout, far from autonomous driving. Nowadays, in response to regulatory requirements, they have successively "changed their tune" to assisted driving.

The emergence of "innovative features" such as smart cockpits and in-situ turning is also partly related to manufacturers creating gimmicks beyond actual demand to attract attention.

Now, MIIT's regulation of car door handles may become a turning point for the industry to return to rationality—future technologies must withstand the rigorous inspection of national standards, rather than simply harvesting the market through marketing rhetoric. This is also an inevitable phenomenon as the new energy vehicle industry enters a stage of development where the strong prevail and the weak are eliminated.

The tide begins to wash away the sand

In 2012, China released the "Development Plan for the Energy-Saving and New Energy Vehicle Industry (2012-2020)", further clarifying that the main strategic direction of China's new energy vehicles is pure electric vehicles. Amidst the surging wave of electrification, various forces smelled the business opportunities and rushed to enter the market.

Searching with the keyword "automobile" on QCC.com, as of May 12, there were a total of 27 million search results. Among them, the number of enterprises established from 2012 to 2022 reached 11.8 million, accounting for more than 43%.

Over the past decade, those who have raced to stake out territory include traditional automakers and emerging forces entering the industry. There are budding entrepreneurs as well as well-known tycoons. Amidst the frenzy of capital, crowds gathered, and PowerPoint presentations flew, giving rise to countless absurd scenarios.

In 2014, Jia Yueting founded Faraday Future (FF). He packaged the first model, FF 91, with the concept of a "mobile internet terminal" and successfully attracted an investment of 800 million US dollars from Evergrande Group (later terminated due to disputes) with just a 57-page funding PowerPoint. In 2021, FF went public through a backdoor listing and raised 1 billion US dollars, and even Middle Eastern capital entered in 2023. However, to date, the delivery number of this car has not exceeded 20 units.

In 2016, Taiwanese businessman Shen Wei founded Think Auto in Ganzhou, Jiangxi. However, from start to finish, the company never disclosed any specific information about production line construction, technological research and development, vehicle manufacturing, etc. For a period of time, the company had no revenue at all. All the income of the company's headquarters in Taiwan came from a noodle restaurant under its umbrella. Even so, Think Auto managed to raise more than 1 billion yuan in funding.

After failing to invest in Faraday Future, Xu Jiayin decided to build cars himself. In 2019, Evergrande announced that it would become "the world's largest and most powerful new energy vehicle group" within 3-5 years. Just two years later, at the Shanghai Auto Show, Evergrande's Hengchi Motors already had nine models on display. The market value of Evergrande Auto once surged to 700 billion Hong Kong dollars, even surpassing BYD. However, with Evergrande's financial crisis, the true colors of Hengchi Motors were revealed, having burned over 100 billion yuan and with sales stay at around one thousand units.

The "big pie" drawn on a PowerPoint presentation may be momentarily satisfying, but a bubble lacking support from the real economy will inevitably lose its color sooner or later.

The "2024 China New Energy Vehicle Usage Research Report" shows that the cumulative sales of new energy passenger vehicles have exceeded 7 million units, with a year-on-year increase of over 40%, and the market penetration rate has remained above 50% for consecutive months. However, amidst this wave of growth, dozens of automakers have been eliminated in the "bloody sea", with layoffs of up to 100,000 people, and more than 400 enterprises disappearing in the past six years...

Especially after the subsidies tide receded, new energy vehicle enterprises began close-quarters combat. Automakers lacking product competitiveness were further "washed out" by the market.

Once known as the "domestic new energy luxury car", HiPhi Automobiles suffered from low sales due to its high pricing and insufficient product competitiveness, ultimately leading to a debt of 15.7 billion yuan and entering bankruptcy reorganization.

*Image source: HiPhi Automobiles official website

In 2022, when new energy vehicle models were still mainly priced above 200,000 yuan, NIO Auto actively sink into the 100,000-150,000 yuan range, and its sales successfully surpassed those of "Xpeng, NIO, and Li Auto", becoming the first new force brand with annual sales exceeding 150,000 units. However, as more automakers entered the same market segment, users began to seriously study the various functions of new energy vehicles, and NIO Auto, which believed in "my destiny is in my own hands", could not withstand the market test. Since the beginning of this year, NIO Auto has been mired in bankruptcy rumors.

WM Motor, which was once all the rage, also experienced a decline in sales and a broken capital chain due to insufficient R&D investment, a product competitiveness that was extremely mismatched with market competition intensity, and more than a dozen spontaneous combustion incidents over two years, ultimately leading to its withdrawal from the market.

In the fame and fortune arena of carmaking, countless people have entered and left, and countless high-rise buildings have risen and fallen. After the tide of capital recedes, the "players" left on the field begin to pay increasing attention to the essence of business operations.

New energy: no longer 'gullible rich people'

When seeing the astonishing figure of over 12 million new energy vehicle sales nationwide in 2024, it is easy to understand why so many manufacturers rushed headlong into this sector over the past decade. Because this is an emerging market with a single-year market size of over a trillion yuan, and most competitors are also just "greenhorns" born in the "newbie village". Therefore, many people have the same idea: even if they cannot ultimately stand out independently, merely going with the flow is enough to get a piece of the pie.

However, even some founders who are earnestly trying to build a real business cannot avoid the green of growth when first entering the industry and stumble in the car-making pit.

Before joining Xpeng Motors, Wang Fengying, the "iron lady" of Great Wall Motors, bluntly told He Xiaopeng, "There's a problem with your company's steel." An incredulous He Xiaopeng spent nine months personally investigating before finally understanding that the people in the company's steel procurement chain had been colluding to deceive him.

*Image source: Xpeng Motors official website

As a new force, NIO has always been good at "grand narratives" but has neglected cost control. Once, an owner claimed that he saw a huge NIO House in Beijing with few people and several unused Mac computers. As a shareholder, he felt really sad to see such money being spent. After returning, he liquidated his NIO stocks. There are more than 170 such NIO Houses across the country.

Once upon a time, new energy vehicle enterprises, especially the new forces, were like the "young masters" of the industry, with vigor and vitality, being reckless and extravagant. However, with the arrival of the life-and-death battle, the "young masters" began to transform into "old stewards", returning to the essence of business operations: cost reduction and efficiency enhancement, cherishing every bullet.

After recruiting Wang Fengying, Xpeng Motors has seen significant improvements in business operations. Wang Fengying, with her years of experience at Great Wall Motors, reduced Xpeng's 24 sales regions nationwide to 12, eliminated unprofitable direct stores, and expanded dealerships. In 2024, Xpeng had 690 stores nationwide, an increase of more than 270 compared to before Wang Fengying joined. The proportion of marketing expenses to revenue was reduced from 34% in 2023 to 14% in 2024, significantly improving marketing efficiency.

*Image source: Xpeng Motors official website

At the same time, He Xiaopeng is no longer laissez-faire but takes an iron-fisted approach to anti-corruption, even using legal means to remove the procurement-related responsible person; he is no longer extravagant but penny-pinching, even controlling employee travel expenses; he is no longer concerned about face but does business officially, turning discussions into commands.

Some say that He Xiaopeng has transformed from a "tech geek" to a "domineering president". But this is what a profit-driven enterprise should be like. Financial reports show that Xpeng Motors' total revenue in 2024 was 40.87 billion yuan, a year-on-year increase of 33.2%. Its vehicle deliveries increased by 34.2% to 190,000 units.

Seeing Xpeng's transformation, Li Bin also once lamented that if Xpeng could do it, why couldn't NIO. He wrote in an internal company letter, "I myself indeed need to enhance my business awareness and deeply reflect." To this end, NIO is also actively seeking change.

In recent years, NIO has no longer been obsessed with high-end products in its product structure but has launched mid-to-low-priced models such as LeDao (priced at 140,000-250,000 yuan) and Firefly (priced at 110,000-120,000 yuan) to actively sink , entering the mainstream household and young markets through differentiated product positioning. Brand premiumization can be the life ideal of the founder, but in the present, surviving is the reality that new forces need to recognize.

*Image source: Firefly official website

Including the recent news that Zeekr, a subsidiary of Geely Group, will be privatized and delisted less than a year after its U.S. listing, while multiple brands under the Geely Group have also been merged into the group. The strategic shift from a flourishing scene to returning to "one Geely" undoubtedly aims to reduce internal competition and expand scale and reduce costs through joint R&D and procurement.

All these changes stem from the return of the underlying logic of the new energy vehicle industry: when an industry returns from flashy prosperity to plain authenticity, product competitiveness with technology, experience, and service is the hard truth. As a result, entrepreneurs are no longer "greenhorns", and consumers are no longer "sheep to be sheared". When the industry's "top streamer" Xiaomi Motors is also facing doubts from the entire network, new energy manufacturers should know that the era of 'gullible rich people' is over, and it is no longer a time when playing with traffic marketing can bring sales growth.