In 2020, Tesla sold 500,000 vehicles, which will be profitable, with a market value of approximately US$770 billion. It is the sum of Toyota, Volkswagen, GM, Hyundai, Ford and BMW. NIO sold less than 50,000 cars and lost a lot of money, but the market value is $90 billion. It is GM and Ford sum. Tesla If it is not able to sell carbon emission indicators, the actual and NIO is not profitable. The annual car sales of these traditional car companies are between 6 million and 10 million vehicles, and the gross is generally 15%~ 20%, The average net profit is around 3%.

The gap in market value is so huge, if it is not for the valuation bubble of new energy vehicles, it can only be the market’s belief that it is like Tess Pull and NIO and other new car-building forces like Toyota and BBA (Mercedes-Benz, BMW, Audi) and other traditional car companies. Why do you say that? Because the scale of the entire global automotive industry is limited, there are about 90 million vehicles per year, sales of about 2 trillion US dollars, and a growth rate of about 3%per year. Since the growth of the automobile industry is closely related to the growth of per capita income, and it is difficult for the growth of per capita income to exceed 3%, it is difficult for the overall growth rate of the automobile industry to break this rate.

getUrls?link=3397710c713e255a5f5a182e3301e112 - Professor Liu Jin from Cheung Kong Graduate School of Business:When will the new energy vehicle valuation bubble burst?

If the current market structure is maintained and the net profit margin is 3%, then it can only support the market value of auto companies of about $1 trillion:the P/S ratio is 0.5 times, the P/E ratio is 16.5 times, and The historical valuation level of the automotive industry is consistent. However, the current market value of Tesla and the new car-building forces is very similar to the capacity of the entire market, so If these prices are reasonable, new car manufacturers must completely replace traditional car companies. So, is this possible?

My colleague Chen Hongya and I wrote a recent article”New Energy Vehicle Industry:Subversion, Or a bubble?”Explained why new car manufacturers cannot completely replace traditional car companies. The core reason is that the logic of the new energy automobile industry is different from that of the IT and Internet industries:the Internet has strong user stickiness because of the accumulation of user data; while the data accumulation of automobiles belongs to the machine and does not affect users. Sticky. So things like Apple, Google Internet companies, once they are in the forefront of the industry, can maintain their advantage for a long time due to user stickiness, obtain high profit margins, and even generate monopoly; but because the car is not sticky, today you are ahead, and you will immediately attract strong , A lot of competition, which will lose some market share.

In the field of mobile phones, Android and Apple divide the world. Because of the stickiness of users, it’s probably well water Don’t worry about the river; but those who drive Mercedes will not necessarily buy a Mercedes Benz for the second car. BMW is as good as it is, and it may be more fresh. . Therefore, the most successful car company like Toyota currently has a market share of about 10%.

The new energy automobile field not only does not see any signs of a winner-takes-all monopoly, it seems to be far more competitive than the traditional automobile field. With suitable power batteries, the power system of new energy vehicles is far simpler than traditional engines and transmissions, thus greatly reducing the threshold for building vehicles. Therefore, not only new car-building forces can make electric vehicles, but also technology giants such as Apple, Google, Huawei, and Baidu. , Of course, can not pull down the traditional car companies. In fact, it has been reported recently that Baidu will build a car, Apple will build a car, and even Sony has built a prototype car. .

In general, what changes have battery power brought to the automotive industry? For society, it is an important measure to reduce emissions and solve pollution; for consumers, it is the same as a sports car driving experience; for new car manufacturers and IT giants, it is a new market opportunity; for traditional car companies It is the loss of one of the biggest moats:fuel engine technology accumulated over a century.

The future of the automotive industry lies in new energy, and there is basically no doubt about it. In order to survive, traditional car companies must fight hard in the field of new energy. The subversion of the power system has made them lose a natural competitive advantage, but it does not mean that they have lost all the ability to serve the market.

New energy vehicles are roughly composed of three parts:battery motors, electronic systems, and vehicle manufacturing processes. Since most of the batteries are provided by third-party suppliers like Ningde era and Panasonic, the main advantage (if any) of the new car building forces is On the electronic system. But in the final analysis, new energy vehicles are vehicles, and traditional car companies have an absolute advantage in manufacturing vehicles. Tesla builds its own factory, and the cars built by it have no major problems, but there are many minor problems; NIO and some other new forces simply outsourced all car building, and they only took care of design, software, and integration. Therefore, on the whole, traditional car companies and new car manufacturers can be said to be comparable in their overall ability to manufacture new energy vehicles, and each has its own merits.

getUrls?link=eb45bf6a2e4096541394faef303edbc1 - Professor Liu Jin from Cheung Kong Graduate School of Business:When will the new energy vehicle valuation bubble burst?

For the traditional car companies in the first echelon, they are fully capable of manufacturing and TeslaThe same cool new energy product. Judging from the current plan, almost all Chinese car companies and German car companies are already aggressively entering the field of new energy, with American companies following closely behind. Japanese companies are more conservative, but are actually very ahead in the field of new energy, especially hydrogen energy.

Using the above logic, if everyone basically holds similar competitiveness in the field of new energy, then with the entry of IT giants and new car manufacturers, and the desperate resistance of traditional car companies, the final result must be It is the re-planning of market share. Every car company, regardless of the old and new forces, will occupy a smaller market share than before. The former car giant could sell tens of millions of cars every year, and it is likely to be halved in the future. Of course, companies with backward technology will be eliminated, but this has nothing to do with new energy or fuel vehicles.

The crazy valuation of new car-making forces in the capital market is actually hanging by a thread. The soaring valuation of these companies in 2020 is due to the fact that the market finally realized the feasibility and historical inevitability of new energy vehicles after several years of suspicion. From China to Europe and then to the United States, consumers’ views on new energy vehicles are rapidly evolving from eating crabs to eating everyday.

But the market’s mistake lies in not realizing the essential difference between the automotive industry and the IT industry:TeslaNot the Apple of the automotive industry, but the Apple is more like Nokia in the era of feature phones. The competition in the automobile industry will be extremely cruel. It will not be a winner-takes-all. It will be the Spring and Autumn Period and the Warring States Period.

Tesla is indeed a leader in new energy vehicles, but soon everyone discoveredNIO is actually good, Xiaopeng is also good, ideal is also good, BYD is also good, Volkswagen is also good, BMW is also good… All the first time to open Tesla People who span> will be impressed by its amazing acceleration ability as a sports car, but they don’t realize that all high-end new energy vehicles can actually achieve the same or similar experience. In Europe, it was not Tesla that new energy vehicles sold the most last year, but Renault and Volkswagen.

So, if there is a huge bubble in the stock price of the new car-making forces, when will the bubble burst? Any prediction in the capital market is full of risks because there are too many uncertain factors. But if we follow the logic of this article, when the capital market realizes that the new energy vehicle market will be a fully competitive, low-margin market, it is the day when the valuation bubble bursts.

In the next few years, all new energy vehicle products will have rapid growth. This is the general trend. Therefore, the growth rate itself will not pierce the bubble but will provide data support for high valuations. What is really sensitive to the bubble is the market share of each company. At present, due to the first-mover advantage of new car manufacturers, most of the sales of new energy vehicles come from these companies. But with the entry of more players and the transformation of traditional car companies, the car companies that are ahead will soon feel the pressure of competition and lose market share.

When the competition heats up, it is more likely that a large number of car companies will not be able to make a profit, and will promote sales and maintain share with zero or even negative profits. At this time, if the market wakes up, the bubble will burst. How long does it take? At present, it can take one to two years at most.

(The author is a professor at Cheung Kong Graduate School of Business)