Range extension, hard to sell

"Whoever wants to use this backward technology can use it."

About five years ago, range - extended technology was subjectively labeled like this by some in the industry. However, as time passed, especially with leading players like Li Auto and AITO vigorously promoting and achieving success, range - extended technology gradually grew into a force to be reckoned with in the Chinese automotive market.

Last year, the terminal sales volume soared, and more and more automakers flocked to this technology route.

Precisely against this backdrop, someone once made a bold prediction: In the new energy vehicle segment, it is very likely that pure - electric, plug - in hybrid, and range - extended technologies will divide the market in the near future.

However, as we stepped into the new year, we found that the situation did not develop as expected.

It was thought that with the so - called "advantage of the fuel tank", range - extended technology would shine brightly. But that's not the case. Take July, which has just passed, for example. Even in the so - called "off - season", new energy vehicles still delivered a relatively impressive performance. In particular, the retail penetration rate reached 54%, a record high.

Breaking it down further, the sales volume of pure - electric vehicles reached 607,000 units, a year - on - year increase of 24.5%; the sales volume of plug - in hybrid vehicles reached 278,000 units, a slight year - on - year decrease of 0.1%. In contrast, the sales volume of range - extended vehicles was only 102,000 units, a year - on - year decline of 10.4%. From the cumulative retail sales volume from January to July, the year - on - year increase of range - extended vehicles was 12.1%, far lower than the 35.2% of pure - electric vehicles and 25.2% of plug - in hybrid vehicles.

Anyway, it shows a sign of weakness. Naturally, many readers will be curious about what exactly happened to cause the protagonist of this article, range - extended technology, to face a growth bottleneck?

The answer lies in multiple dimensions.

Some trends are irreversible

Actually, the reason why range - extended vehicles are hard to sell is easy to understand.

First of all, the explosive growth of pure - electric vehicles has largely squeezed the living space of range - extended vehicles, especially in the mainstream mass market. The balance of the supply relationship between automakers and consumers has gradually tilted towards the former.

Meanwhile, more and more early adopters of range - extended vehicles are entering the vehicle replacement cycle, and a large proportion of them are turning to pure - electric vehicles. Although it may be a bit harsh, this is indeed the observed industry trend over the past six months.

Just among people around me, there have been at least three or four such cases.

Looking deeper, due to cost constraints, most range - extended models in this segment cannot achieve a long pure - electric driving range. This inevitably increases the frequency of energy replenishment for car owners, greatly reducing the user experience. In terms of comprehensive fuel consumption in the power - depleted state, they are also inferior to plug - in hybrid models in the same class, which is quite embarrassing.

More often, they seem to be fulfilling the task of supplementing the product lineup.

For example, in the case of Leapmotor, a typical new - force automaker, the sales of its popular SUV models are mainly driven by pure - electric versions, with range - extended versions playing a supplementary role, which is contrary to the traditional perception. New models like B10 and BO1, with a price as low as around 100,000 yuan, don't even have range - extended versions.

Whether we admit it or not, in the mainstream mass market, where the "cake" is most appealing, it is much more difficult than expected for range - extended vehicles to compete with pure - electric and plug - in hybrid vehicles.

What about the mid - to - high - end market?

Undoubtedly, in the past few years, thanks to the remarkable achievements of Li Auto and AITO, these two "powerhouses" have created a very prosperous scene. The high sales volume and high prices have made many automakers envious.

Subsequently, many brands have invested a large amount of human, material, and financial resources in the range - extended vehicle market. This year, what was once a "blue ocean" has quickly become overcrowded.

The intensity of competition is increasing day by day.

Take Li Auto as an example. After the period from January to July, we can clearly feel the huge pressure this new - force automaker is facing. In July, the delivery volume dropped sharply year - on - year, from 50,000 units last year to 30,000 units, which is a very dangerous signal.

As for AITO, it also experienced fluctuations in the first half of the year. Fortunately, with the successive launches of M9 and M8 and their outstanding performance, it reversed the decline. With the arrival of M7, it is bound to regain its strength.

However, it, backed by Huawei, is still in the minority.

Overall, the fierce competition in the range - extended vehicle segment in the mid - to - high - end market has made everyone suffer. More seriously, the growth rate of the corresponding "cake" is much slower than the increase in the number of competitors. A rough statistics shows that there are no less than 15 range - extended six - seat SUVs this year, but the overall market size hasn't changed much.

In addition, considering the current economic environment, potential customers' enthusiasm for "expensive cars" is still waning. According to the data released by the Passenger Car Association, the retail sales volume of luxury cars in July was only 170,000 units, a year - on - year drop of 20%.

In essence, the danger "alarm" has been sounded.

For range - extended vehicles, the difficulty in sales is not a short - term phenomenon but will persist in the long run. In this process, only leading players with brand influence like Li Auto and AITO can easily share the market. Most of the followers who blindly bet on this resource - scarce track are likely to end up as "cannon fodder".

In short, whether in the mainstream mass market or the mid - to - high - end market, "Range - extended technology is indeed appealing, but it's not easy to succeed."

Range - extended technology becomes a high - end configuration

As mentioned at the beginning of this article, given the current situation, it is almost impossible for pure - electric, plug - in hybrid, and range - extended technologies to "divide the market equally".

As an onlooker, referring to the industry trend, I am more and more convinced that: "With the passage of time and the development of technology, in the mainstream mass market, pure - electric vehicles will dominate, plug - in hybrid vehicles will play a supplementary role, and range - extended vehicles will have a very small share. In the mid - to - high - end market, range - extended technology will still be a force to be reckoned with. Meanwhile, with the support of a mature energy - replenishment system, the market share of pure - electric vehicles will gradually expand, and plug - in hybrid vehicles will become a minority."

In other words, the real opportunity for range - extended technology is obvious.

Recently, from the launch logic of several important products, "ultra - fast charging + large - capacity battery + long - range" has gradually become the new mainstream in the industry.

For example, the "star" in the ultra - luxury market, the Zunjie S800, has a power battery capacity of 63 kWh and a pure - electric driving range of over 330 kilometers.

Another example is IM Motors, which recently held a press conference for its range - extended technology. It introduced a 66 - kWh battery and an 800V ultra - fast charging high - voltage platform in cooperation with CATL, bringing a pure - electric driving range of over 450 kilometers.

Take XPeng, which officially announced its entry into the range - extended vehicle market last year. In the latest list of the Ministry of Industry and Information Technology, the range - extended version of the X9 finally made its appearance, and it is reported that its pure - electric driving range will also reach 450 kilometers.

"We are now seeing a trend that range - extended vehicles are using larger and larger batteries. Isn't the purpose to further reduce the frequency of using the range extender? In the past, it could be used five or six times a year, but now it may only be used once or twice a year. It doesn't seem cost - effective to carry hundreds of kilograms of extra weight every day when driving. Taking a person as an example, it is very unreasonable to carry such a heavy load every day."

Interestingly, during an interview after the launch of the LeDao L90, Li Bin shared his view. It's as if he was saying: "If range - extended vehicles are using larger and larger batteries, why not just buy a pure - electric vehicle?"

There is nothing wrong with this logic, and I have actually communicated with many range - extended vehicle owners.

First of all, why did they buy a range - extended vehicle? Their unified answer was the fear of range anxiety. Secondly, why do they use pure - electric mode in most situations after buying a range - extended vehicle? The responses mainly focused on the fact that charging costs much less than refueling. Thirdly, what are the pain points? Short pure - electric driving range and slow energy - replenishment speed received the most votes.

The use of large - capacity batteries and ultra - fast charging on range - extended vehicles is obviously the result of automakers' continuous iteration and evolution in response to urgent needs. "Regardless of whether it's reasonable or not, if people want it, then provide it."

Against this backdrop, looking back at Li Bin's remarks, "From NIO's perspective, the starting point is good, but never try to educate users. For many range - extended vehicle owners, even if the range extender is only started once or twice a year, having it there makes them feel more at ease than thousands of battery - swapping stations."

In the vast Chinese automotive market, no single technology route can dominate.

From my personal perspective, I would like to say: "In the past, range - extended technology had an absolute advantage over pure - electric vehicles - lower comprehensive manufacturing costs. However, with the significant decline in the cost of power battery raw materials, this advantage has almost disappeared."

On the contrary, the cost of range - extended vehicles equipped with "ultra - fast charging + large - capacity battery + long - range" this year even exceeds that of some pure - electric vehicles in the same class. After continuous promotion, this powertrain has become a "high - end configuration" in the minds of many people.

More directly, for a new energy vehicle aiming to enter the mid - to - high - end market, whether it's an SUV or a sedan, once it has this powertrain, the explanation cost at the terminal will be much lower than that of pure - electric vehicles in the same class, and the enterprise can also obtain higher premiums and profits at the business operation level.

This also explains the fundamental reason why Li Auto and AITO are so enviable. "Range - extended technology is not a backward technology at all; it's a profit - making machine."

In the future, for most brands, from joint - ventures to domestic brands, if they want to sell so - called "expensive cars", embracing range - extended technology is still an inevitable choice.

Range - extended vehicles are hard to sell, but they are still very attractive, especially when they are regarded as "high - end configurations". The rules and gameplay in this field have once again been adjusted and reshaped.

If you want to gain a foothold in the mid - to - high - end market, "ultra - fast charging + large - capacity battery + long - range" is the shortcut. Of course, in addition to the technology itself, there should be no major flaws in aspects such as brand image, marketing methods, and product pricing. Think about it carefully.

From the sales structure from January to July this year, range - extended vehicles account for less than 10% of the entire new energy vehicle market. It has always been a game for a small number of players.

But there are always some "cannon fodder" who overestimate their capabilities and rush headlong into danger...

This article is from the WeChat official account "Automotive Commune" (ID: iAUTO2010), author: Cui Liwen. Republished by 36Kr with