Fertile new energy market, rare pure electric belief
If we were to identify the most critical moment for Apple Inc. since the new millennium, the first thing that comes to mind is the passing of Steve Jobs. However, from the perspective of the capital market's reaction, the real crisis was in 2012.
The above chart of Apple's market value trend shows that Apple has experienced five significant declines in its market value over the past two decades. The four declines in 2015, 2018, 2020, and 2022 share a great deal of commonality and can all be considered routine turbulence. They all occurred after the market value reached a historic high—when Apple's market value broke through $700 billion, $1 trillion, $2 trillion, and $3 trillion, respectively, all of which were firsts in human history, and the rebounds after the declines were relatively smooth.
The market value decline in 2012 was different.
At that time, Apple's market value was at the $600 billion scale, which was not a historic first, as Microsoft had briefly touched this level. Moreover, the decline in Apple's value was the greatest (compared to its own market value), and the rebound was the slowest, with a brief pause in the middle.The downturn occurred in the fall of 2012, and it took nearly 20 months for a true rebound to happen. Looking back at that time, what happened 12 years ago in the fall?
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On September 12th, the iPhone 5 was released, and a week later, Apple's market value reached its peak at that time, only to start sliding, with a drop exceeding $200 billion, accounting for more than 30% of its market value. The subsequent release of the iPhone 5S only provided a slight alleviation of the situation.
The rebound took place in the first quarter of 2014. At that time, media reports revealed information about the upcoming iPhone 6, which would be released in a few months. Apple was going to use a larger screen, and from then on, it soared all the way to becoming the first company in history with a market value of $700 billion.
Looking back at the biggest crisis Apple has faced since the new millennium, it was actually triggered by the two-year insistence on not using a large screen. At that time, the large-screen Samsung Note rose very quickly and triggered the follow-up of almost all mobile phone manufacturers around the world, including Xiaomi.
Only Apple held on to its solitary fortress, and the phrase "lengthened but not widened" became a meme at the time.Should it be a large screen or not? At that time, Apple was facing a historic choice. The new energy vehicle market is also approaching such a crossroads.
In the first quarter of this year, Tesla's sales, revenue, and profits all declined simultaneously. The company believes that the significant reason for the sluggish performance is that hybrid models have taken away a large portion of the sales.
Musk, however, still stated at the earnings call that "pure electric vehicles will eventually dominate the market."
When Musk once again emphasizes that "pure electric is the future," it proves that the foundation of trust in this theory is being shaken—because hybrids are transitioning from an inconspicuous interim choice to a fundamental threat to pure electric.
On one hand, the ideal range-extending route is widely recognized and followed, from Lan Tu to Shen Lan and then to Wen Jie... each with increasing influence; on the other hand, BYD's plug-in hybrids have captured an extremely large share in the mainstream market, and major manufacturers are also focusing on following suit.Of course, if that were all, pure electric vehicles (EVs) could still remain unflustered, as the entire industry still takes for granted that hybrid vehicles are merely a product of the current stage, with pure EVs being the definitive end goal.
The issue is that there is also wavering within the pure electric camp.
After the setback in MEGA, Li Auto directly announced the postponement of its subsequent plans for pure electric models, firmly believing that pure EVs will be the future of new energy vehicles, thus "wavering" another one.
Zero Run began launching the extended-range version of the C11 last February, transitioning from a pure electric vehicle manufacturer to a hybrid one, and received significant positive feedback. It can be said that it is this strategy that has allowed them to secure their position in the second tier of new forces, adding another to the "wavering faction."
Xpeng was also recently reported to be considering the launch of hybrid models. Later, He Xiaopeng personally responded, stating that only the flying car would use range extension, while Xpeng Motors remains committed to pure electric vehicles.The media's speculation on the dynamics of pure electric vehicle manufacturers suggests that the market believes it is entirely possible for these manufacturers to shift towards hybrid vehicles. Moreover, we cannot rule out the possibility that XPeng might indeed have the idea of transitioning to hybrids, but has not yet made a decision, or has temporarily rejected it for some other reason? After all, such situations are quite common in the business world.
Let's summarize the camps of pure electric and hybrid vehicles once again — the former includes Tesla, NIO, XPeng, Xiaomi, Zeekr, and so on; the latter includes BYD, Li Auto, Zero Run, Huawei, Deep Blue, and so on.
Compared to the absolute belief in pure electric vehicles in previous years, the new energy market in the past two years can be said to be increasingly devoid of "faith."
Policy changes are also taking place, with the EU's ban on combustion engines easing restrictions on carbon-neutral synthetic fuels, and the UK postponing its combustion engine ban until 2035.
If it can be postponed today, it can be postponed tomorrow; if synthetic fuels can be allowed today, hybrids might be allowed the day after tomorrow.Who knows?
Supporting the transition to new energy is inherently more about industrial goals than environmental ones. From this perspective, the current performance of BYD and the likes of NIO, XPeng, and Li Auto has already met expectations, with hybrid and pure electric vehicles capable of achieving industrial upgrading.
Furthermore, many countries and regions do not exclude hybrids from their bans on internal combustion engines. Therefore, China has every reason and motivation to retain hybrid technology.
In summary, from every angle, the theory that pure electric is the absolute future is gradually becoming uncertain.
An important factor unfavorable to pure electric is Musk's management style. More and more evidence suggests that Musk indeed has the passion and ability for innovation, but lacks the passion and ability for long-term operation of a product.For example, he once said in 2019: "Their (Model S&X) significance is minimal." From the Roadster to Model S&X and then to Model 3&Y, Tesla goes all out with every new project or product it launches, and as soon as it turns to the next project or product, it loses interest in the previous one.
This is also one of the reasons why the Model 3&Y has seen lackluster upgrades for years after its launch.
What's more unfavorable for pure electric vehicles is that their supporter, Musk himself, may not be as steadfast. Judging from his consistent behavior, his passion for market size far exceeds his passion for beliefs and ideals. He still insists on pure electric because current information still indicates that pure electric is the ultimate destination, and once there is any change, Musk's shift could be incredibly decisive.
Cars are not the same as smartphones. Smartphones can bring more than feature phones, and large screens can bring more than small screens; these are undeniable facts.
As for cars, from a purely consumer perspective, there is no real advantage of pure electric over hybrid.Only those who truly care about environmental protection will firmly believe that pure electric is better than hybrid. Believing that pure electric can definitely outperform hybrid is actually believing in the sense of responsibility of human nature.
Why else would one say that this is a fork in the road?
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