Copyright FOURIN, Inc. 2023
DiDi Leads BEV Development, Alters Business Model of Consignment Production
In November 2020, China's largest ride-hailing service company DiDi Chuxing unveiled the “D1” BEV model which was jointly developed with Chinese automaker BYD. This is the first automobile developed under the initiative of a vehicle dispatch service company. The spread of BEVs by a giant vehicle dispatch service company, which is said to have about 400 million monthly active users, is attracting attention both inside and outside the industry.
The operation method of the D1 is different from past methods. The D1 is purchased by an operating company affiliated with DiDi, and the DiDi driver leases the D1 from the operating company for use. The usage fee is calculated according to the mileage (as of the end of November 2020, the calculation standard for the usage fee has not been announced). DiDi’s aim with the new model is to provide drivers and users with vehicles well suited for ride-hailing services. Meanwhile, its development partner BYD aims to secure new sales channels through the partnership. However, it has been pointed out that if such a business model is established, vehicle manufacturers may become a contract producers of NEV products and lose the initiative in product development and production. Looking at BYD’s NEV sales performance, such concern has some validity. In 2019, BYD’s NEV sales reached around 230,000 units (including 219,000 passenger vehicles). DiDi’s CEO Cheng Wei said on the D1’s launch day that the cumulative number of vehicles that can be reserved using DiDi’s vehicle dispatch system will exceed 1 million by 2025. They are planned to be equipped with an automatic driving function developed by DiDi. Cheng Wei also announced that the company intends to achieve fully autonomous driving by 2030. Based on BYD’s sales performance in 2019, DiDi’s target of 1 million units is equivalent to BYD’s four-year NEV sales. Naturally, such figure is very appealing to any manufacturer, so if the initiative is taken, the future of the manufacturer could change significantly.
Another feature of the D1 is that it was developed by incorporating the opinions of drivers and users of DiDi’s sharing service. Compared to other passenger vehicles on the market, the driver’s seat is designed with reference to a long-distance bus and is equipped with an electric lumbar support as standard equipment. The steering wheel has a “DiDi” button. Simply by pressing the button, the driver can receive vehicle dispatch request from users and can also call the police in an emergency. The location of the button allows the driver to concentrate on driving. The sliding door on the right side is intended to improve the convenience of passengers getting in and out. The car has a spacious interior in the rear and offers a touchscreen infotainment system in the center console and two touchscreen entertainment units for the rear passengers. In addition, AEB is also installed as standard equipment. These new features were added by DiDi after gathering the opinions of drivers and users of sharing services in a preliminary market research and analyzing big data accumulated in its own vehicle dispatch system. BYD is in charge of product development and manufacturing based on its own BEV development platform. This new kind of partnership of DiDi and BYD has greatly overturned the conventional business model of consignment production. The vehicle dispatch service company has become a production consignor.
In China, several automakers are developing their own sharing services. SAIC Group’s Xiangdao Chuxing, GAC Group’s Ruqi Chuxing, BAIC Group's Huaxia Chuxing and Geely Automobile’s Caocao Chuxing are just some of the many. However, compared to specialized sharing companies such as DiDi, there are fewer users, so it is difficult to accumulate big data related to operations. There is no doubt that sharing companies will have a significant impact on the automobile industry in the future, so it is worth following the future developments of the D1.