Holding hands with Tesla, how far is Gree’s “car-making dream”?

On October 27, in a live broadcast event, Dong Mingzhu, chairman of Gree Electric, got a positive answer from himself when asked if he would provide Tesla with a chassis. Immediately, Gree Electric also officially confirmed that it will provide support for Tesla’s parts manufacturing.

At the same time, the official also stated that Zhuhai Gree Intelligent Equipment Co., Ltd. has provided equipment support to many new energy auto parts manufacturers around the world. It is reported that Zhuhai Gree Intelligent Equipment Co., Ltd. is a subsidiary of Gree Group. It was established in 2013 and is an intelligent equipment manufacturer integrating R&D, production, sales and service.

The cooperation between Gree Electric and Tesla is somewhat “unexpected and reasonable”. On the one hand, before this, the intersection of Gree Electric and Tesla does not seem to be much. But on the other hand, Gree Electric’s entry into new energy vehicles is nothing new.

The indissoluble bond between Gree and new energy vehicles

Looking back on Gree Electric’s car-making road, although it did not directly enter the field of vehicle manufacturing, Dong Mingzhu still led Gree Electric to enter the new energy auto parts market.

Among them, the two acquisitions completed by Gree had to be ahead of schedule. In 2016, at the shareholders meeting of Gree Electric Appliances, Dong Mingzhu wanted to acquire 100% of the shares of Zhuhai Yinlong at a valuation of 13 billion yuan, but was opposed by shareholders.

Immediately, Dong Mingzhu “borrowed debt investment” in his own name, paying 1 billion yuan out of his own pocket, and even pulled Liu Qiangdong and Wang Jianlin to jointly invest in Zhuhai Yinlong. Among them, Dong Mingzhu personally holds 7.46% of the shares, ranking the fifth largest shareholder of the company. After the completion of the shareholding, Dong Mingzhu continued to increase the shares, and by May 2017, he had become the second largest shareholder of Zhuhai Yinlong. In the same year, Zhuhai Yinlong changed its name to Yinlong New Energy Co., Ltd.

 On August 31 last year, Gree Electric obtained a 30.47% stake in Yinlong New Energy for 1.83 billion yuan through judicial auction and public bidding, plus the 17.46% stake previously held by Dong Mingzhu in his personal name. Yinlong New Energy officially became a holding subsidiary of Gree Electric Appliances.

According to the data, Yinlong New Energy is mainly engaged in the research and development, production and sales of lithium titanate materials, lithium titanate power batteries, core components of electric vehicles, complete electric vehicles, and electric vehicle charging equipment. Compared with other new energy companies, Yinlong is known for its lithium titanate battery technology, but this kind of battery technology route is not the mainstream.

Therefore, in February of this year, regarding Yinlong New Energy’s plan, Dong Mingzhu said that Gree Electric will not enter the field of new energy household vehicles for the time being, but will make urban sanitation vehicles and large buses because of the titanic acid of Gree Titanium New Energy Company. Lithium batteries have advantages in terms of safety.

In November last year, Gree spent another 3 billion yuan to acquire 410 million shares of DunAn Environment and became the controlling shareholder of DunAn Environment. Dunan Environment is a leading company in the global refrigeration component industry. Through the acquisition of Gree Titanium New Energy, Gree Electric directly took over the new energy vehicle industry chain facing the B-end market, and even cut into the hot “automobile fever” in the industry. Management system” and other new energy parts industry.

In addition, Gree Electric also set its sights on the charging pile. On June 23 this year, Gree established Gree Electromechanical Engineering (Xinzhou) Co., Ltd., mainly engaged in the sales of new energy vehicles, the sales of new energy vehicle battery swap facilities, the sales of charging piles, centralized fast charging stations, and battery leasing. To this end, the purpose of Gree Electric is also very clear: to ensure the independent control of core components, and to improve the layout of the industrial chain.

From Gree’s series of operations, it shows Gree’s ambition to enter the new energy vehicle track. Of course, as a company with electrical appliances as its core business, Gree has joined the new energy vehicle battle with such fanfare. The deep-seated reason behind it is to rely on the strong market behind it.

Gree urgently needs new “growth points”

According to data recently released by the China Automobile Association, in September, the sales of new energy vehicles were 708,000, a month-on-month increase of 6.2% and a year-on-year increase of 93.9%, with a penetration rate of 27.13%. From January to September, the cumulative sales reached 4.567 million units, a year-on-year increase of 1.1 times, and the penetration rate was 23.5%.

Among them, Tesla has played a “leading” role in the field of electric vehicles. Not long ago, Tesla released its third-quarter earnings report. The financial report shows that in the third quarter, 343,800 vehicles were delivered globally, a year-on-year increase of 42.48% and a month-on-month increase of 34.9%. In the first three quarters, a total of 929,900 vehicles were produced, and the sales volume was close to that of last year.

In contrast, the home appliance industry to which the Gree original track belongs seems to be a bit sluggish. Not long ago, the “2022 China Home Appliance Industry Semi-Annual Report” released by the National Household Appliance Industry Information Center showed that the sales volume of China’s home appliance market in the first half of this year was 360.9 billion yuan, down 11.2% from the same period. Although only the air conditioner category achieved a growth of 1.1%, it is still difficult to save the overall decline.

This may be the real reason why Gree Electric entered the new energy vehicle industry. On the one hand, the downturn in the home appliance industry has caused Gree Electric to seek new profit growth points. On the other hand, the new energy vehicle market is booming, especially Tesla holds 18% of the global electric vehicle market, helping Gree to expand into a larger market.

As the “leader” of the entire new energy vehicle industry, Tesla’s every move is attracting the attention of the public. Not long ago, Tesla’s “price reduction” and “a single stroke can affect the whole body” aroused the attention of the entire automobile industry. The 27.9% profit level of the automobile business is beyond the reach of many car companies. From the perspective of Gree Electric, relying on Tesla’s hot sales, it will be able to bring extremely considerable income to Gree Electric.

Since 2022, many home appliance companies such as Gree Electric and Midea have begun to shift the focus of research and development in the field of new energy vehicles from individual components to components, thereby expanding into a wide range of new energy fields. Whether Gree Electric can win this “battle” remains to be seen.