Why Did Chery Invest in "New Fuel" Amidst the Overwhelming Presence of Electric Vehicles?

As the entire industry focuses on the rapid advancement of electrification, Chery has thrown out a "strategic bomb" that provokes deep reflection.

Recently, Chery officially launched its "China New Fuel" strategy, announcing with great emphasis that it will significantly enhance the efficiency and experience of traditional fuel vehicles through a series of technological innovations.

Zhang Guozhong, the Executive Vice President of Chery Automobile, stated: "There is no outdated form of energy, only outdated technology and experience." The "China New Fuel" strategy is based on four core standards: "New Technology," "New Intelligence," "New Safety," and "New Pattern," aiming to reshape the value system of fuel vehicles.

This is not merely a declaration of a simple technological upgrade, but a clear proclamation for fuel vehicles against the seemingly irreversible tide of electrification. It profoundly questions the industry: on the track towards an electric future, have we prematurely abandoned the evolutionary potential of fuel vehicles?

Chery's layout this time not only demonstrates its confidence in its own technical foundation but also strongly rectifies the current diversified technological routes, indicating that the Chinese automotive industry may be entering a new stage of rational competition characterized by "walking on multiple legs."

What is new about the "new fuel"?

The "new fuel" concept proposed by Chery is by no means a simple marketing gimmick; behind it is a systematic engineering philosophy aimed at breaking through the ceiling of traditional fuel technology.

Understanding its "new" aspects is key to gaining insights into the strategic value of this move.

Chery Automobile is one of the few domestic independent brands that have achieved full-stack self-research and self-production of the "three major components" in new technologies. Its new generation Kunpeng power engine has accumulated over 3.1 million installations worldwide. The second-generation Kunpeng 8AT engine is China's independently developed integrated hardware and software 8AT product, and the AWD Snow Leopard four-wheel-drive system balances performance and cost-effectiveness.

At the new intelligence level, Chery Automobile has applied the Falcon Intelligent Driving Assistance System to fuel vehicles. This system enhances driving smoothness while helping to reduce fuel consumption. Combined with the inductive smart cockpit, it provides users with a more interactive intelligent driving experience.

In the new safety domain, Chery Automobile has invested over 100 billion yuan in resources to create the Rock Body Structure, equipped with 360° surround airbags. Relying on world-class manufacturing technology, it has built a comprehensive safety protection system, providing multi-faceted protection for users' travel.

In terms of the new pattern, Chery Automobile has entered the ranks of the world's top 500 companies, with its growth rate ranking among the top on this list. Its products are sold in over 120 countries and regions worldwide, with an average of 1 out of every 5 Chinese cars exported being from Chery. It demonstrates a leading advantage in industry competition, pricing systems, and market growth, gradually establishing a new structure in the global automotive market.

Why is Chery playing the "fuel card" at this time?

In the context where "ALL IN" electrification has almost become the correct transformation path for traditional car manufacturers, Chery's move can be seen as a precise strategic positioning and risk hedging.

Behind it lies a profound insight into the market, industry, and one's own advantages.

Despite the impressive growth in sales of new energy vehicles, as of now, fuel vehicles still hold a significant share of the Chinese automotive market. This vast "fundamental" market is the result of countless real users making practical choices based on usage scenarios, charging conditions, budget, and consumption habits.

Chery's "new fuel" strategy precisely targets this "silent majority." It does not require educating users to change their habits, but instead offers a significantly upgraded experience of "more for the same price" based on the familiar fuel cars. This is undoubtedly a vast blue ocean market that has been somewhat overlooked by mainstream opinion.

Chery has a deep technological foundation and a large R&D and manufacturing system in the field of traditional powertrains. Fully transitioning to pure electric means overturning these long-standing advantages and competing on a new track with a host of new forces and technology companies, posing a significant challenge.

On the other hand, by continuing to delve deeper into its area of expertise and achieving technological breakthroughs through "new fuel," it can maximize the utilization of existing production capacity and supply chain advantages to control costs, while also creating a differentiated product moat that sets it apart from pure electric competitors.

This is a "leveraging strengths and avoiding weaknesses" strategy based on its own resource endowments, which helps to stabilize its fundamental position in fierce market competition and to open up a second growth curve.

Chery is a leading enterprise in China's automobile exports, and its great success in overseas markets largely depends on fuel models that are technologically stable, durable, highly adaptable, and free from charging anxiety.

In many overseas markets, especially in developing countries, the power infrastructure is still underdeveloped, and the acceptance of pure electric vehicles is limited. Actively developing and exporting "new fuel" vehicles not only consolidates and expands Chery's leading position in overseas markets but also serves as a "new technological business card" for the Chinese automotive industry going abroad.

From a more macro perspective, mastering advanced fuel technology is an important component in ensuring national energy security and technological autonomy and control amid complex global geopolitics.