The extended range market is growing rapidly
On October 13th, the fourth model under LanTu Automobile, LanTu Zhiyin, was officially launched. The new car comes in four versions, with prices ranging from 179,900 yuan to 236,900 yuan. Officially disclosed data shows that within 24 hours of the new car's launch, orders reached 8,126 units.
An interesting phenomenon is that while many car companies want to join the extended-range electric field, LanTu Zhiyin has only launched a pure electric version this time. Looking at the market trend in recent years, the sales growth rate of extended-range electric vehicles has been higher than that of pure electric models. Especially since 2023, the sales growth rate of pure electric models has plummeted, and extended-range models have become the main force of growth.
In response, Lu Fang, CEO of LanTu Automobile, said in an interview with Economic Observer Network: "We judge that pure electric vehicles will grow rapidly in the future. If you look at battery prices, compared to two years ago, battery prices are falling rapidly, and battery production capacity is also very abundant. Therefore, in the next two years, battery prices are expected to fall further. Once the battery price is lowered, with the rapid development of charging experience and battery technology, 'one high and one low' will make the experience of using pure electric vehicles very good."
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LanTu Automobile insists that range and charging issues have been resolved, and the pure electric experience will become better and better. The acceptance of pure electric vehicles among young Chinese consumers will also increase.
Contrary to the trend?
Since the explosive growth of new energy vehicles in 2021, the sales growth rate of extended-range cars has been higher than that of pure electric vehicles. According to statistics from the China Association of Automobile Manufacturers, from 2021 to 2023, the sales growth rate of extended-range models was 206%, 116%, and 173%, respectively. During the same period, the growth rate of pure electric models was 157.4%, 67.5%, and 24.4%.
Data from the Passenger Car Market Information Joint Conference shows that in 2023, the sales of extended-range vehicles reached 642,000 units, a year-on-year increase of 181%, which is the largest increase in the three mainstream new energy vehicle markets of pure electric, plug-in hybrid, and extended-range. In the first eight months of 2024, the sales of extended-range vehicles have reached 749,000 units, a year-on-year increase of 167%, accounting for 12% of new energy vehicles. During the same period, the sales of pure electric vehicles increased by 39%, and the sales of plug-in hybrid vehicles increased by 90%. The sales growth of extended-range models is four times that of pure electric sales growth.
LanTu Automobile's first model, LanTu FREE, launched both extended-range and pure electric versions. The car was launched in June 2021. LanTu Automobile has thus become one of the earliest car companies to launch extended-range vehicles in China after Ideal Automobile.
But why does LanTu Automobile want to launch a pure electric vehicle at this time? LanTu Automobile said that when users buy pure electric models, their biggest concerns are mainly focused on range and charging. LanTu Zhiyin can solve these two pain points. The car is the first to carry a full-stack self-developed full-domain 800V high-voltage silicon carbide platform, bringing a maximum range of 901 kilometers. In terms of charging speed, LanTu Zhiyin is equipped with 5C super fast charging technology, which can replenish 515 kilometers of range in 15 minutes, and charging from 20% to 80% only takes 10 minutes.
In addition to vehicle technology, LanTu Automobile has also officially released an energy solution - VOYAH POWER 168. Among them, "1" represents 1 super APP, 1,000 super charging stations, 10,000 super charging piles, and more than 1 million energy resources; "6" represents a 6-kilometer super energy circle in the main urban area; "8" represents 8 energy ecological scenarios: LanTu super charging, public charging, home charging, emergency energy replenishment, contactless charging, V2G, private pile sharing, and battery cascade utilization.Lantu Automobile is collaborating with partners to jointly promote and build a "thousand stations and ten thousand piles" ultra-fast charging network that covers the entire country. By 2026, Lantu will have deployed 1,000 ultra-fast charging stations and over 10,000 ultra-fast charging piles nationwide, initially establishing a 6-kilometer super energy replenishment circle in the main urban areas of core cities.
At the current stage, ultra-fast charging piles are only a minority in the electric vehicle energy replenishment chain. The ultra-long endurance version of Lantu Zhiyin only exists in the top-configured model, so it is still too early to claim that issues such as short range and slow charging have been resolved.
Strategizing for the Future
Beyond the range and charging issues, automakers must consider various factors such as cost and profit when choosing which type of powertrain to launch.
Regarding whether Lantu Zhiyin only launched the pure electric version because it has higher profits, Shao Mingfeng, General Manager of Lantu Automobile Sales Service Co., Ltd., stated, "Currently, the pure electric version does not have higher profits than the extended-range version." Shao Mingfeng cited an example, saying that the best-selling model of Lantu Automobile is the Lantu Dreamer. The pure electric version of this model, due to its large 108.7kWh battery, has a higher cost than the extended-range version.
Against the backdrop of a strong growth trend in the extended-range market, Lantu Zhiyin's decision to only launch a pure electric version may be due to Lantu Automobile's consideration as a member of the "national team" to take the lead in returning to the main track of pure electric vehicles.
In the 2.0 version of the "Technical Roadmap for Energy-saving and New Energy Vehicles" (hereinafter referred to as the "Roadmap") issued in October 2020, by 2035, the annual sales volume of China's energy-saving vehicles and new energy vehicles will each account for half, traditional energy-powered passenger cars will all be converted to hybrid power, thereby achieving a comprehensive electrification transformation of the automotive industry.
In terms of new energy vehicles, the "Roadmap" stipulates that for pure electric and plug-in hybrid vehicles (including extended-range vehicles), by 2035, China will form an independent and complete industrial chain. The technical level of pure electric and plug-in hybrid vehicles of Chinese brands will be synchronized with the international level, new energy vehicles will account for more than 50% of the total vehicle sales, and pure electric vehicles will account for more than 95% of new energy vehicles. That is, the future policy leaves less than 5% of the market for plug-in hybrid vehicles.
Shao Mingfeng told the Economic Observer Network: "Pure electric and hybrid extended-range are still different market segments. From the development trend, pure electric will still occupy a larger market share, especially for relatively smaller cars. Lantu needs to build user recognition, and we can do well in pure electric new energy. At the same time, our internal research and development, marketing, and energy replenishment systems also need to strengthen this capability, otherwise it will be difficult in 2027 and 2028."
"Hybrid and extended-range have always been our strengths, and we will continue to maintain them. Currently, Lantu's hybrid extended-range accounts for 90%, but it can be seen that the market proportion of pure electric is still relatively large. We need to increase this proportion and achieve volume growth. Essentially, users still need the experience of electric vehicles." Shao Mingfeng added.Another insider at LanTu Automobiles suggested that the company has already mastered range-extending technology and can launch range-extended versions at any time in the future, depending on market conditions.