With the official withdrawal of state subsidies for new energy vehicles from the historical stage, many automobile enterprises have adjusted their sales strategies. The car companies represented by Tesla, Interworld, Xiaopeng and GAC Toyota lowered the price of their products. At the same time, BYD, Volkswagen, Renault and other car companies said that they would not cut the price. In 2023, the price system of new energy vehicles will still be in dynamic change.
Visual China
When the state subsidy for new energy vehicles officially withdrew from the historical stage, and when all parties hoped that new energy vehicles could carry the banner of consumption recovery, many automobile enterprises began to adjust their sales strategies, and new energy vehicles entered an active period of price adjustment.
Tesla took the lead in releasing a "big move" to reduce prices. It is understood that the price of Tesla Model 3 rear drive version will be reduced by 36000 yuan, the price of Model 3 high-performance version will be reduced by 20000 yuan, and the price of Model Y will be reduced by 29000 yuan to 48000 yuan. The overall price reduction is large.
According to the data released by the China Association of Automobile Manufacturers, in January this year, the production and sales of new energy vehicles fell 6.9% and 6.3% respectively year on year. Some analysts believe that January and February are the off-season for car sales, while the news that the "national subsidy" for new energy vehicles was withdrawn this year led to some users' early consumption in December last year, so the production and sales data at the beginning of the year was slightly bleak.
Facing the same challenge, different car companies have made different choices. On the one hand, enterprises such as Wenjie, Xiaopeng and GAC Toyota responded quickly to Tesla and lowered the price of their products, while automobile enterprises such as Volvo, GAC Aian and Wuling reduced the cost of purchasing cars for users through delivery incentives, insurance subsidies and other means; On the other hand, there are also BYD, Volkswagen, Renault and other car companies that said "no price reduction".
Should New Energy Vehicles Fight Price War
Tesla's price cutting banner seems to have an immediate effect. According to the data compiled by CMBI, about a week after the price reduction was announced, Tesla's daily average sales in China increased by 76% over the same period in 2022, and more than 10000 vehicles were sold in less than a week. However, this sudden price reduction also made some owners who had already collected the car dissatisfied.
In this regard, Elon Musk, CEO of Tesla, responded in a recent financial report conference call: "Price is really important. Many people want to buy Tesla cars, but they can't afford to buy them." He said that the price cut did have an impact on ordinary consumers. In January this year, Tesla's market demand was about twice the output.
A Tesla insider told the reporter that there are many reasons for Tesla's price reduction, including many engineering innovations. "The company has always adhered to the cost pricing principle, and this price reduction is also a decision based on the change of cost."
It is worth noting that Tesla's latest financial report shows that in 2022, Tesla will achieve revenue of 81.462 billion dollars, an increase of 51% year on year; The net profit was US $12.556 billion, up 128% year on year, and the operating profit margin reached 16.8%.
The financial report emphasized that although the average selling price of Tesla products has halved in the past five years, thanks to the introduction of lower cost models, the construction of more efficient local chemical plants, the reduction of vehicle costs and operating leverage, the company's operating profit margin has continued to rise, from about - 14% to about 17%.
Yang Xiaolin, a senior auto media person and auto industry analyst, believes that the price cut will amplify Tesla's "catfish effect". "If auto companies are worried about losing market share, they have to take various measures to stimulate sales, and price reduction is the most effective way."
However, price reduction is not the only option for new energy vehicle enterprises at present. Not long ago, facing the expiration of the subsidy policy for new energy vehicles and the rise in the price of battery raw materials, BYD chose to raise the price slightly. According to the statistics of the Passenger Car Market Information Joint Conference, Tesla's sales volume in January is still the second largest in the new energy vehicle market. In January, BYD's wholesale sales of new energy passenger cars reached 150164, continuing to be the sales champion.
According to the analysis of the research report of Shengang Securities, in the face of the withdrawal of subsidies for new energy vehicles, Tesla, Mercedes Benz and other foreign funded car companies chose to cut prices to increase market share. Self owned brands with good market performance can cope calmly to ensure their own profits. However, for auto companies whose sales volume is lower than expected or who are still committed to expanding market share, they still dare not raise prices lightly at this stage.
According to foreign media reports, the chairman of the management board of Volkswagen Group, Mr. Obemu, recently said that Volkswagen would not offer discounts to electric vehicles in order to fight against Tesla's price cut.
"We have a clear pricing strategy, focus on reliability, and believe in the strength of our products and brands." Obemu said that Volkswagen hopes to become a global leader in the field of electric vehicles, but should achieve this goal through profit growth.
There is still a long way to go to stabilize the price system
In addition to making users' psychological gap too large and hurting their brand image, the sharp price reduction of new energy vehicles may also cause a "domino effect" in the second-hand car market and the power battery recycling market.
"If the price of the product is reduced by 10% or more within a week, the residual value will be affected and existing customers will be hurt." Bai De, an independent auto commentator, believes that, considering that the number of new energy vehicles in the country has exceeded 13.1 million, how to keep the price of the product stable will be one of the most concerned issues for the majority of users. He said that at present, the second-hand car market of new energy vehicles is not active enough and the product hedging rate is not high. One important reason is that the cost of power batteries fluctuates greatly and the price of new cars fluctuates.
Yang Xiaolin believes that with the rapid development of electrification and intelligent technology, the upgrading of new energy vehicle batteries, intelligent auxiliary driving and human vehicle interaction and other configurations is faster, which will easily lead to a new car falling behind. In addition, with the continuous adjustment of subsidy policies and enterprise strategies, the price system of new energy vehicles is almost always in dynamic change.
Yang Xiaolin concluded that whether it is a new upstart like Tesla or a traditional luxury car brand like Mercedes Benz and BMW, the price of new energy vehicles fluctuates greatly, and the "official price cut" of tens of thousands of yuan will undoubtedly directly affect the valuation of used cars.
At the same time, he said that as the supply chain of automobile chips, power batteries and other products resumed full operation, the supply and demand relationship in the market changed, and the new energy vehicle market ushered in a price war that was almost inevitable. "Only through such full and even cruel competition will a real strong person be born who can control the cost of the industrial chain and dominate the market trend."
Baide told reporters that the price of electric vehicles will be impacted several times in the foreseeable future due to the constant changes in power battery costs, production efficiency and other factors. Auto enterprises must strengthen their comprehensive strength and rationalize the upstream and downstream of the industrial chain to ensure stable product prices and enhance profitability.
Cui Dongshu, secretary-general of the Joint Conference on Passenger Vehicle Market Information, analyzed that in 2022, China's new energy vehicles will advance by leaps and bounds, and the penetration rate of new energy passenger vehicles will reach 27.6%. After the withdrawal of the "national subsidy" in 2023, the new energy vehicle market will face a new situation, and the market will show the characteristics of slow growth and return to a steady growth state.
In fact, the withdrawal of the "national subsidy" not only means that the new energy vehicle industry is slowly maturing, but also press the start button for a new round of layout of each vehicle enterprise. Whether the price rises or falls, when new energy vehicles can really compete with traditional fuel vehicles in a positive way, and when the new energy second-hand car market is gradually improving, the Chinese car market and even the global auto industry will usher in a new round of survival of the fittest.
