Will the "price war" of new energy vehicles affect fuel vehicles?

　　Chinanews.com, March 1st (Chinanews Finance and Economics Ge Cheng) Faced with the "price war" initiated by Tesla, BYD can't help it?

　　According to media reports, BYD recently launched its first price cut this year.

In this regard, China New Finance and Economics verified the matter with the relevant person in charge of BYD, and the other party said that this is not an official price reduction, but a promotional behavior of individual dealers.

According to a BYD dealer in Beijing, at present, the discounts for different models in the store range from 1,000 yuan to 10,000 yuan, and some models also have a replacement subsidy of up to 10,000 yuan.

　　In 2022, BYD will replace Tesla, which has won the top sales for three consecutive years. How will the competition between "No. 1" and "No. 2" new energy car companies develop?

Data map: New energy vehicles.

Photo courtesy of Shanghai Customs

The "price war" of new energy vehicles may continue

　　At the beginning of 2023, Tesla took the opportunity to officially withdraw from the state subsidies for new energy vehicles, and took the lead in provoking a "price war" in the Chinese market, triggering more than a dozen car companies including Weilai, Xiaopeng, and Feifan. cut prices.

　　For Tesla, price cuts are undoubtedly a good means of promotion.

　　According to data from the Passenger Federation, Tesla’s domestic sales in January reached a record high of 66,000 vehicles, up 10.3% year-on-year and 18.3% month-on-month; BYD’s sales in January were 151,000 vehicles, up 62.4% year-on-year and down 35.7% month-on-month .

　　In the face of Tesla's price reduction competition, the price reduction of BYD dealers has released a signal-"price war" may start between the top two car companies in the world's new energy vehicle sales.

　　And some traditional car companies also choose to respond to market competition by cutting prices in the field of pure electric vehicles.

For example, FAW Toyota's bZ4X directly dropped 60,000 yuan, and Dongfeng Nissan's ARIYA Ariya discount + subsidy price reduction also reached 60,000 yuan.

　　The above approach does not mean that car companies have completely given up profits. Changes in raw material prices have opened up some room for price reductions for new energy vehicles.

　　According to the quotation of Shanghai Nonferrous Metals Network, the price of battery-grade lithium carbonate will reach its peak at the end of 2022, and the quotation per ton will exceed 600,000 yuan.

However, recently, the price of this material has continuously dropped below the two important thresholds of 500,000 yuan and 400,000 yuan.

On February 27, the average price per ton of battery-grade lithium carbonate had dropped to 392,500 yuan.

　　"Price reduction does not mean that the industry has entered a stage of weak demand. New energy vehicles are still in a stage of rapid growth, and large production will also better promote a balance between supply and demand." According to Dong Yang, chairman of the China Automotive Power Battery Industry Innovation Alliance, The meaning of "price war" is to seize the market.

Data map: Auto Show.

Photo by Liu Dong

New energy vehicles and fuel vehicles will also start a "price war"?

　　The price reduction of raw materials and the intensification of "price war" will allow new energy vehicles to replace fuel vehicles?

　　According to data from the China Association of Automobile Manufacturers, by 2022, the penetration rate of new energy vehicles in China will reach 25.6%.

This means that for every four new cars sold, one is a new energy vehicle.

　　Miao Wei, deputy director of the Economic Committee of the National Committee of the Chinese People's Political Consultative Conference, predicts that in 2023, the penetration rate of new energy vehicles in my country is likely to exceed 30%, reaching 9 million vehicles.

Nearly one-third of new cars may be new energy vehicles.

　　According to Ouyang Minggao, an academician of the Chinese Academy of Sciences, by 2023, the total amount of electric vehicles and power batteries will already be quite large, so the growth rate will decline in recent years.

At the same time, the proportion of plug-in hybrid and extended-range electric vehicles will increase, and the average battery loading and total demand growth rate of new energy vehicles will also decrease. The tense demand for lithium batteries will be greatly eased.

　　"In the long run, the global lithium resource reserves are sufficient and the recoverable amount continues to increase, and the battery material recycling industry will also usher in development opportunities." According to Ouyang Minggao's prediction, lithium prices will further return to 350,000 yuan per ton in the second half of 2023 - The rational level of 400,000 yuan, the more reasonable price balance point in the future may be around 200,000 yuan.

　　At present, the price of compact new energy vehicles has dropped to the range of fuel vehicles, below 100,000 yuan.

Industry insiders believe that if lithium prices drop further, new energy vehicles may directly start a "price war" with fuel vehicles.

　　Miao Wei believes that new energy vehicles are rapidly replacing traditional fuel vehicles, and an alternative relationship has formed between the two.

On the whole, there is no problem of overcapacity of new energy vehicles at present, and the real overcapacity is the production capacity of fuel vehicles.

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