Competition in the new energy vehicle market intensifies

　　Our reporter Yang Zhongyang


　　Compared with previous years, the Spring Festival in 2024 is relatively late, which creates a rare golden sales period for car companies. Some car companies may speed up the pace of launching new products or launch limited-time promotions. Competition on the new energy vehicle track has become increasingly fierce, and the market elimination competition has accelerated.

New models are launched intensively

　　The first new car launch in 2024 was won by Xpeng Motors. On January 1, Xpeng Motors’ first MPV model, the X9, was launched, with a total of 4 configurations of the new car launched. This is the flagship model under Xpeng Motors' SEPA2.0 Fuyao architecture, and it is also the first super smart driving seven-seater model that breaks the boundaries of MPV.

　　"The Xpeng X9 is both a large seven-seater MPV and can be 'transformed' into a super-large four-seater SUV with one click. The driving experience is more comfortable than an MPV and more flexible than an SUV." He Xiaopeng, founder and chairman of Xpeng Motors, said, "Xpeng "

　　On January 5, Geely's flagship pure electric sedan Galaxy E8 was officially launched, with a starting price of 175,800 yuan. Although the top model reaches 228,800 yuan, the price of core products is less than 200,000 yuan. Reminiscent of the fact that the price of Ji Krypton 007, which was launched a week ago, is also down to earth. Industry insiders said that this means that Geely has regained the pricing power of domestic pure electric vehicles from "Bit".

　　In the Chinese automobile market, only two companies had the pricing power for electric vehicles in the past. One is Tesla, which controls the price of electric vehicles with its pioneering power and strong appeal in the global electric vehicle market. Any product that wants to enter the Model 3 and Model Y market must look at the faces of these two cars, and at the same time, beware of their "arbitrary" price adjustments at any time. The other company is BYD, which uses its highly vertically integrated low-cost industrial chain advantages such as batteries and electric drives to conquer cities and territories through price cuts and continuously expand market sales.

　　On January 7, the launch conference and delivery ceremony of Dongfeng Nano 01 was held in 100 cities. "The launch of Dongfeng Nano 01 is a redefinition of national cars and an advancement of national travel methods." Chen Meng, general manager of Dongfeng Nano Marketing Division of Dongfeng Passenger Car Sales Co., Ltd., said that Dongfeng Nano is positioned at 100,000 yuan level market, pay attention to the rigid needs of most ordinary citizens, use technology as the basis to upgrade national cars, and become a true "new national force".

　　On January 25, the BMW Group announced the launch of the new BMW 5 Series in the Chinese market. This is the eighth-generation BMW 5 Series in the world and the fourth-generation domestically produced. This time, the new BMW 5 Series "gasoline" (fuel version and electric version) are launched together, and "dual-axle" (standard wheelbase version and long wheelbase version) are launched simultaneously, with a total of 12 models. Among them, the starting model has the same price for gasoline and electricity, leading a new trend in luxury brand pricing.

　　"The new BMW 5 Series marks the entry of the best-selling BMW model into a new era of intelligence." said Gao Xiang, President and CEO of BMW Group Greater China. "With the launch of the BMW i5, the number of pure electric products the BMW brand provides to Chinese customers has increased. With model 7, the BMW Group’s pure electric products cover almost all major market segments.”

　　As of January 31, more than 10 new cars have been launched in the new energy vehicle market alone. "According to our incomplete statistics, there will be 202 new products on the Chinese auto market in 2024, including 152 new energy products, accounting for 75%." Changan Automobile President Wang Jun said.

The price war is difficult to calm down

　　While car companies are accelerating the launch of new products, price wars are also intensifying. In January alone, more than 16 car companies including Tesla, Ideal, Jikrypton, Leapmotor, Zhiji, and Xpeng have lowered the prices of certain models or launched limited-time cash discount promotion policies in the hope of gaining more sales. and market share.

　　It is worth noting that Li Auto, which rarely participates in price wars, has also joined the price reduction camp. On January 12, Li Auto officially announced a price cut, with all models reduced by 30,000 yuan. Among them, the starting price of the Ideal L7 is 286,900 yuan, which has dropped to less than 300,000 yuan for the first time since its launch.

　　According to terminal survey data from the National Passenger Car Market Information Joint Conference, the overall market discount rate for passenger cars in early January was approximately 20.4%. The industry generally expects that the automobile price war will continue in 2024.

　　"With the acceleration of the launch of new cars, the trend of market supply exceeding demand is difficult to change in the short term." Wang Du, assistant president of the China Automobile Dealers Association, believes that the price war in the auto market is just a symptom. Behind it is the oversupply and demand in the domestic auto market. Inadequate contradiction.

　　The China Association of Automobile Manufacturers predicts that my country's total automobile sales will be about 31 million units in 2024. Among them, the sales volume of passenger cars was about 26.8 million units, the sales volume of commercial vehicles was about 4.2 million units, the sales volume of new energy vehicles was about 11.5 million units, and the export volume was about 5.5 million units. Some experts said that after deducting the export volume of complete vehicles, there were only about 25 million cars sold in the domestic market, which was actually lower than the domestic car market sales in 2017.

　　Although most car companies did not meet their sales targets for that year in 2023, judging from the published data, many car companies still have aggressive sales targets for 2024. For example, Li Auto will challenge its sales target of 800,000 units in 2024, a year-on-year increase of 113%. Behind these aggressive sales targets is further involution.

　　At the same time, the falling prices of upstream raw materials for batteries have also created room for vehicle companies to adjust prices. The current price of lithium carbonate has dropped from nearly 600,000 yuan/ton at the end of 2022 to 100,000 yuan/ton. "Every time the price of lithium carbonate drops by 100,000 yuan/ton, the cost of electricity per kilowatt-hour can be reduced by 50 yuan." Zhu Jiangming, founder, chairman and CEO of Leapmotor, said that based on a 70-kilowatt-hour battery pack, it can save 17,500 yuan.

more competitive

　　"China's new energy vehicles are developing rapidly and on a large scale, but the entire industry is facing the problem of difficulty in making profits." An Qingheng, director of the China Automotive Industry Advisory Committee, said, "Currently, only Tesla, BYD, Ideal and Aian are among the new energy vehicles. 4 companies are profitable, and most new energy vehicle companies are losing money. This situation needs to be improved urgently, otherwise the prosperity of new energy vehicle development will be difficult to sustain."

　　How to solve the difficulty of making profit? Xu Changming, deputy director of the National Information Center, believes that expanding product market size and strengthening cost control are effective ways. Taking Tesla as an example, Tesla's total revenue in 2023 will reach US$96.773 billion, a year-on-year increase of 18.79%; net profit attributable to ordinary shareholders will be US$14.997 billion, a year-on-year increase of 19%; while Tesla's 2023 A total of 1.81 million new cars were delivered globally, a year-on-year increase of 38%. This means that its bicycle profit is still as high as US$8,285.6.

　　"Competition in the auto market will be more intense this year, but sales volume represents future opportunities." Zhang Junyi, managing partner of Oliver Wyman Consulting, said that companies will only have enough room to make profits if they reduce costs and expand scale if they have sales volume. In addition, facing the price war in the domestic automobile market, he suggested that automobile companies should speed up breakthroughs in overseas markets and improve their competitiveness in the international market.

　　Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, said that the automobile market will show slow growth in 2024. From a corporate level, on the one hand, we must make good products, and on the other hand, we must improve operating efficiency through reforms in order to increase profits.

　　"The next two years will be the most important stage of change in the automobile industry, and the competition will be fiercer than imagined." Li Bin, chairman and CEO of Weilai, said in the first internal letter released in 2024, "We will face the situation with stronger capabilities. Competitors are faced with more and more excellent products, more intense price wars, a more complex public opinion atmosphere, and a macro environment full of uncertainty. Every colleague must be mentally prepared, Give up illusions and face challenges head-on. While ensuring long-term investment in key core technologies, leading advantages in technology and products, and on-time and quality delivery, Weilai must ensure that sales and service capabilities can cope with fierce market competition, so that 'sales power' can be achieved as quickly as possible That translates into sales.”

　　Price wars and profitability difficulties are also intensifying the market elimination. At the beginning of January, there were market rumors that Gaohe Automobile, a new car-making force, had suspended its research and development work and its suppliers had stopped shipping. Although Gaohe Automobile quickly issued a statement denying it and saying that "operations are all normal," it has not completely dispelled external concerns. In fact, Gaohe Automobile has been suffering from sales problems since its establishment six years ago. Public information shows that Gaohe Automobile’s sales in 2021 and 2022 will be 4,237 and 4,349 vehicles respectively. Sales in the first 11 months of 2023 were only 4,265 vehicles. Sales are hard to see an improvement, investment funds are hard to land, and Gaohe's crisis is gradually emerging.

　　"At its peak, 300 companies lined up to apply for car-making qualifications, and 62 new car-making forces released new energy strategies; now only 17 new car-making forces have sales, and most of them have annual sales of less than 4 digits." Wang Jun predicts that as the intensity of market competition increases, the concentration of the new energy vehicle industry will increase rapidly. In the future, among the remaining 126 brands, the top 10 car companies will account for more than 85% of the share, and the remaining 116 brands will share the remaining If the market share falls to 15%, most car companies will close down and transfer, and the automotive industry is undergoing a major reshuffle. (Economic Daily)