Shulou(Shulou.com)11/24 Report--

/ tr. by Wang Lin

Chi Jun hesitated a little. He recently decided to buy a Xiaopeng P7, but when he went to consult Xiaopeng car sales, he was told to wait. "are you in a hurry to use the car? if you're not in a hurry, you can wait for 3 months," the salesman told him. He asked whether the sales would reduce the price in the future. The other party's attitude is: the probability is yes.

The discount range of Xiaopeng P7 has now reached about 30,000 yuan, which is almost the largest in history.

Tesla has cut prices four times since October last year. This directly contributed to its record of selling 66000 vehicles in January and once again made Musk the richest man in the world with a fortune of $179 billion.

Xiaopeng, Mengjie, Zero run, Lantu and other new car-building forces have followed, especially the models in the same price space as Model Y and Model 3, including but not limited to cash, financial subsidies, time-limited incentives, and so on.

Car price reduction is nothing new, it's just a common sales strategy. However, the price reduction strategy of new energy car companies does not seem to do much to boost sales. This past January, most new energy car companies handed in an extremely poor start to the year. More than one new energy car seller has expressed stressful concerns to Tech Planet.

For most of the new energy car companies whose profit indicators are still negative, price cuts have undoubtedly fallen into a vicious circle when they can not rely on technological breakthroughs to achieve cost reduction. The thornier question is, if we do not rely on price cuts, what will we use to impress consumers?

Who is reducing the price? Who dropped the most? If the CEO of Wei Xiaoli, the new force of car building (Weilai, Xiaopeng, ideal car), is the most anxious recently, it may be he Xiaopeng. The launch of the flagship new car G9 has caused a series of problems such as Xiaopeng's chaotic product line and unclear marketing strategy. Brand image has a direct impact on sales. Xiaopeng, which focuses on self-driving, delivered 5218 units in the first quarter of 2023, almost 1/3 of the ideal car.

Unlike the ideal car, which insists on not reducing prices, Xiaopeng's models G3i, P5 and P7 all begin to reduce prices, ranging from 20, 000 to 36000. After the price cut of Tesla Model 3, he directly grabbed the market share of Xiaopeng P7, which is one of the reasons why Xiaopeng handed over the worst report card in history. In order to increase sales, but also to clear inventory (the new P7 is about to be unveiled), Xiaopeng had to cut prices.

In 2022, only 76000 cars were sold, which began to cut prices earlier than Xiaopeng. The question world chooses to reduce the price of M5EV and M7, which sell less, with an overall range of 28800 ~ 30,000 yuan. After the price reduction, the boundary M7 has fallen below 300000 yuan. It is more competitive than Tesla Model Y in terms of price.

Subsequently, Zero run and Lantu, Ean also joined the army of price reduction. What is most worth mentioning is Feifan. As a "major strategic innovation project" of SAIC, Feifan Automobile came up to bid Tesla, but its sales were dismal.

Recently, Feifan announced the adjustment of the value system and launched the R7 brand-new screen dominating product line. After the configuration adjustment, Feifan R7 has become the only medium-and large-scale luxury pure electric SUV within 200000 yuan.

Even BYD, the benchmark for new energy vehicles, is no exception. On February 10, Qin PLUS DM-i, BYD's main model, released 2023 champion models, with a price reduction of 1.2-18000 yuan in the case of improved configuration, of which the leading pricing of the entry-level model 55km dropped to 99800 yuan, falling below 100000 for the first time.

A new energy car KOL commented that BYD's "Qin, Song, Han and Tang" models are all facing changes this year, which has foreshadowed BYD's style of play, with the new model adding and lowering the price, while the old model is going to have a fracture. In a group of BYD cyclists, interested users will pop up from time to time and ask questions such as "how much can seals fall?"which is more recommended by Song or Tang?"

According to the analysis of the Federation, sales growth will be a serious problem after the delisting of the new energy policy in 2023. Price reduction is one of the ways to ease the pressure on sales.

Is the price reduction passively following Tesla, or is it due to the decline in raw materials? The reduction in car prices is often due to the reduction in manufacturing costs.

"the price range of car companies participating in the price war is basically within Tesla's price range, and most of them are passively reducing prices," a supplier told Tech Planet. Tesla can still maintain high profits after the price reduction, but in China, except for ideal cars and BYD, most of the others are negative profits, manufacturing costs have not been significantly reduced, more passive participation.

But the cost of raw materials is indeed falling significantly, especially lithium carbonate, the core material used in power batteries. The price of lithium carbonate is expected to fall to 350000-400000 yuan per ton or even lower in the second half of this year, a battery industry source told Tech.

The main reason is overcapacity. In order not to be choked by raw materials, Tesla and Xilai and other car companies have bought mines. Battery manufacturers are no exception. According to GGII incomplete statistics, the planned investment of the four main materials of lithium power in China in 2022 is more than 500 billion yuan, and the number of production expansion projects is 156.

Lithium carbonate has been falling since December last year. Tech Planet inquired about Shanghai Nonferrous Metals Network and found that as of 12:00 at noon on February 17, the price of lithium carbonate had reached 431000 yuan, and the downward trend did not stop. This figure is nearly 30 per cent lower than last year's peak of 600000 yuan per ton.

An employee in charge of the supply chain of new energy vehicles told Tech that the current situation is surplus, battery factories and material factories are surplus. Some organizations estimate that the power battery capacity needed by China's new energy market will be about 1000GWh-1200GWh by 2025, while the current plans, including battery factories, vehicle factories and other cross-border enterprises, have reached 4800GWh.

If Tesla is the driving force, then overcapacity exacerbates the fall in prices. The fall in raw material prices eventually passed on to battery manufacturers.

According to 36 krypton, Ningde Times has recently taken the initiative to promote a "lithium mine rebate" program to car companies to reduce battery prices. The plan is not aimed at all customers, but for a number of strategic customers, such as ideal Automobile, Lilai Automobile, Huawei, Polar Krypton and so on. The core provision is: in the next three years, the price of lithium carbonate for some power batteries will be settled at 200000 / tonne. At the same time, the car companies that signed the partnership need to commit about 80 per cent of their battery purchases to Ningde Times.

"if the mainframe factory reduces the price, the battery factory will become the target of public criticism if it does not reduce the price. Only by actively reducing the price and locking the order can the production capacity be maintained." A person in the battery industry commented on the behavior of the Ningde era. To some extent, they are a community of interests.

'The current situation is that no matter how you plan, overcapacity is already a fact, and it will be even more serious after this year,'a Xilai auto employee told Tech. In the future, Tesla's catfish effect will become stronger and stronger, while the advantages of the industrial chain of domestic traditional car companies will bring more and more pressure on the cost control brought by the new forces.

The cruel knockout stage has just begun with the improvement of advanced manufacturing technology and excellent supply chain management capabilities, which will eventually lead to a decline in vehicle costs. Tesla is typical in this respect. Tesla has been cutting prices since 2017, along with falling costs, and although the average selling price of electric cars has halved, its operating profits have continued to rise. In 2022, its operating profit margin was 16.8%.

According to the profit standard, Tesla is gradually transitioning from a manufacturing enterprise to a consumer goods enterprise and finally to a technology enterprise.

A person in the battery industry told Tech that the entire powertrain accounted for more than 60% of the vehicle cost. In the third quarter of last year, Tesla's Texas factory began mass production of 4680 batteries. The overall energy density of the battery is increased by 5 times, and the battery life capacity is increased by 16%.

According to Musk, the use of 4680 batteries, combined with improvements in materials and vehicle design, can reduce production costs by up to 54 per cent.

Tesla sold his bike at 356000 yuan in 2022, an increase of 18.6% over the same period last year. This year, they aim to sell bicycles at an average price of $47000, or 323000 yuan. This means that Tesla's continuous price reduction has become inevitable.

From the perspective of market share, Tesla and BYD are the most benchmarking enterprises in the new energy market.

Although BYD has repeatedly denied its full-year sales of 4 million in 2023. But according to an expert summary circulated online by Tech Planet, BYD aims to sell 4 million cars externally and 4.8 million internally this year.

BYD has planned production capacity for it, with an overall planned capacity of more than 4 million vehicles at 10 production sites, which means that BYD's strategy this year is to use price cuts to hit sales frantically to maximize production capacity.

Tesla adheres to the cost pricing strategy and there will be price adjustments every year, but not many other new energy car companies have followed up in the past. In 2022, great changes have taken place in the entire new energy market, with the penetration rate exceeding 20% three years ahead of schedule. At the same time, there are more and more players, and the seats on the monthly sales rankings have to be reshuffled.

In 2005, GM began to cut prices to clear inventory and block competition from Toyota, selling a total of 550000 cars in June, its biggest monthly sales in its 19-year history, rapidly dwindling inventories and empty parking lots. The war was remarkable, but it cost GM nearly $1 billion, including advertising and subsidies.

This year's new energy vehicles in order to resist Tesla and BYD, it is difficult to rule out the possibility of following the old path of GM. Because selling the product is the last step in the commercial closed loop.

In an interview with China Entrepreneur at the beginning of the year, when asked about the competition in 2023, Li Xiang, the founder of ideal car, who is still in the lead in sales, replied, "I think the three years from 2023 to 2025 are extremely cruel knockout stages." because I don't think we need that many companies. "

There is no doubt that the tragic war for new energy vehicles in 2023 has just begun.

This article is from the official account of Wechat: Tech (ID:tech618), by Wang Lin

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