How many hurdles do new energy vehicles have to overcome to “grow from big to strong”?
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At the end of March, the official launch of Xiaomi cars attracted a lot of attention and once again stirred up the domestic new energy vehicle market. As the world’s largest new energy vehicle consumer market, my country’s new energy vehicle industry is accelerating its reshaping, with the entry of new forces and the exit of old brands intertwined.
Many car company leaders and industry experts believe that in the face of the new market structure, the new energy vehicle industry has both opportunities and challenges. At present, it is necessary to continue to expand the level of internationalization, improve the industrial chain layout, accelerate the formation of economies of scale, and do a good job in “scientific and technological articles” “, maintain the “acceleration run” in the “second half” of industry development, and continuously consolidate and expand my country’s new energy vehicle development advantages.
Car companies: Price war is an inevitable process of market competition
On the evening of March 28, Xiaomi Motors officially released its lowest configuration model with a price of 215,900 yuan and the highest configuration model with a price of 299,900 yuan, adding another “fire” to the already fiercely competitive new energy vehicle market.
Since the beginning of this year, competition in my country’s new energy vehicle market has intensified. A large number of new vehicles have been launched. Many new energy vehicle companies such as BYD, Geely, Xpeng, Changan, and Wuling have lowered the prices of their brands. Prices have dropped from a few thousand yuan to tens of thousands of yuan. etc., BYD even lowered the minimum selling price of two of its models to 79,800 yuan, opening a new stage of “lower electricity than oil”.
According to relevant brokerage statistics, since this year, the average price of 12 “participating” car companies such as BYD has dropped by 11%, while the average price of A-class and B-class cars has dropped by more than 30,000. Major automobile brands have made price adjustments to further consolidate their market share, subjecting the passenger car market to a new round of price competition.
The reporter visited Xiaomi, BYD, Jikrypton, NIO and other new energy vehicle stores in Beijing and found that many consumers checked and asked about the price, cruising range, intelligence level and other issues in the store. A consumer told reporters: “Now the price of new energy vehicles has been falling. I have been waiting for it since last year. I don’t know if I should wait any longer. Maybe I can still catch something.”
Faced with the trend of price reductions, some industry experts interviewed believe that price reductions are driven by technological progress and are also the result of accelerated competition in the market.
On the one hand, with the advancement of new energy vehicle technology and the optimization of the battery supply chain, vehicle production costs have gradually decreased, providing room for price reductions. For example, as one of the main raw materials for electric vehicle power batteries, the rise and fall of lithium carbonate prices affects the prices of new energy vehicles to a certain extent. According to data from platforms such as Shanghai Nonferrous Metal Network, the average market price of battery-grade lithium carbonate is already around 120,000 yuan per ton, down by more than half from the same period last year.
On the other hand, the intensified competition among industry enterprises has also caused the market to accelerate iteration. An Conghui, President of Geely Holding Group, believes that price competition is an inevitable process for the development of the new energy vehicle industry. “In the era of traditional automobiles, many companies survived through competition and reshuffle. Now that the automobile industry has entered the new energy era, competition has become more intense, and we must face it actively and correctly,” he said.
Li Bin, chairman of NIO, believes that the current sales of new new energy vehicles in China are close to half of the total domestic sales. At this stage, it is in the transition period between oil and electricity. Various car companies are under tremendous pressure and will engage in price games in order to survive.
“I think the price war at this stage is very normal and a normal business process. But in the future, the development of automobile companies must return to the level of value creation, bringing users higher cost performance and better functional experience.” Li Bin said.
BYD Chairman and President Wang Chuanfu said that the new energy vehicle industry has entered a fierce knockout stage. “China’s new energy vehicles have experienced 20 years of cultivation and growth and have entered a cyclical adjustment stage. Enterprises need to form economies of scale and brand advantages as soon as possible.”
The industry must face three major challenges as it “moves towards the future”
In 2023, my country’s new energy vehicle penetration rate will reach 31.5%, and it will only take four years to go from 5% to over 30%. The National Passenger Car Market Information Joint Conference predicts that this proportion will reach 40% in 2024.
While the new energy vehicle market is developing rapidly and consumer acceptance is gradually increasing, the market is also accelerating the “shuffle”. Some car companies such as Gaohe Automobile and WM Motor are in a deadlock, while Xiaomi Motors has entered the car manufacturing market with a high profile. Half sea water, half fire. Behind the “price war”, challenges and opportunities intertwined with multiple factors coexist.
First, the “new channel” out to sea encountered “headwinds”. Affected by geopolitics, many countries have successively adjusted their subsidy standards for electric vehicles and continued to raise the threshold for importing new energy vehicles. New energy vehicles have encountered “headwinds” when going overseas.
Secondly, technology in some areas still needs breakthroughs. Shan Zhongde, Vice Minister of the Ministry of Industry and Information Technology, publicly stated at the recently held China Electric Vehicles 100 Forum that from a domestic perspective, more research needs to be done on automotive chips and basic software, as well as on the low-temperature adaptability, safety, and charging convenience of new energy vehicles. Still need to continue to improve.
In addition, the fittest will survive and the market concentration needs to be improved. Relevant data shows that my country’s new energy vehicle production and sales will both exceed 9 million units in 2023, ranking first in the world for nine consecutive years. However, the product aggregation of new energy vehicles is still relatively scattered.
Data shows that there will be more than 400 new energy models on sale in 2023, but the average monthly sales will be only 1,500 vehicles. Of the hundreds of passenger car brands, only a few are profitable, and there is a long way to go for sustainable development. “The cost of new energy vehicles is high and the scale effect has not yet fully emerged. This is a problem that must be faced to maintain sustainable development.” said Wang Jun, President of Changan Automobile.
Promote new infrastructure and consolidate the development advantages of new energy vehicles
As a pillar industry, the automobile industry has a huge impact on the national economy. At present, relevant departments in my country are stepping up their layout and promotion to consolidate and expand the leading advantages of the new energy automobile industry, and to assist the high-quality development of my country’s new energy automobile industry in many aspects.
“Trading old for new” is a hot word in the consumer market these days. As the transformation of old and new driving forces accelerates, my country’s automobile market has also entered an “era of equal emphasis on stock and increment” from an “incremental era”, and there is huge potential for replacing old vehicles with new ones.
Vice Minister of Commerce Sheng Qiuping said that the trade-in of old cars for new ones will be carried out in depth and fiscal and financial support will be increased. At the same time, we will promote the sharing of vehicle data, establish an information platform for the entire life cycle of vehicles, and accelerate the activation of the second-hand market for new energy vehicles.
“We found that there are obstacles in the transaction of second-hand new energy vehicles. The main reason is that there is no authoritative system for testing and valuation systems. We strive to put the valuation and testing system for new energy vehicle batteries online as soon as possible.” Sheng Qiuping said.
Aiming at the problems of overcapacity and redundant construction that may be caused by the rapid development of the automobile industry. Shan Zhongde said that government departments will improve the policy system, continue to optimize the industrial structure and ecology, strengthen industrial overall layout and investment guidance, curb blind investment and duplication of construction, accelerate the introduction of electric vehicle production access management regulations, and improve the exit mechanism for backward enterprises. . “It is necessary to increase industrial concentration, guide traditional automobile companies to accelerate transformation based on their own technology, channel advantages and open cooperation, severely crack down on unfair competition, and maintain a fair and just market order,” he said.
If the domestic new energy automobile industry wants to “accelerate its development”, it needs to “work for a long time” in terms of improving infrastructure levels.
According to data from the Ministry of Housing and Urban-Rural Development, my country will add 850,000 parking spaces in 2023 through the renovation of old communities, and another 50,000 old communities will be renovated this year. Dig stock, expand growth, promote sharing, increase parking spaces, and install charging piles to make parking and charging convenient for the masses.
“We must vigorously and orderly promote the construction of new urban infrastructure, use smarter roads to support smarter cars, and work together to create new investment and consumption with more new application scenarios.” said Qin Haixiang, Vice Minister of the Ministry of Housing and Urban-Rural Development.
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