Official price increase! Multiple brands involved

Subsidies for new energy vehicles will further decline in 2022

Some new energy vehicle companies have announced price increases

The latest addition is BYD

Earlier, Tesla and Xiaopeng Motors

Nezha Automobile, GAC Eian and other new energy vehicle companies

Price increases were also announced

A number of car companies announced price increases

On January 21, BYD officially announced that due to the sharp rise in raw material prices and the decline of new energy car purchase subsidies, BYD Automobile will adjust the official guidance prices of new energy models related to Dynasty Network and Ocean Network, ranging from 1,000 to 7,000 yuan. The price adjustment will take effect from February 1, and customers who have signed up for the deposit before this time will not be affected by the price adjustment.

According to BYD, the price was mainly affected by the sharp rise in raw material prices and the decline in subsidies for new energy car purchases.

In fact, the problem of rising raw material prices has plagued many car companies. In addition to BYD, new energy vehicle companies such as Tesla, Xiaopeng Automobile, Nezha Automobile, and GAC Aean have also previously announced price increases.

Tesla announced on December 31, 2021, that the rear-wheel drive versions of the Model 3 and Model Y will be priced up by 10,000 yuan and 21,000 yuan, respectively. Not long ago, Xiaopeng Automobile announced a price increase of about 4300-5900 yuan, the price of Nezha auto products rose by about 2000-5000 yuan, and from January 1, 2022, the price of Eian LX increased by 4000 yuan.

Some analysts said that the price increase of new energy vehicles may also be related to the rise in raw material prices, which has led to an increase in battery costs. At the same time, the shortage of chips also has a certain impact on new energy best-selling vehicles, and some new energy vehicle companies have solved the contradiction between supply and demand through price increases.

How much impact will subsidies have?

The decline in subsidies for new energy vehicles will not only affect car companies, but also closely related to consumers.

According to the Financial Associated Press, an industry analyst believes that the market may appear "more and more to buy" this phenomenon, "subsidies are reduced, the pressure on car companies is also greater, car companies will also produce more." From the perspective of overall consumption expectations, the person said that the demand for automobiles is relatively rigid, and the current terminal price increase has a limited impact on demand, at the same time, there may be relevant policies to promote consumption on the policy side.

"Whether the price of subsidized decline models will increase depends on the market supply and demand relationship, if the new energy vehicle market still continues a strong trend, some car companies will increase prices, if the demand is relatively weak, it may be traded at a discount." Cui Dongshu, secretary general of the Association, said that most of the new energy vehicle companies are still in a state of loss, the competition in the new energy vehicle market is fierce, and a small number of car companies have grasped the pricing power. "BYD and Tesla have largely mastered the pricing power, their competitiveness is relatively strong, there is a certain benchmarking role, BYD, Tesla price increases, other car companies are likely to follow." Cui Dongshu said that there is still a long way to go for new energy vehicle companies to achieve profitability.

According to a research report released by Guohai Securities, the decline was clearly mentioned in the new energy vehicle subsidy notice issued as early as April 2020, so many consumers bought in advance and had certain psychological expectations for future car price increases. The new energy vehicle market has shifted from policy-driven to market-driven, in the face of strong downstream demand, the subsidy decline has a limited impact on the overall market growth of new energy vehicles, and the overall growth of new energy vehicles in the future is still showing a state of steady growth.

As for the impact of the decline in subsidies for new energy vehicles, Shengang Securities pointed out that terminal prices fluctuate in the short term but are stable in the long run. Tesla, FAW-Volkswagen, Weilai, Xiaopeng and other car companies after the subsidy decline to take price increases, make up the price difference and other countermeasures, short-term terminal sales prices may fluctuate, but with the gradual emergence of electric vehicle scale effect, long-term terminal prices are expected to remain stable. There is no change in the subsidy for short-range vehicles, and the low-end models are still good, and the performance of A00-A-class vehicles is optimistic. With the gradual listing of models for the A-class car market represented by BYD Dolphin and Nezha V, which cost 80,000-120,000 yuan in 2022, the A-class car market is expected to contribute considerable increments to the increase in the penetration rate of electric vehicles.

It is worth noting that after the above-mentioned announcement of price increases, the stock prices of Tesla and Xiaopeng Motors have fallen to varying degrees. Among them, the official announcement of Xiaopeng Automobile fell by 4.29% on the same day. Since the beginning of this year, the performance of the new energy sector has been sluggish. BYD shares have fallen 21 percent since their October highs.

Source: Daily Economic News Ningbo Evening News, First Finance and Economics, Financial Associated Press, Shenyang Metro News

Producer: Qi Na

New Media Editor: Miao Na

Proofreader: Wang Yongbo

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