The popular Euler black and white cat model in 2021 has recently fallen into a shutdown storm.
Late at night on February 23, Dong Yudong, CEO of Great Wall Motor's Euler brand, explained the notice of stopping receiving orders through the Euler ORA APP, revealing helplessness between words, and the core of the problem pointed to "lack of core and less electricity". And stressed that Euler black cat white cat only stopped receiving orders, not stopped production.
Only from the perspective of market performance, with the overall cost of the industry rising sharply, it is not difficult to see the dilemma of car companies. Official data shows that the Euler brand will sell about 135,000 vehicles in 2021, an increase of 140% year-on-year. Among them, the cumulative sales of black and white cat models exceeded 80,000 vehicles, accounting for about 60% of the total sales of the Euler brand. However, the doubling of sales growth is still difficult to overcome the practical problem of loss.
"Taking black cat as an example, after the sharp rise in raw materials in 2022, the loss of black cats alone exceeded 10,000 yuan." Dong Yudong told Future Auto Daily. In fact, due to the decline in subsidies, the price of lithium battery raw materials, the shortage of chip supply and other issues, the rise in manufacturing costs has become a common problem for all new energy vehicle companies. The A00-class electric vehicle, which has a small profit, has also begun to fall into the dilemma of "selling one and losing one".
Selling a car for a loss of ten thousand?
"Our (Euler)'s ability to integrate the industrial chain based on Great Wall has reached the extreme, but it is still losing money." When it comes to the loss of black cats and white cats, Dong Yudong is quite helpless.
According to Dong Yudong, in the manufacturing cost of Euler black cat and white cat, the cost of three electricity accounts for about 55%-60.7% of the manufacturing cost of the whole vehicle, and the electronic appliances account for about 14.5% of the manufacturing cost of the whole vehicle. Together, the two account for 69.5%-75.2% of the vehicle manufacturing cost.
Euler Black Cat Source: Official
The three-electric system and electronic appliances are the "hardest hit areas" of raw material prices.
A buyer of a traditional car company told Future Auto Daily that in a market of short supply, car companies even fell into the predicament of having money to buy chips. "Since last year, the general price increase of chip raw materials has been 30 times to 50 times, and some scarce chips have risen from a few dollars to thousands of yuan."
The problem of "core panic" has not been solved, and the price of lithium battery raw materials on the other side is still soaring.
According to GGII data, in September 2021 compared with the beginning of 2021, the average prices of raw materials such as the four main materials lithium iron phosphate cathode material, ternary 523 power monocrystalline material, artificial graphite anode, and electrolyte increased by about 70%, 60%, 30% and 135% respectively. Entering 2022, the upward trend of raw material prices has not improved.
Data from Shanghai Steel Federation on January 28 showed that the price of battery-grade lithium carbonate rose by more than 20% compared with the beginning of the year. The increase in prices in all aspects is passed to the production end, which overwhelms new energy vehicle companies, and for A00-class new energy vehicles, which are not high in price, it is even worse.
In addition to euler black cat "single loss of more than 10,000 yuan", another popular god car Wuling Hongguang MINI EV is also difficult to bring profits to SAIC-GM-Wuling.
In 2020, SAIC-GM-Wuling sold more than 1.6 million vehicles, making it the highest-selling brand in SAIC Group. In terms of sales volume, with the help of Wuling Hongguang MINI EV, SAIC-GM-Wuling's share in the micro-pure electric vehicle market will reach 51% in 2020.
However, compared with the sales volume that swept the market, such achievements did not reverse the sharp decline in saic and GM-Wuling profits. In 2020, when Wuling Hongguang MINI EV was sold, SAIC-GM-Wuling's net profit was only 140 million yuan. This also seems to support the fact that it is not profitable.
Caitong Securities has issued a research report saying that according to the cost price estimates disclosed by various parts suppliers in the market, the gross profit margin of Wuling Hongguang MINI EV may be between 2% and 3%.
At the same time, China's new energy vehicle subsidies in 2022 will also further decline. According to the "Notice on the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles in 2022" jointly issued by the four departments on December 31, 2021, China's new energy vehicle subsidy standards in 2022 will decline by 30% on the basis of 2021, accompanied by the rise in raw material prices and subsidies, the manufacturing costs of new energy vehicle companies have been pushed up, and car companies have to take measures to increase prices.
Since entering 2022, BYD, Tesla, GAC Aean and other car companies have announced price increases. But for A00-class new energy vehicles, which are already relatively low-priced, it seems that it is not easy to share manufacturing costs with price increase strategies.
"A00-class new energy vehicles face a relatively limited consumer group car purchase budget, more sensitive to price, if a car company easily increases prices, then naturally will discourage a group of consumers." Cui Dongshu, secretary general of the Association, told Future Auto Daily.
The "price honey" that once helped A00-class new energy vehicles quickly attack the city in the market has become the "arsenic" that makes car companies fall into a whirlpool of losses.
In addition, with the increasing penetration rate of new energy vehicles and the acceleration of car companies' shift to new energy layout, the price of new energy credits is also declining.
Dong Yudong revealed that the price of new energy credits last year was 2350 yuan / min - 2500 yuan / min, "because last year our growth reached 160%, the new energy market generated more and more points, this year's value is 500 yuan / min - 800 yuan / cent." ”
The "Eulers" must break through upwards?
Judging from the past market performance, in the new energy vehicle market, A00-class cars are undoubtedly the traffic code for car companies to seize market share.
In 2021, the sales volume of A00-class pure electric sedans will be about 898,500 units, accounting for 30.1% of the overall sales of new energy vehicles, becoming the highest selling subdivision.
According to the data of the Association of Passenger Vehicles, in the annual sales ranking of new energy vehicles in 2021, 9 of the top 15 are A00-class or A0-class small and micro electric vehicles.
Cui Dongshu believes that the current market demand for A00-class new energy vehicles is still strong, and there is still a huge incremental space for A00-class new energy vehicles to be tapped. However, on the one hand, it is difficult to give up the market increment, and on the other hand, it is difficult to balance the manufacturing cost. For those brands that focus on A00-class new energy models, how to break through in the dilemma has become a mandatory test for them.
Dong Yudong said that Euler is currently starting from the manufacturing end to further reduce production costs to reverse the current loss situation. At the same time, Euler is also actively seeking new solutions in marketing.
Dong Yudong believes that the new energy vehicles currently on the market are divided into three types. One is a new energy vehicle product that wins by technology, such as Tesla and Weilai; one is a product that wins by relying on core three-electric technology, such as BYD; and the last is a product that meets the personalized needs of consumers.
Euler is the third type. "This part of the population is mainly young consumers, different from the needs of third- and fourth-line car buyers, their price sensitivity is not high, if Euler has a demand for price increases in the future, this group of consumers is relatively more acceptable." Cui Dongshu analyzed.
Wuling Hongguang NIMI EV Convertible Edition or will be available in the second quarter of this year Source: Wuling official
Coincidentally, Wuling Hongguang MINI EV will also take personalization as the mainstream development trend in the future. In addition to launching a variety of color matching, Wuling Hongguang MINI EV also frequently launched personalized products such as the Year of the Tiger Limited Edition and the Convertible Edition. However, in the long run, the prospects of the A00-level new energy vehicle market are not clear.
According to the Ping An Securities Research Report, the incremental pattern of new energy vehicles will change in 2022, the growth rate of the A00-level new energy market will be under pressure, the penetration rate of A0-level new energy vehicles is expected to increase, and the penetration of smart new energy vehicles will also accelerate to the high-end market. Limited by factors such as space, safety, and battery life, the Shanghai area has no longer licensed A00-class new energy vehicles.
Dong Yudong believes that this trend will soon land in more first-tier cities. "With the development of the industry, everyone realized that only more than 150,000 products can have room for profit." Leaving limited time for car companies focusing on A00-level new energy vehicles to seize market share, "Eulers" naturally cannot just hold on to a major market and stand still.
"First of all, the characteristics of its A00-level new energy products such as intelligence and endurance will be improved, and then the market price will be increased." On this basis, we can further launch A-class or even B-class new energy vehicles, and seize the future incremental market step by step. Cui Dongshu analyzed.
The author | Su Peng
Edit the | Wang Yan