Since the price increase of Geely's high-end smart electric vehicle brand Extreme Kr on June 15 last year, the price increase in China's new energy vehicle market can no longer be suppressed. Since March alone, nearly 20 new energy vehicle companies have announced price increases, involving nearly 40 models, with price increases ranging from a few thousand yuan to more than 10,000 yuan.
On February 14, Euler, a new energy vehicle brand under the Great Wall, also passed the notice of black cat and white cat to the terminal to stop taking orders because of cost problems, which caused users to question the suspension of production after the notice was issued.
Euler officially said that although there are advantages in the industrial chain behind the Euler brand, this fashionable and people-friendly car still brings huge losses to the company. Taking black cat as an example, after the sharp rise in raw material prices in 2022, the loss of black cats has exceeded 10,000 yuan.
In Xiao Lei's view, whether it is the price increases of new energy vehicle companies such as Extreme Kr, Tesla and BYD, or the cessation of orders by euler black cats and white cats, the reason behind them all points to a key word - profit difficulties. To put it simply, in the short term, building new energy vehicles is itself a loss-making business.
The general environment is not good, and the price increase of car companies does not cure the symptoms
Xiao Lei believes that the reason why new energy vehicles will be forced to increase prices in a short period of time, or even stop taking orders, is because subsidies have declined, the price of power battery raw materials has soared, and chip shortages have erupted in a concentrated manner, resulting in rising costs in the entire industry and car companies falling into a profit quagmire.
When it comes to new energy vehicles in the early stage of development, the first word that must come to mind of many people is "subsidy". Due to the high cost of power batteries, the endurance of new energy vehicles can not meet the needs of users, and the infrastructure facilities are not perfect, new energy vehicles in the early stage of development is basically an industry supported by subsidy policies.
From 2009 to 2022, the mainland's new energy vehicle subsidy policy has been extended for nearly 13 years. According to incomplete statistics, the mainland has subsidized a total of 147.8 billion yuan, subsidizing more than 1.9159 million new energy vehicles.
Nowadays, with the improvement of new energy vehicle technology and the more mature layout of new energy vehicle infrastructure facilities, the acceptance of new energy vehicles by mainland consumers has become higher and higher, and the development of China's new energy vehicle industry has basically been able to get rid of the dependence on national new energy vehicle subsidies.
The decline of the subsidy policy for new energy vehicles is not only something that new energy vehicle companies can predict, and even some consumers who understand the development trend of new energy vehicles can also guess. Judging from the sales volume of new energy vehicles this year, the price increase of new energy vehicles brought about by the decline in subsidies has not brought too much blow to China's new energy automobile industry.
According to the China Automobile Association, in February 2022, the production and sales of new energy vehicles in the mainland reached 368,000 units and 334,000 units, respectively, an increase of 2 times and 1.8 times year-on-year. Taking China's new energy vehicle giant BYD as an example, its sales of new energy vehicles reached 88,283 units in February, an increase of 752.56% year-on-year. Obviously, consumers have accepted that things like subsidies have fallen.
In terms of chips, since the volkswagen group stopped production on a large scale at the end of 2019 due to the shortage of automotive chips, the cloud of "chip crisis" has hung over the automotive industry for up to 2 years. According to industry insiders, the price of the core chip STL9369 for the body electronic stability system produced by STMicroelectronics rose from about 20 yuan to 2800 yuan in one year.
In terms of power battery raw materials, the relevant person in charge of a lithium carbonate raw material production enterprise located in Yichun, Jiangxi Province, revealed that from 2020, the price of lithium carbonate will rise all the way. At that time, the price of lithium carbonate was basically maintained at about 50,000 yuan / ton, but after more than a year, it has now risen to 500,000 yuan / ton, which is equivalent to ten times a year, and the price has an upward trend.
Although the rising trend of power battery raw materials and chip prices cannot be seen at a glance, consumers' ability to accept prices has a bottom line. They may be able to accept such a long-awaited decline in new energy vehicle subsidies, the increase is not large, and the price increase on the surface, but the cost pressure brought about by factors such as chip shortage and soaring prices of power battery raw materials can only be borne by new energy vehicle companies themselves.
Of course, in the face of the cost pressure brought about by changes in the industry, the response of new energy vehicle companies should never only be to increase prices and stop production, which are two ways to cure the symptoms but not the root causes.
Upgrading, cost reduction, the way for car companies to get rich
According to Euler Motors, they lose tens of thousands of yuan for every black cat they sell. In Xiao Lei's view, this sentence reveals a two-fold meaning, on the one hand, it spits that the black cat, a low-end model, cannot make money, on the other hand, it also releases a signal to the outside world to launch a high-end model with higher profits.
Euler Auto's 2022 product plan shows that it will launch four new models this year, including ballet cat, lightning cat, punk cat, and cherry cat.
Among them, the price range of ballet cats expected to be listed in March will be between 150,000 and 200,000 yuan, the lightning cats that are expected to be listed in the second quarter are expected to be priced at about 200,000 yuan, and the punk cats are mainly focused on the market of more than 200,000 yuan. Obviously, after the black cat and white cat stop production, Euler Automobile will launch a comprehensive attack on the high-end new energy vehicle market.
Interestingly, in addition to Euler, BYD, which has not increased revenue for a long time, also played a high-end card in 2022. It not only recovered 90% of the shares of Denza, a high-end electric vehicle brand that was previously established as a joint venture with Daimler, but also plans to launch a high-end car brand positioned at the level of 500,000 to 900,000 yuan.
In the case of the continuous deterioration of chip shortage and the continuous rise of power battery raw materials, the purpose of new energy vehicle companies such as Euler and BYD to impact the high-end new energy vehicle market is obvious, that is, for higher profit margins.
In addition to transforming high-end car brands, reducing car companies' dependence on power batteries and chips, and improving the profit margin of bicycles, increasing sales and expanding production capacity is also a good way for new energy vehicle companies to squeeze more profits. In this regard, Tesla's performance can be said to be particularly eye-catching.
Theodore Wright's Leytic Law, proposed as early as 1936, pointed out that for every doubling of cumulative production, the cost would fall by a constant percentage, and for every doubling of automobile production, there would be a price reduction of about 15%.
In fact, before Theodore Wright proposed this law, the famous Ford Model T in the United States from 1909 to 1923 production and price change curve has perfectly interpreted this law, and Tesla is currently hoping to achieve cost reduction through this law.
In the case of controllable costs, why should Tesla keep cutting prices? Because price reduction will promote sales, sales can drive production, production rises costs fall, costs fall after cost declines, thus forming a virtuous circle between price reduction, sales volume, output, and profits.
Today, Tesla has become the world's most profitable car company through Lytamine Law, and its car gross profit margin has reached a staggering 28.4%. It is worth mentioning that Tesla has been streamlining and optimizing the supply chain system, upgrading the production and manufacturing process, and its models still have a lot of room for price reduction in the future.
It should be known that Toyota Motor, the world's first profitable traditional car company, has a gross profit margin of about 18% in 2020, and the gross profit margin of Porsche, the most profitable car brand under the Volkswagen Group, is only 16.7%, while at this time, new energy car companies other than Tesla are still struggling on the food and clothing line.
Although Tesla's strong rise in just a dozen years is a myth in the industry, it is only an ordinary car company in the end. When it completed the cycle between "sales volume and production", it also experienced a painful capacity climbing stage.
At that time, Tesla successfully climbed out of the production capacity hell through excellent cost control capabilities. Today, it has opened a super factory in the mainstream new energy vehicle markets such as North America, China and Europe, and has expanded production wildly, basically without worrying too much about production capacity because of factory capacity.
In Xiao Lei's view, the vast majority of new energy vehicle companies today are more miserable than Tesla, which was in the same period of loss and production capacity hell. At that time, Tesla's biggest constraint was production capacity, and now affected by the shortage of chips in the field of new energy vehicles, the rise in the price of raw materials for power batteries, and the decline of subsidies, all new energy vehicle companies will usher in the darkest moment.
Therefore, the status quo of most new energy vehicle companies is that every time they sell a car, they are losing money, but they have to sell cars. So, the question is, since it is difficult for new energy vehicles to make money, why do car companies still have to get into the game? Because the business opportunities of new energy vehicles are unlimited, they are promising.
Knowing that the tram is losing money, why are car companies flocking to it?
The reason why car companies know that trams are losing money and flock to the market is because new energy vehicles do have great prospects for development. For traditional car companies, the transformation of new energy is the general trend of automobile development, and the research and development, production and sales of new energy vehicles are its only way out.
If traditional car companies do not develop new energy vehicles, then they will have no way out in the future. You know, so far, the increasingly stringent emission regulations and carbon credit rules have made the vast majority of traditional car companies that mainly sell traditional fuel vehicles feel very uncomfortable.
Taking the Volkswagen Group as an example, on September 18, 2015, the Volkswagen Group broke out the famous "Volkswagen Emission Gate" incident.
The U.S. Environmental Protection Agency accused Volkswagen of installing software specifically for exhaust emissions testing that allowed the cars to pass "high environmental standards" during vehicle inspections, but the actual emissions of these cars could reach up to 40 times the legal standards in the United States.
After the incident, Germany, South Korea, Italy and other countries have also begun to investigate whether Volkswagen has violated the law in the local area. By December 11, 2019, the Volkswagen Group had already paid an economic cost of up to 30 billion euros as a result of the "emission gate" incident.
It is worth mentioning that not only Volkswagen Group, but also many car companies in the Chinese market in order to cope with the National VI emission standards are also equipped with particle traps, which are not curative devices, because this device may affect power and fuel consumption, and individual consumers will illegally dismantle the device after completing the new car test.
In addition to the strict emission regulations, the "Measures for the Management of Average Fuel Consumption of Passenger Car Enterprises and the Credits of New Energy Vehicles" issued by the mainland is also a policy that makes traditional car companies smell different. Among them, FAW-Volkswagen, which ranked first in the 2020 carbon standings with negative points, owes 1.32 million negative points. In order to fill this big hole, FAW-Volkswagen spent nearly 4 billion yuan.
Xiao Lei believes that if it were not for the fact that the environmental standards of various countries were too strict, the Volkswagen Group would not use cheating as a means to fool through the customs. If it were not for its insufficient technical reserves in new energy vehicles, it would not have paid nearly 4 billion yuan for carbon emissions to repay 1.32 million negative points. Therefore, in order to prevent similar things from happening again, traditional car companies, including Volkswagen, must transform into new energy.
For the new car-making forces, because the focus of new energy intelligent vehicles is different from that of traditional cars, they are almost at the same starting line as traditional car companies. Xiao Lei believes that entering the game before the traditional car companies react is an excellent time for new car-making forces to enter the automotive field and share the big cake of future travel.
The biggest advantage of traditional car companies is the automobile heritage, which is the manufacturing process and technology accumulation that have been precipitated for decades and hundreds of years. However, the inherent thinking of traditional car companies that have been precipitated for decades and hundreds of years has also constrained their speed of intelligent development, which happens to be the biggest advantage of the new car-making forces with internet background.
For example, even though Volkswagen already has the main electrified ID series models and BMW has the iX series models, these so-called "smart electric vehicles" developed and created by traditional car companies still have not been able to get rid of the shackles of traditional thinking.
In contrast, Tesla, Weilai, Xiaopeng and other new car-making forces that have risen later, their products have truly embarked on the road of "software-defined cars". Among them, software revenue has become an indispensable wealth and layout of Tesla and Xiaopeng Motors, and service has become another label of Weilai Automobile in addition to cars.
Finally, back to the theme of this article, why do car companies know that they will lose money in the short term and still have to get into the field of new energy vehicles? The answer is obvious, because the development of new energy vehicles is the trend of the times. Now new energy vehicle companies are sticking money to seize the market and expand their influence, but as long as they survive this stage of losing money, new energy vehicle companies will usher in a profitable spring.
Note: The material for this article comes from the Internet