Over the years, due to overcapacity and fierce market competition, foreign automobile prices have remained basically stable. As the world's largest automobile producer and the largest new car market, China's market competition is particularly fierce, and car prices have been going down. Some people joke that everything in the country is rising in price, only cars are reducing prices.
However, this trend is starting to change. Starting from 2021, due to multiple factors such as chip shortages, rising raw materials, and increased logistics costs, U.S. auto prices began to rise. Affected by this, other countries and Chinese car prices have also begun to quietly go up. Entering 2022, the price increase of automobiles is getting stronger and stronger, and it is sweeping the world.
The United States took the lead in blowing the wind of car price increases
I have a friend who is Chinese-American and the family settled in Hainan before the epidemic. He had a Tesla electric car in the United States and had been driving it for less than two years. The neighbor who helped him maintain the vehicle advised him to sell the car quickly, and the second-hand Tesla is now at the same price as when he bought a new car.
The epidemic in the United States remains high, inflation is severe, and housing prices and car prices are rising sharply. Whether it is a new car or a second-hand car, whether it is a traditional energy car or an electric car, the price of all of them will increase. Due to high oil prices, electric vehicles are popular in the United States, and prices have risen sharply.
On the evening of March 1 this year, US President Joe Biden delivered his first State of the Union address in his term, saying that controlling prices is a top priority. Biden also specifically said that it would urge lower prices for electric vehicles.
However, the next day, the American electric vehicle manufacturer Rivian announced that due to chip shortages, rising raw material costs and inflation, it decided to raise the price of pure electric pickup truck R1T and pure electric SUV R1S by 17% and 20% respectively. This price increase is high enough.
On March 15, Tesla raised the price of all its models in the United States, from $2,000 to $10,000. This is Tesla's second price increase in a week. Tesla CEO Musk has previously said that Tesla faces huge inflationary pressures.
Domestic new energy vehicles took the lead in increasing prices
On the evening of March 15, BYD, a leading company in China's new energy vehicles, announced that since March 16, BYD has adjusted the official guidance prices of the Dynasty series and the Ocean series of new energy models, ranging from 3,000 to 6,000 yuan, due to the continuous sharp rise in raw material prices. This is ALD's second price increase this year. On January 22, BYD issued an announcement announcing that the price of its new energy models would increase by 1,000-7,000 yuan, effective February 1.
On March 15, Tesla's official website showed that the domestic Model 3 high-performance version and the Model Y long-lasting and high-performance version rose again after five days. Among them, the price of the Model 3 high-performance version has been adjusted to 367,900 yuan, 34.99 yuan on March 10, up 18,000 yuan, and 10,000 yuan on March 10. The model 3 high-performance version of the price rose by 28,000 yuan in less than a week, an increase of 8.23%.
Since the beginning of this year, nearly 20 new energy vehicle companies in China have announced price increases, involving nearly 40 models. New car-making forces, Chinese independent brands, joint venture brands, and imported foreign brands are all increasing prices, ranging from 1%-15%.
At the beginning of this year, the 2022 zero-run T03 was listed, and the starting price rose directly by 9100 yuan, an increase of 15%. Xiaopeng Automobile has increased the price of the whole series by 4300 yuan to 5900 yuan since January 11.
Weilai Automobile announced at the beginning of the year that it will no longer bear the difference caused by the decline of new energy subsidies for car buyers after January 1, 2022, and increase prices in disguise.
Since March 1, FAW-Volkswagen and SAIC Volkswagen's electric vehicle ID.4 series and ID.6 series have risen by 5,400 yuan as a whole. SAIC Roewe's RX5 eMAX PHEV Dreadnought Premium Edition, Ei5 and i6MAX EV models increased by 2,000 yuan. Great Wall Motor's electric vehicle brand Euler has increased the price of the GT version of Euler Good Cat by 12,000 yuan since March 1. The pre-price of the 2022 Euler good cat series was adjusted to 121,900-151,900 yuan, up 8,000 yuan to 18,000 yuan. Gac Aion LX rose by 4,000 yuan, and the price of the 2022 AION Y was raised by 5,000 yuan to 9,000 yuan; the newly listed AION S Plus rose by 7,000 yuan to 14,000 yuan. Nezha Automobile, Weima Automobile and Geometric Automobile have also raised the price of their products.
This round of car price increases is not limited to new energy vehicles, traditional energy vehicles are also raising prices, but not publicly announced. The sharp decline in the discount rate of many car brand 4S stores is actually a disguised price increase.
Why new energy vehicles have a greater impact
This round of car prices, traditional energy vehicles and new energy vehicles are rising in price, why new energy vehicles reflect more strongly? There are three main reasons:
First, subsidies for new energy vehicles have been greatly reduced, and the cost of car companies has increased. According to the Notice of the Ministry of Finance, the Ministry of Industry and Information Technology, the Ministry of Science and Technology and the National Development and Reform Commission on the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles in 2022, the subsidy for the mileage of pure electric passenger vehicles of 300-400 kilometers has dropped to 9100 yuan; the subsidy for more than 400 kilometers has dropped to 12,600 yuan. Subsidies for plug-in hybrid models fell to 4800 yuan. According to the new subsidy standard, the subsidy for pure electric passenger cars with a range of more than 400 kilometers has been reduced by 3780 yuan per vehicle.
Second, the price of raw materials upstream of new energy vehicles has risen sharply, and the cost has risen significantly. From the beginning of 2020 to the middle of January this year, the prices of battery-grade cobalt and lithium carbonate rose by 119% and 569% respectively. Both metals are important raw materials for power batteries. The prices of manganese, nickel, zinc, copper, iron, chromium, platinum, ruthenium and other metal raw materials involved in the production and manufacture of new energy vehicles are also rising sharply.
The Russian-Ukrainian conflict has exacerbated the rise in related raw materials. Russia is the world's third-largest producer of nickel metals, with the vast majority supplied to China and Europe. Affected by the situation, the international market nickel price rose by 70% on March 7.
Third, the supply of vehicle-grade chips is insufficient. Compared with traditional energy vehicles, new energy vehicle chips are used more and are also high-end. Affected by the new crown epidemic and natural disasters, chip manufacturers in the United States, Japan and other places have limited production capacity and reduced shipments, most of the domestic high-end chips rely on imports, and the chip shortage "seriously restricts the delivery progress of new energy vehicle companies, and the imbalance between supply and demand leads to high product prices."
Judging from the current development trend, whether it is traditional energy vehicles or new energy vehicles, price increases are the trend of the times, and it is difficult to curb in the short term. The phenomenon of "everything is rising in price, only cars are reducing prices" in China will never return.
For automobile OEMs, how to reduce unfavorable factors such as raw material price increases and control costs should be an important issue that needs urgent attention at present. For car consumers, they can only passively accept the reality of car price increases. (End)
(This article was published simultaneously to China Automotive Trend Network)