Since the beginning of this year, the hot situation of A00-class electric vehicles seems to have cooled down.
In January, in the face of a boom in the electric vehicle market, A00-class electric vehicles did not keep up with the trend. For example, according to the data released by the National Passenger Car Market Information Joint Association, in January, Wuling Hongguang MINIEV sold 26682 vehicles, and February sales were 26116 vehicles, although this achievement can still be beaten, but compared with the last three months of 2021, it is still much inferior. In the last three months of 2021, Wuling Hongguang MINIEV sold 39,128 units, 45,576 units, and 55,742 units, respectively. Not only Wuling Hongguang MINIEV, but other A00-class electric vehicles have also shown a state of lack of staying power, and some even have to suspend production.
Under the challenges of fiercer market competition, rising costs and falling points prices, is the inflection point of the A00-class electric vehicle really coming?
1 Monthly sales of most models bottomed out
At present, the mainland new energy passenger car market is generally in a rapid growth range. Statistics from the China Association of Automobile Manufacturers show that in January and February this year, the sales of new energy passenger cars in the mainland reached 419,000 units and 321,000 units, respectively, an increase of 138.7% and 182.2% year-on-year.
In the rapid growth of new energy passenger cars, the A00 class model has been a major contributor to sales, but now it is showing weakness. In January and February this year, although Wuling Hongguang MINIEV still ranked first in the current monthly sales list of new energy vehicles, this achievement was still much dimmer than the previous performance and the rapid growth of new energy vehicles in January and February. Coupled with the unfavorable market environment for the development of A00-class electric vehicles, many people question that the inflection point of A00-class electric vehicles has arrived.
The performance of more models also seems to confirm this doubt.
According to the data, in January, Changan Xinben EV sold 8904 vehicles, down 1.28% month-on-month; Euler Good Cat sold 9058 vehicles, down 15.61% month-on-month; JAC iEV6E sales were 0; Chery QQ ice cream sales were 9984 units, an increase of 19% month-on-month; Chery Little Ant sold 10103 vehicles, down 0.67% month-on-month. In February, Chery QQ Ice Cream, Changan Benben EV, Chery Little Ant, and Sihao E10X, which ranked second to fifth in terminal delivery, had terminal sales of 6442 vehicles, 5613 vehicles, 3735 vehicles and 3518 vehicles respectively, all far lower than the terminal delivery volume in January, and the terminal delivery volume of many models fell by more than 50% in February.
At the same time as the monthly sales of many hot models fell sharply, the News of the suspension of the sale of Euler black cat and white cat models also came out, and even caused a lot of controversy.
On the evening of February 14, Great Wall Motor dealers said that they received a notice that from 00:00 on February 15, Great Wall manufacturers stopped receiving orders for two low-priced models of Euler Black Cat and White Cat. At the same time, Great Wall Motors also asked dealers to remove the exhibition vehicles and promotional materials from the exhibition hall. The next day, Euler Automobile confirmed the rumor to the media, and the relevant person in charge responded: "These two models have indeed stopped receiving orders." On February 23, Dong Yudong, CEO of the Euler brand, issued a statement on the official App, saying: "Euler black cat and white cat stop taking orders, not stop production, we are actively seeking solutions." In response to the speculation and doubts of the outside world about the suspension of the sale of black and white cats.
The problem of loss and non-profit of A00-class models has also surfaced, causing widespread concern inside and outside the industry.
2 Rising costs Selling cars at a loss
For the black cat and the white cat to stop taking orders, the explanation given by Dong Yudong is a loss.
He told the "China Automotive News" reporter that although there is an advantage in the industrial chain behind the Euler brand, with the continuous rise in raw material prices, the two cars will lose more than 10,000 yuan for every 1 car sold. Behind the failure of these two A00-class pure electric vehicles with cumulative sales of 173,000 units, it reflects the survival status quo of the industry: even if there are sales, such models seem to be unprofitable for car companies.
Dong Yudong said frankly: "The A00-level market is now too chaotic. In the early stage of industrial development, A00-class pure electric vehicles are very good products, which has led to an increase in the penetration rate of new energy vehicles; but with the rise in raw material prices, rising costs, subsidies declining, and the trend of losses becoming more and more obvious. ”
"In the past, the reason why many companies mass-produced low-end pure electric vehicles was not how much profit the vehicle itself could bring, but to value its integral advantage. But now the points market has also undergone great changes, new energy vehicle points from short supply to oversupply transformation, points are no longer so valuable, enterprises naturally lost the momentum of large-scale promotion. More critically, at present, the rise in the price of raw materials for power batteries and the further decline of subsidies have further increased the cost of vehicles, and under the serious losses, some models have chosen to stop selling, and some manufacturers no longer strive to promote A00-class models, which is an inevitable choice under market changes. An industry expert told reporters that the continuous loss, coupled with the superposition of various factors such as the demand for points and the decline in prices, car companies have lost the enthusiasm to promote A00-class models, which will naturally bring about changes in the sales of such models.
At the same time, under the tight supply of chips, in the face of chips whose prices have doubled dozens of times, or even hundreds of times, car companies will naturally tilt their chip resources to "profitable" or more influential models, and those main intelligent A00-class models will be more embarrassing, which is why some models have to stop production. Dong Yudong said that if the Euler black cat and white cat models continue to receive orders, they will need to be delivered in the second half of 2022.
So, under the superposition of various factors, how much has the cost of car companies risen? Data released by market research institute IHS Markit shows that in the second half of 2021, the price of lithium-ion batteries rose by about 10% to 20%, and the cost of an electric vehicle battery will increase by more than 3,000 yuan. This year, the price of cathode materials such as battery-grade cobalt, nickel sulfate, and lithium carbonate will continue to rise sharply, and it is expected that the price increase of lithium batteries may reach 13% to 15%.
Euler brand officials have revealed that the production cost of the black cat and white cat's three-electric system has reached about 55% to 60% of the cost of the vehicle, and such a large increase in raw material prices has brought a lot of cost pressure to black cats and white cats.
In addition, according to the subsidy policy for new energy vehicles, the subsidy for pure electric vehicles this year will also be reduced by 30% on the basis of 2021. That is to say, a pure electric vehicle with a driving range of 300 to 400 kilometers will be reduced by more than 300 yuan, while zero running T03, Euler black cat, white cat are among them. The reduction in subsidies has also exacerbated cost pressures on these models. Although more A00-class models with a driving range of less than 300 kilometers have long been unable to receive subsidies, such as Hongguang MINIEV, the decline in the price of new energy vehicles on which they depend for survival has also significantly reduced the profitability of these models. Some car companies have reported that the price of new energy vehicle credits has been reduced from 3,000 yuan / min to 500 yuan / min.
Dong Yudong said: "Counting on each car, the price of batteries has risen by more than 3,000 yuan, and the cost of bicycles has increased by 4,000 yuan after the subsidy has declined this year. In addition, the integration price of new energy vehicles has also dropped to the lowest point, and taking into account the configuration of each car and the size of the battery, the cost of each car has increased by at least 7400 yuan, reaching tens of thousands of yuan. ”
Under cost pressure, some models have had to raise prices. On March 17, Chery New Energy officially revealed that Chery Small Ant will increase its price by 3,000 to 4,100 yuan. Chery QQ Ice Cream Entry-level Pudding did not increase in price, but the price of the cone model increased by 1300 yuan and the price of the sundae model increased by 3100 yuan. Even Wuling Hongguang MINIEV, which has achieved the ultimate in cost control, has had to raise prices slightly. It is understood that at present, the price of Hongguang MINIEV entry-level has increased from 28,800 yuan in the initial listing stage to 37,600 yuan. The price of new models that will be launched this year may also rise again.
With the continuous rise in raw material prices, after the price increases of mainstream new energy vehicle companies such as Tesla, BYD and Xiaopeng, A00-class models cannot withstand the pressure. But can the A00-class car, which is already relying on low prices, continue the previous scenery after the price increase?
"The reason why the A00-class model can quickly open the market is that it is fundamentally due to the relatively low price. Some models can even achieve the price of a low-speed electric car. Coupled with the advantage that this vehicle has a license plate, it will naturally be welcomed by consumers in rural areas, 'urban-rural junctions' and other regions. Facts have also proved that this type of model does have a huge market demand, and has become a best-selling model to replace low-speed electric vehicles in the vast third- and fourth-tier cities and rural markets. However, with the rise in the price of battery raw materials and the decline in the price of new energy vehicle credits, the cost pressure of car companies has risen sharply. If you still follow the previous way of playing, the consequences can only be not to make money, or even lose money, which is why car companies have to raise prices. A person in charge of marketing of an independent brand car company who did not want to be named told reporters that once there is no price advantage, such models will lose a part of the market, which will cause sales to decline.
"Don't say three or five thousand yuan, that is, three or five hundred yuan, which is very difficult for A00-level consumers who attach great importance to cost performance." Therefore, we do not dare to raise prices at all, and can only find ways to control costs and self-digest. The cost control of the A00-class model has been done very well, but the cost increase caused by factors such as the rise in raw material prices is too large and has far exceeded our affordability. In the face of consumers, we dare not raise prices, so now selling cars has become a burden. The above-mentioned marketing person in charge admitted that this cost increase that exceeds the affordability of car companies has caused many car companies to lose their enthusiasm for the promotion of A00-class models. Some companies that have to raise prices due to cost pressures will also have their sales affected.
3 The A00-level market is under full pressure
In the case of the A00 market showing weakness due to cost pressures, other market segments are exerting their strength. For example, the previously sluggish A-class electric vehicle market is gradually opening.
"Of course, car companies will be more inclined to the A-class car market, after all, this is the home of new energy vehicles." The above-mentioned industry experts said.
Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers, also said in an interview with The China Automobile News that the A-class car market is a segment of the market that must be broken through for new energy vehicles to achieve sustained high growth, because from the perspective of market demand structure, this market is the main market for passenger car consumption.
"In the past, due to cost, technology and other factors, this market has not been opened for a long time. However, with the improvement of consumer awareness, consumers in this segment have begun to accept new energy vehicles, and manufacturers will inevitably invest more energy in developing this market. Xu Haidong stressed that the A-class car market is the main market for new energy vehicle sales.
Shen Hui, founder, chairman and CEO of WM Motor, is very optimistic about the development of mid-range pure electric vehicles. He believes that in the future, the market structure of new energy vehicles in the mainland will accelerate optimization from "dumbbell type" to "spindle type", and it is expected that by 2030, electric vehicle models in the price range of 150,000 to 250,000 yuan will occupy about 60% of the market share, and the penetration rate will increase from 3% to 40%.
Driving the sales growth of its own new energy vehicles to the mid-range car market has also become a key strategy being promoted by mainstream car companies, including GAC E-An and Changan New Energy.
Abandoning the low-end market represented by A00-class cars that do not have much profit space, exerting efforts on the mid-end market represented by A-class cars, and even moving towards the high-end model market with more room for growth, BYD has tasted the sweetness. In 2018, BYD also launched a number of A00-class models, but this has not become its main focus, but has always focused on the mid-range car market represented by A-class cars, and successfully created a high-end best-selling model Han last year. At present, BYD's monthly sales of new energy passenger cars have exceeded 80,000 units. In February, sales reached 87,473 units, up 335% year-on-year. Its cumulative sales of new energy passenger cars have also reached 1.69 million units, most of which are A and B class vehicles.
"In the current new energy vehicle market, models below 150,000 yuan have almost no room for profit." An industry insider told reporters that on the one hand, the A00-class models that rely on cost control and low-price competition face the continuous rising cost pressure and have to raise prices, which will bring a certain degree of market loss; on the other hand, A00-class cars are difficult to make profits due to low prices, which will also prompt car companies to change their course and exert force on market segments with larger market space and certain profit margins. Driven by multiple factors, the A00-level market will inevitably be squeezed.
At the same time, the problem of low-speed electric vehicles turning positive has also progressed. Last year, the Ministry of Industry and Information Technology revised the "Technical Conditions for Pure Electric Passenger Cars" and added technical requirements for micro low-speed pure electric passenger cars. The national mandatory standard "Technical Conditions for Four-Wheel low-speed Electric Vehicles" also proposes that low-speed electric vehicles will be allowed to be used in specific areas. The low-speed electric vehicles that have been formalized and managed may regain a new life after meeting certain safety and environmental protection requirements, and will also occupy the market of some A00-class electric vehicles.
It is worth noting that in the field of traditional fuel vehicles, the mini car market has also experienced the development process from hot sales to gradual withdrawal from the market, that is, in the A00-level electric vehicle market, there are also cases of explosive models going to Waterloo.
Zhidou Automobile is a typical case. When summarizing the experience of Zhidou bankruptcy and Wuling Hongguang MINIEV hot sales inside and outside the industry, it is generally believed that cost control is the key to the success or failure of A00-class vehicles.
Masato Yamamoto, an expert professor at Nagoya University in Japan, once studied the cost of The Goryo Hiroko MINIEV, and he estimated that the parts and installation cost of the car was about 27,000 yuan, and it was very difficult to achieve such a low cost control.
"Cost control is very important for A00-class models, but few companies can achieve the level of SAIC-GM-Wuling, otherwise Euler black cats and white cats would not have lost so much." A person in charge of a car company who did not want to be named confessed. The company where the head of the car company is the earliest to produce low-speed electric vehicles, but after obtaining pure electric vehicle production qualifications and turning to the A00-level electric vehicle market, it is difficult to achieve fine cost control like Wuling Hongguang MINIEV, coupled with the cost of model research and development, verification and other costs, it is difficult for enterprises to produce only A00-level electric vehicles. Especially in the case of rising raw material prices for power batteries and rising costs in the new energy automobile industry, the profit space of car companies is smaller.
The 4 A00 segment market is time to reinvent itself
Dong Yudong said: "The A00-class electric vehicle market has come to reshape. We hope that China's auto industry will develop in a benign direction, that is, to achieve a rise at the waist. He believes that there are three main products in the future waist market: the first is a scientific and technological innovation product similar to Tesla; the second is a "three electric" technical strength similar to BYD; the third is a product that can meet the needs of personalized customization, and Euler will take the third road in the future.
"With the continuous improvement of the penetration rate of electric vehicles, there will be more and more users with personalized needs, and Euler is to use innovative categories to meet the emotional needs of users." Dong Yudong said. Even if we make A00-class cars, we must abandon the past low-price competition strategy and move closer to higher technical content.
Wang Qing, director of the Market Economy Research Institute of the Development Research Center of the State Council, stressed that A00-class cars do not represent low-end cars, and micro and small cars also have high-end models. From the perspective of the long-term development of enterprises and markets, we need to develop more personalized and technological products to meet the different needs of consumers. The development strategy of the A00-level market has reached the time to reposition.
Nezha and Zero Run, which once received good sales in the A00-level market, are also adjusting to a more diversified product structure. Zero-run cars recently announced that they have officially entered the 2.0 strategic stage, and plan to achieve sales of more than 800,000 vehicles in 2025, in addition to the existing S01, T03, C11 three models, will also launch 5 new cars, A00-class models are no longer the focus of this new car-making force. Nezha's strategy in the A00-class electric vehicle market has also changed. Wuling Hongguang MINIEV has long begun to launch various upgraded versions of new models, even including modified cars. Launching more models that meet different needs has become the choice of many car companies, and more car companies are actively jumping out of the "encirclement" of low-price competition.
Although it is difficult to judge whether the current development of A00-class electric vehicles has reached an inflection point, in any case, the industry must accelerate the pace of change and seek a new direction of development in order to achieve better development.
Text: Wang Jinyu Editor: Sun Huanyu Layout: Zhao Fangting Image source: the company's official website