▍ Salt Finance
Author | Qingxin
Edit | A knife
On the last day of March, oil prices rose again, with gasoline and diesel prices rising by 110 yuan per ton, and oil prices went farther and farther in the "9 yuan era".
This is the third time in March and the sixth time this year that oil prices have been raised. The owner of the oil truck shouted, "I can't afford to refuel."
After 6 rises, the cumulative domestic gasoline and diesel fuel per ton increased by 2125 and 2050 yuan respectively, which means that The No. 92 gasoline, No. 95 gasoline, and No. 0 diesel fuel rose by 1.67, 1.76 and 1.74 yuan per liter respectively.
Six price increases this year (Source: Daily Economic News)
Originally, this wave of oil prices rose, wait-and-see prospective owners of new energy vehicles eager to try, but did not expect that since March, new energy vehicle companies have increased prices, most of them have increased prices of more than 10,000 yuan, quite with the oil price rise PK posture, so that prospective owners have fallen into entanglement.
On the sidelines, many people put money into funds or stocks in an attempt to "give a fight, and the bicycle became a motorcycle", but unexpectedly encountered a sharp fall in A shares.
On the one hand, the price of oil and new energy vehicles has risen, on the other hand, there is a big "bleeding" in funds and stock accounts, and many netizens tearfully sighed that "I feel that Russia is fighting a war with my money."
No one expected that the distant Russo-Ukrainian war would affect people in such a way, and this was the magical and realistic March.
After the price of oil and new energy vehicles has risen in turn, new trends have also surfaced.
Behind the tide of rising tram prices
The price increase of the tram is like the agreement of the car company.
In this wave of car companies' price increases, the leader is the "new energy brother" - Tesla. Within a week (March 10, March 15, and March 17), Tesla announced price increases three times.
"A brother" took the lead in price increases, the steps are not small, a single increase of up to 20,000 yuan. Subsequently, bydir, Xiaopeng, Weilai, Weima, Nezha Automobile, zero-run cars and other new energy "little brothers" have followed. For example, on March 23, Ideal Auto issued an announcement that since April 1, the price of Ideal ONE has been raised from the original 338,000 yuan to 349,800 yuan, up 11,800 yuan.
According to incomplete statistics, since the beginning of this year, there have been more than 50 new energy vehicles from more than 20 car companies, many of which have increased by 20,000-30,000, which has brought back the purchase desire of many prospective car owners.
Shanghai GM Wuling price adjustment instructions (Source: Shanghai GM Wuling)
According to China Automobile News, in a large second-hand car trading market in Chengdu, Tesla is also almost a price a day, "Just three days, the price of the same second-hand Tesla rose by 5,000 yuan." ”
Of course, the hot new energy second-hand market, in addition to the transmission of new car market price increases, there is also a part of the new energy second-hand retention rate is improving.
According to the "2021 Consumer Demand Insight Report on the Used Car Market" released by the Autohome Research Institute, in 2019, the market share of new energy used cars was only 1.6%, and in 2021, it has increased to 4%, and the share has increased by 2.5 times.
What makes consumers angry is that the price of the car has risen, and the waiting time for the car to be picked up has been longer. Still taking Tesla as an example, its official website shows that the model Y's expected delivery cycle is 10 to 14 weeks, while the Model 3 is as long as 20 to 24 weeks.
Model Y rear-wheel drive version price rose from 301840 yuan to 316900 yuan, an increase of 15060 yuan (source: Tesla official website)
Under the expectation of bullish prices of new energy vehicles, such a long delivery cycle, so that the order before the price increase has become a fragrant feast, the reporter found that in the idle fish, auto home and other platforms, there are "scalpers" in the scalping before the price adjustment order, the transfer fee of some orders up to 20,000 yuan.
To this end, Tesla plugged this "loophole", but also let the later owners sign a "non-resale commitment letter", requiring the owner of one or more orders to buy Tesla, promised not to resell to a third party within one year, and the violator paid a penalty of 20% of the vehicle fare.
The epidemic lasted for two years, the economic recovery was not as expected, the wave of layoffs in enterprises spread from the education and real estate industries to the Internet factories, most consumers consciously and tacitly began to protect cash flow, and the enthusiasm for consumption was greatly reduced.
At this time, where did the new energy vehicle companies rise in price? In the final analysis, it is because of the increasing market penetration (market share) of new energy vehicles.
According to data from the Ministry of Industry and Information Technology, the penetration rate of domestic new energy vehicle sales in 2020 is only 5.4%. In 2021, the market penetration rate of domestic new energy vehicles increased to 13.4%, which was more than 2 times higher. According to the national passenger car market information joint meeting, this year's new energy vehicles are expected to exceed 6 million, and the penetration rate will increase to about 22% again.
After the rise in oil prices, the marginal cost of oil vehicles is increasing, more and more people tend to buy new energy vehicles, and the increase in market share also shows that the market's acceptance of new energy vehicles is increasing, which means that demand is increasing.
Car companies can raise prices again and again, perhaps it is determined that in the case of strong market demand, even if the price is raised, it may not be worried about selling.
Subsidies are gone, raw materials are soaring
The market share of new energy vehicles has increased, and the new market share will inevitably trigger a new round of competition for new energy vehicle companies, at this time, price increases are obviously not a wise move, from this point of view, under the tide of price increases, car companies also have their own grievances.
On the one hand, at present, the new energy market is still in the early stage of rapid expansion, car companies in order to seize the market, have increased investment in research and development, engaged in "equipment competition", the result is that everyone generally loses money. Even if it is a new force in the head of the car, "Wei Xiaoli" can not escape the fate of loss, the financial report shows that last year, the three companies lost a total of 9.1 billion.
On the other hand, since last year, the external environment for the development of new energy vehicle companies has changed, making their cost pressure increase sharply, which is the direct driving force for this round of price increases.
To put it simply, there are two major changes in the external environment of new energy vehicle companies: subsidies are gone, and upstream raw materials are soaring.
Let's start with the subsidy decline. According to the "Notice on the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles in 2022" and the subsidy plan jointly issued by the Ministry of Finance and other four departments on December 31 last year, there are two important information:
First, this year's subsidy standard for new energy vehicles will be reduced by 30% on the basis of 2021. Taking the mainstream models in the market with a driving range of less than 400 kilometers as an example, this year's subsidy will be reduced by 5400 yuan.
Second, new energy vehicles licensed after December 31 this year will no longer be subsidized by the state. This means that new energy subsidies will be officially withdrawn at the end of this year, and the cost pressure of car companies will hit at a speed visible to the naked eye in the future.
Subsidies for the purchase of new energy vehicles will be cancelled at the end of 2022 (Source: Official website of the Central People's Government)
For car companies, the biggest cost pressure comes from the soaring prices of upstream raw materials.
In general, 40% of the cost of new energy vehicles comes from power batteries. Lithium battery materials mainly have four parts: cathode material, anode material, diaphragm and electrolyte, of which the cathode material is the most critical raw material, which is related to the mass density of the battery, which in turn affects the cruising range of electric vehicles.
Therefore, in the cost of power batteries, the general cathode material accounts for about 40%. The main raw materials for power battery cathode materials are lithium cobalt oxide, lithium manganate, lithium iron phosphate and ternary materials, and the current mainstream power batteries of electric vehicles have two technical routes, namely ternary lithium batteries and lithium iron phosphate batteries. Among them, ternary lithium batteries will use lithium, cobalt, nickel three metals, while lithium iron phosphate batteries mainly use lithium carbonate.
Here's the point. Since last year, the prices of lithium carbonate, cobalt and nickel have begun to soar, and this upward trend has not eased this year.
Lithium carbonate prices have soared all the way (Source: Shanghai Nonferrous Metals Network)
According to data from Shanghai Nonferrous Metals Network, as of April 1, the average price of lithium carbonate reached 502,500 yuan / ton, compared with 68,000 yuan / ton at the beginning of last year, up more than 7 times; and cobalt (electrolytic cobalt) compared with the beginning of 2021, also rose nearly 3 times.
Some people in the industry have calculated that if the unit price of lithium carbonate, nickel and cobalt rises by 10,000 yuan, the cost of each GWh power battery will increase by 5.2 million yuan, 7.5 million yuan and 1 million yuan.
According to the data of The China Automotive Power Battery Industry Innovation Alliance, last year, the cumulative sales of power batteries in the mainland reached 186.0GWh, of which the cumulative sales of lithium iron phosphate batteries were 106.0GWh, which means that lithium iron phosphate batteries alone have increased the cost by at least 500 million yuan.
However, last year, due to the restrictions of the long-term contract, the cost of the price increase of battery raw materials was basically borne by the battery factory, and did not spread to the car companies. Therefore, it can be seen that last year, the gross profit margins of battery companies such as Sunwoda, Guoxuan Hi-Tech, and Penghui Energy all declined to varying degrees.
But since the beginning of this year, Ningde times, Guoxuan Hi-Tech and other battery giants announced price increases, the cost pressure of upstream raw materials transferred to the car companies, at present, new energy vehicle companies are still in the strategic loss stage, at this time, the upstream battery cost of the price transfer to consumers, is also a kind of throwing pot self-help.
How to reduce costs?
However, the pace of rising raw material prices does not mean to stop.
According to the calculation of Caixin Securities, it is expected that the gap between supply and demand of global lithium resources in 2022 is still 40,000 tons, which means that the upward trend of raw materials may continue.
Behind the gap between supply and demand, the supply speed of battery raw materials cannot keep up with the spurt of demand in the new energy market.
Because these battery raw materials have their own cycle, such as the power battery expansion cycle takes 6-8 months, raw materials generally take one and a half years, and lithium ore and other mining capacity cycle is longer, it takes two or three years.
Lithium battery industry chain (Source: Caixin Securities)
It is foreseeable that in the short term, this contradiction between supply and demand will continue to plague car companies, in other words, the pressure of rising raw material costs may continue, and the rising cost will be transferred to consumers, which is not a long-term solution after all.
In this way, how to eliminate the cost pressure caused by the price increase of upstream raw materials as much as possible has become a problem that car companies must face for a considerable period of time in the future.
Combing the current response measures of car companies, there are two main types: one is to target the non-rigid demand market, launch new products (models), and blur the price increase through the new pricing of new products, and use this to drive sales; second, direct strategic cooperation with upstream raw material manufacturers to reduce raw material costs from the source.
It can be seen that starting from the second quarter of 2022, there will be a number of new models on the market, such as the new forces of Weilai ET7, ET5, Ideal L9, Xiaopeng G9, independent car companies BYD Han DM-i, Great Wall Ballet Cat, Lightning Cat, etc., these products, basically for the replacement of upgraded models, the price itself has room for upward adjustment, when pricing new products, car companies can take into account the rising cost of raw materials, which can eliminate the impact of direct price increases.
Bright-looking Great Wall ballet cat (Source: Sohu)
On the other hand, with the price increase of lithium, cobalt and nickel ternary materials, although the ternary material battery is better in performance, but the comprehensive consideration of cost and safety, from last year, domestic and foreign battery factories, mainstream car companies have begun to turn to lithium iron phosphate batteries.
At the same time, some large car companies have begun to cooperate directly with battery raw material companies to lay out the supply chain of battery raw materials. According to the Financial Associated Press, on March 21, Volkswagen Group (China) announced that it has signed two strategic cooperation memorandums of understanding with Huayou Cobalt and Tsingshan Group, and intends to set up a joint venture with the latter in Indonesia and Guangxi respectively to help Volkswagen optimize battery costs.
Coincidentally, in February this year, FAW and BYD established a joint venture company, FAW Fordi New Energy Technology Co., Ltd., whose business scope includes the development, production and sales of power batteries and battery systems.
FAW Fudi New Energy Technology Co., Ltd. project started (Source: Sohu)
According to the latest data released by South Korean research agency SNE Research, in 2021, the market share of CATL in the global power battery industry will be 32.60%; BYD's market share will be 8.8%. The establishment of the joint venture company has also been interpreted by the industry as an important step for BYD to increase the market share of batteries through battery supply.
At present, mainstream car companies have adjusted prices twice or three times, and the rising cost of upstream raw materials has basically been transmitted, how will the follow-up new energy market develop? In the view of Zeng Duohong, chief securities analyst of Soochow Securities, in the context of the high-speed penetration of new energy vehicles, the main goal of car companies is still to increase market share, because in the long run, sales growth and market share can help car companies share fixed costs, but also the guarantee of the company's future performance.
From this point of view, the possibility of subsequent car companies to increase prices is unlikely, and even it is not ruled out that some car companies bear the pain of short-term gross profit margin decline in exchange for long-term stable growth of profits.
The author is | Qingxin, a reporter of "Salt Finance"