After the oil price soared, should I still buy a car this year?

Oil prices are rising again.

Just entered April, this year's oil prices have risen for six consecutive years. In particular, on March 18, it directly pushed No. 95 gasoline into the 9 yuan era, setting the largest increase since the new version of the price adjustment mechanism in 2013.

As of the end of the article, the average domestic oil price was 8.74 yuan on the 92nd, 9.30 yuan on the 95th and 10.28 yuan on the 98th; while in December last year, the oil price per liter was still 7.03 yuan, 7.48 yuan and 8.46 yuan.

The owners complained bitterly: now it is not the oil that is added, but the tears of the owners. Simply set your sights on electric vehicles.

However, the disaster is not alone, and electric vehicles have also risen.

According to incomplete statistics, this year there have been more than 50 electric vehicles of more than 20 car companies, as little as three or four thousand, high as 20,000 or 30,000, including many popular models, such as BYD Marine series price increase of 3000 ~ 6000 yuan, cost-effective artifact Wuling Hongguang MINI EV price increase of 4,000 yuan, Tesla Model Y price increase of 21,000 yuan.... In addition, Xiaopeng, Ideal, Nezha, Extreme Krypton, Eian, and Volkswagen are also included in the list.

Then the question comes, all say buy down not buy up, hesitant to buy a car this year, in the end do you want to start?

First give the conclusion: if there is a demand for a useful car within two years, you can buy it. Because this time the party may have to lose. Why? The following is a chat about the author's ideas, for reference only. If you disagree, you're right.

In fact, whether to buy a car now is nothing more than two factors: (1) the urgency of using the car; (2) the possibility of price reduction.

The first good understanding is to see whether you are eager and just need to use your car. It is just needed, how to rise to buy; not just needed, and then preferential is also a waste of money.

The second problem is whether the electric vehicle can be reduced to the original price, which depends on whether the "price increase factor" can be solved in the short term.

Price increase factors and mitigation time

According to EV Sales statistics, in 2020, global car sales fell by 14%, while global electric vehicle sales reached 3.125 million units, an increase of 41% year-on-year; in 2021, global car sales increased by only 4%, but global electric vehicle sales reached 6.5 million units, an increase of 109% year-on-year.

Contrarian growth would have been good news, but the balance between supply and demand has been broken, which has also brought a series of problems.

Raw material for lithium batteries

Electric vehicles need batteries, and batteries need lithium.

Since 2014, China has been the world's largest consumer and manufacturer of lithium batteries, but 70% of the raw materials for lithium salts rely on imports. According to USGS data, China accounts for only 6% of the proven lithium resources in 2020, and the vast majority of the reserves are distributed in the salt lakes of South America and the lithium mines of Western Australia.

The expansion and exploitation of salt lake resources in South America will only reach a peak in 2021, but the resource development cycle is long, and the infrastructure in South America is relatively backward, and it is expected that at least until 2023 there will be a considerable increase.

On the other hand, the expansion of lithium ore production in Australia is also full of uncertainty, Australia itself is facing the dilemma of labor shortage, coupled with poor ore grade, lithium concentrate production in the fourth quarter of 2021 even fell by 6%.

The demand for rapid warming up far exceeds the speed of supply of upstream materials. So we see the data of Shanghai Steel Federation: at the beginning of 2020, the price of lithium carbonate was still maintained at about 50,000 yuan / ton, but by the beginning of 2022, it had risen to 500,000 yuan / ton, directly doubling tenfold.

If we refine it to an electric car, equipped with a 60kWh battery pack, it will take about 50KG of lithium carbonate, and the cost alone will rise by 22,000 yuan compared with the low point. This is also why Euler said that his black and white cat sold one at a loss and was forced to stop taking orders.

It is not only lithium carbonate that is rising in price, but also other battery materials.

London Metal Exchange (LME) data show that in January last year, the average price of electrolytic cobalt was about 270,000 yuan / ton, and now it has exceeded 560,000 yuan / ton; in March, nickel reached a maximum of 100,000 US dollars / ton, reaching the highest value in 35 years; in addition, copper, aluminum and electrolyte materials such as lithium hexafluorophosphate, the price is also rising. One price a day becomes the norm.

Fitch Group, one of the world's three major rating agencies, expects that the shortage of supply in the global lithium market will show an aggravating trend, and the supply of lithium resources may become the largest gap in the new energy vehicle industry chain. Under this influence, the price of new energy vehicles will continue to rise in a certain period.

At the 2022 Electric Vehicle 100 Forum held in March, Ouyang Minggao, an academician of the Chinese Academy of Sciences, also released the same view: the balance between supply and demand of lithium resources will not return to normal until 2 to 3 years later. That is, lithium costs are unlikely to reverse the rally in the short term.

Therefore, the cost of lithium batteries is difficult to alleviate in the short term.

Chips are in short supply

The chip crisis has lasted for nearly three years, affecting not only the consumer electronics industry, but also the automotive industry.

Due to intelligent attributes, new energy vehicles have put forward great demand for chips, and since the epidemic, many car companies have reduced vehicle production and allocation due to lack of cores. According to Data from Auto Forecast Solutions, the global automotive market has cut production by 1.158 million units this year due to chip shortages.

In 2021, when the chip shortage was the most severe, the price of an ESP chip has risen from about 20 yuan to 2800 yuan, the price has increased by 140 times; and the most important power semiconductor IGBT on electric vehicles has also increased by 22%, and Infineon is still issuing a price increase letter this year.

Chip supply is in short supply, but also because of the rules of the semiconductor industry and the misjudgment of car companies.

On the production side, the expansion of production capacity in the semiconductor industry has always been more cautious, with an annual growth rate of only about 6%; for the mature process and traditional process wafer production lines that automotive chips rely on, the expansion is more conservative, and the annual growth rate of production capacity is only 2%.

The new sales model and intelligent production mode brought by the new forces have gradually favored car companies to "low inventory" or even "zero inventory", and most of them have adopted the Just-in-Time punctual management model for suppliers, and chip suppliers can only passively cooperate and be cautious about the expansion of production capacity.

When the global epidemic first broke out, manufacturers significantly reduced their forecasts for chip demand. The consumer market has rebounded unexpectedly, and when the car factory is temporarily aroused, chip production capacity has become a scarce resource. Coupled with the difficulty of resuming work, transportation restrictions, regional blockades and other factors, all of them cast a shadow of uncertainty on the supply chain.

At present, the global 6-inch chip foundry capacity has been fully loaded, and the new capacity cannot be activated for a while. Some industry insiders revealed that the global supply of IGBT will not be significantly alleviated until 2023.

Therefore, the problem of chip shortage is difficult to alleviate in the short term.

There is no subsidy for going back

Subsidies are accompanied by the growth of the new energy vehicle industry.

On December 31, 2021, the Ministry of Finance and other four ministries and commissions jointly issued a notice that the subsidy standard for new energy vehicles in 2022 will be reduced by 30% compared with 2021; new energy vehicles licensed after December 31, 2022 will no longer be subsidized by the state.

That is to say, this year's subsidies for new energy vehicles continue to decline; next year, there will be no direct subsidies.

Subsidies play a very critical role in the pricing of new energy vehicle companies' products. Taking Xiaopeng Automobile as an example, the basic version of xiaopeng P7 has an endurance of 480 kilometers, if the average monthly sales volume is 10,000, the annual sales volume is 120,000 vehicles, the bicycle subsidy is reduced by 5400 yuan, and the subsidy income will be reduced by 648 million yuan a year. According to the financial report data of Xiaopeng Q4, Xiaopeng's net loss in Q4 of 2021 is also 1.29 billion yuan.

Comparing the two figures together, it should be possible to understand how much the impact of subsidy changes on car companies is.

That is to say, the current price increase tide may not be the highest point, and when the subsidy is fully cancelled next year, there will be a wave of collective price increases for new energy vehicles.

Therefore, the problem of subsidy decline is a problem that cannot be solved but needs to be dealt with.

Pricing that is easy to rise and hard to fall

Finally, consumers do not buy cars directly from the supply chain, and car companies are in the middle, and they also have to make money.

In order to compete with fuel vehicles for the market, new energy vehicles need to fight a price war; but a price war will compress their profit margins. New energy vehicle companies have long been bitter.

In the past few years, the prosperity of the electric vehicle market and the take-off of the lithium battery industry have largely relied on the support of national policies, including industrial incentives, subsidy protection, and license restrictions. At the same time, there is also a wind outlet investment from the capital market to "gamble on the future". It is these reasons that allow electric vehicles to bite the price and compete with fuel vehicles.

If you want to investigate deeply, the price increase in the upstream of the industrial chain has already appeared. Various metal futures have been rising for 1 to 2 years, and the entire commodity market has few exceptions. It can be said that electric vehicles have been hard for two years before the cost is transferred from the upstream to the consumer side.

Because before that, no one dared to be the head bird, and the first price increase must be the first to be scolded.

However, the sudden change in the international economic environment has become the last straw that crushes the camel. Until everyone collapsed and could not lift the collective price. Of course, this is a more pessimistic speculation: the price after the price increase is the normal price, and the previous price only relies on the price of subsidies, points and other policy dividends.

That is to say, in the future, even if the upstream cost of the supply chain is reduced, it will be difficult for car companies to give up the rising price and return the profits to consumers.

Therefore, regarding the pricing of the product, although it may not necessarily rise, it should be difficult to fall again.

Worried about whether he will join the national army in 49 years?

Some people will hesitate, is it 49 years to buy an electric car now?

Here you can take a look at the current technological trends of electric vehicles.

The power of electric vehicles has been excessive, and this will not be repeated.

The biggest constraint now is battery technology. Whether it is a relatively low-cost lithium iron phosphate battery or a ternary lithium battery with the main endurance, they have not made much breakthrough progress in the chemical level in the past two years.

Although the battery life data in the past two years has still improved, most of these improvements have been achieved through physical optimization methods such as CTP. This involves the optimization of the body space, and it is also easy to encounter bottlenecks.

The technology closest to qualitative change may be Tesla's 4680 battery, but it has not yet accurate landing time, and Musk also stated that there is no need to pursue 1000 kilometers of endurance. Most likely just to increase energy density and reduce the weight of the battery pack, thereby improving energy efficiency.

Other technologies that can dramatically change the characteristics of batteries, such as solid-state batteries and graphene batteries, are still far from large-scale commercialization. Don't worry too much in the short term.

At this time anchor, there are two main technical iterations that can be expected: one is a higher power fast charge, but it relies on the rollout of supercharge infrastructure; the other is the reduction of the cost of lidar to improve the auxiliary driving ability of the vehicle.

If you care about these two technologies, you can wait. If you think it's just the icing on the cake, then buying a car now won't suffer any technical losses.

In short, the current evolution of electric vehicles has slowed down compared to previous years, that is, the vehicles purchased now will have a longer service life cycle without feeling obsolete.

Not only is it difficult to fall, but it is also possible to rise

If we look at it from a more macro perspective, we can also offer some advice on whether to consume or not.

As of December 2021, 15 of the world's advanced economies (34 countries), as defined by the International Monetary Fund, have inflation rates of more than 5% in 12 months. This sudden and synchronized jump in high inflation rates is unprecedented in more than 20 years.

In general, mild inflation can drive socio-economic growth. But excessive inflation can lead to a rapid depreciation of the currency, which is reflected in a sharp increase in prices.

Although cars are consumables, they are not investments. But the impact of inflation is that the cost of buying a car will be greater.

Since the outbreak of the epidemic, in order to stimulate economic recovery, Western countries have issued large-scale government bonds to expand fiscal expenditures, and released a large amount of liquidity through quantitative easing policies such as the purchase of government bonds. When the economy restarts rapidly, supply is blocked and demand is high, accompanied by fluctuations in the international situation, regional financial blockades, so that oil and gas output is limited, transportation is not smooth, and continue to stimulate the rise in price levels.

For now, this inflation situation will continue for some time. Because in the face of low global economic growth and high debt levels, countries continue to restore the economy, ensure employment, and stabilize society as their top priorities, and their tolerance for rising prices has increased, and fiscal and monetary policies have shifted to more cautious.

In addition, it also includes the changes in the employment situation and concepts caused by the epidemic, the turmoil of private enterprises, the layoffs of large companies, the forced flexible employment and frequent job transfers of people, and the problem of supply disorder, which is also difficult to alleviate in the short term.

In March, Tesla CEO Musk tweeted that Tesla and SpaceX are facing huge inflationary pressures in raw materials and logistics, and many commodity prices have reached their highest levels since 2008, from the aluminum used in the frame to the nickel needed for batteries.

Musk suggested that in times of high inflation, owning physical assets would be better than holding cash. After all, inflation, if there is no financial plan, the money is just a bunch of depreciating numbers.

Forecasts within the industry are also not optimistic

For this year's wave of electric vehicle price increases, the ideal CEO Li wants to state on the public platform: (currently) there is no price increase, most of them are that the price increase has not been negotiated, and the price will generally increase immediately after waiting for the negotiation. The increase in battery costs in the second quarter was outrageous.

In addition, YYP, a well-known domestic car critic, also learned through private channels that most new energy vehicles will increase in price in the next few months.

Whether it is the upstream fundamentals or the actions of car companies, or even the predictions of industry insiders, it shows that in the short and even in the medium term, the cost of electric vehicles will not fall significantly. It can be said that as long as the demand for car purchase is not far away from two years, buying as soon as possible can better avoid the risk of price increases.

Buying a car is about consumption, not investment

After economic globalization, almost all commodities need world cooperation. Electric cars are no different. The length of this industrial chain, the scale of the participants, and even any change in the link will transform into butterfly wings.

You can understand that the key factor affecting price volatility at present is not technology or marginal costs, but shocks in global supply chains. The solution of a single problem is difficult to support the decisive decline in the cost of the industrial chain. I am afraid that everyone has also felt how complicated the international situation has been recently.

Thus, the above personal analysis supports the following conclusions:

If you have a need for a useful car in two years, buying a car now is a wise choice.

Of course, buying a car is a consumption rather than an investment. Cost is only one dimension of a car purchase, not the whole story. Even if the price of electric vehicles falls after two years, it will not offset the use value of vehicles during this period.