Electric vehicle price increase business: direct rise, indirect rise, disguised rise, but there is actually a price reduction

The Economic Observer reporter Pu Zhenyu's electric vehicle price increase since March has continued to affect more brands. This round of automobile price increases is the result of the tight supply and demand of the raw material market, but the price increases and price increases of different car companies are very different.

According to the incomplete statistics of the Economic Observer reporter, in the more than half a month since the end of March, more than 15 car companies such as SAIC Passenger Cars, FAW-Volkswagen, SAIC Volkswagen, Tesla, BYD, Chery, Nezha, WM, Geely, GAC Ean, Xiaopeng, Weilai, Great Wall, and Zero Run have joined the ranks of price increases, and more than 40 models have increased the price of the market terminal.

Specifically, Xiaopeng Automobile is a car company with the highest price increase, and the price increase of its main models P7670E and 670E+ exceeds 30,000 yuan, reaching a maximum of 32,600 yuan. The same as the zero run of the new car manufacturer, its current main pure electric SUVC11 increased by 20,000-30,000 yuan. Although Tesla's Model 3 and Model Y models have only raised prices by 10,000 yuan, this is based on the fact that it has already raised prices in January.

Except for a few brand models whose prices have increased by more than 30,000 yuan, the price increases of most electric vehicles are relatively conservative. The price increase of BYD, Geometry, Roewe, Chery, Nezha and other car companies is within 10,000 yuan, and more than half of the electric vehicle models have increased by less than 3%, including the Weilai ES8, which is priced at more than 400,000 yuan.

Interestingly, some companies directly adjust the official price, but some car companies choose to indirectly achieve price increases through dealers to reduce terminal discounts, and some car companies choose to increase prices in disguise in the name of modified models, of which individual remodeled models have reduced the configuration while increasing the price, which has led to the controversy of "price increase and allocation reduction", and some car companies have used three types of price increases at the same time.

Behind the difference in price increases and strategies are the differences in the strength and strategy of car companies. Yan Jinghui, an analyst in the automotive industry, said that some large car companies have a strong control over the supply chain, and most of the cost pressure can be transferred out, or digested through internal synergies, and the remaining small part of the pressure can be resolved through a slight increase in car prices. However, there are more car companies that do not have such strong energy, and small direct price increases cannot completely resolve the cost pressure, and can only take more and more complex operations to alleviate the cost pressure.

So, in this round of price increases, which car companies are facing more pressure? When will the problem of high raw material costs for electric vehicles be truly solved? Since the beginning of the year, the electric vehicle market has seen two waves of price increases due to subsidies and raw material price increases, will there be a third round of price increases in the future?

A variety of ways to increase prices

Unlike the general increase in the price of electric vehicles of independent brands and new car brands, the prices of electric vehicles from the "oil to electricity" of many joint venture brands have not directly increased this year.

The Economic Observer reporter found that GAC Toyota C-HREV, FAW Toyota Yize E into the engine, FAW -Volkswagen Audi Q2Le-tron and other models have appeared terminal preferential shrinkage, of which yize E into the engine discount shrinkage is the largest, last year's highest discount of 110,000 yuan, now only 80,000 yuan discount, the discount reduced by 30,000 yuan; C-HREV is now preferential 40,000 yuan, last year's highest discount of 50,000 yuan; Q2Le-tron is now preferential 45,000 yuan, last year's highest discount of 70,000 yuan.

Cui Dongshu, secretary general of the Passenger Car Market Information Joint Association, told the Economic Observer that the joint venture brand "oil to electricity" models that have not increased in price are sold through traditional 4S store channels, and their sales logic is the same as that of ordinary fuel vehicles, which do not require direct price increases, and can digest cost pressure by adjusting the indirect price increase of terminal preferential margins.

There are also individual joint venture brand "oil to electricity" models that have not performed well in the market, and there has been no change in both the official price and the terminal discount.

The sales staff of a Beijing Hyundai 4S store told the Economic Observer that Festa pure electricity did not increase in price, and the current cash discount is 70,000 yuan, which is similar to last year. However, there is no existing car in the store, and it takes at least more than a month to order a car, "This car is not selling very well, and now there is a shortage of parts, the enthusiasm of manufacturers (production) is not high, and it does not matter whether the price rises or not."

The hidden price increase is not a patent for the listing of "oil to electricity" models. Some native electric models have also quietly raised the purchase threshold of various models through the form of replacement and replacement.

Overall, while the price increase in disguise in the form of a replacement, the new model is generally better than the old model in terms of configuration, and the relevant car companies hope to hedge the negative impact of the price increase through the form of "increased quantity".

Taking ID.6X as an example, the 2022 ID.6X full range of models is updated with the upgraded version of the intelligent vehicle connection system 4.0, and adds functions such as electric folding of the exterior mirror and the welcome lamp, while the intelligent parking assistance system is also added to the smart parking assistance system for the models with long endurance and above, and the pure long-endurance version and the Elysium long-range version are newly equipped with a 360° bird's-eye panoramic panoramic visual parking assistance system.

Bai Yiyang, manager of the international research department of CMB and an analyst in the automotive industry, told the Economic Observer that the way to drive price increases is more reasonable, but behind this needs to be accompanied by the support of the brand, so this method is only suitable for head car companies.

Will the third round of price increases occur?

Since the beginning of this year, although electric vehicles have experienced two rounds of price increases, it does not mean that the cost pressure of car companies has been completely resolved. Cui Dongshu said that this round of price increases is relatively rational, and manufacturers have not completely passed on the cost pressure to the terminal price. In fact, most of the cost pressure manufacturers have chosen to find their own ways to digest internally, and only a small part of the pressure is directly passed on to consumers.

As we all know, the cost pressure of electric vehicle companies mainly comes from the high price of raw materials for electric vehicles, and the fundamental reason for the high price of raw materials lies in the contradiction between supply and demand. So, when will the problem of high raw materials for electric vehicles be solved?

At the recent monthly information conference of the China Automobile Association, Ma Xiaoli, deputy secretary-general of the China Automotive Power Battery Industry Innovation Alliance, said that the pressure on supply and demand of raw materials is still huge in the short term, "We may be in a tight balance this year according to the demand and supply situation, from the perspective of resource reserves, the amount of resources in the short term of 3-5 years can actually meet the needs of development, but the misalignment of upstream and downstream production capacity matching and the mismatch of the expansion cycle may continue to cause a certain impact."

Xu Haidong, deputy chief engineer of the China Automobile Association, also said that the cycle of power battery expansion takes 6-8 months, raw materials generally take one and a half years, and lithium ore and other mining capacity increases need two and a half to three years, so the raw material industry and the battery industry in the vehicle and vehicle market development information asymmetry, that is to say, the construction of raw material capacity is relatively lagging behind, and it is difficult to solve the problem in the short term.

However, tight supply and demand at the resource level are not the only factors contributing to high raw material prices. Ma Xiaoli said that there is malicious speculation in the power battery raw material market, and some traders have earned a relatively high price difference in the middle. Cracking down on malicious speculation, although it cannot fundamentally solve the problem of high raw materials for electric vehicles, it can play a certain role in stabilizing market prices. "The Ministry of Industry and Information Technology, the Development and Reform Commission, the Association, including some other institutions have done a lot of work to varying degrees on the rise in material prices, and it is gratifying that after a month's efforts in March, basically the price of lithium carbonate has appeared a stable situation, at least for now, there is no longer such a situation as a daily rise of 5,000 yuan and 10,000 yuan, and we look forward to slowly returning to normal later." Ma Xiaoli said.

It is good news that raw material prices are beginning to stabilize, but it may not be enough for those new car manufacturers and small and medium-sized car companies that are weaker.

An insider of a new car-making company told the Economic Observer that the price increase of its products was not determined entirely based on cost changes, but was determined by comprehensively weighing various factors. The pressure is not too much at all, but I don't dare to rise too much. Therefore, the price increase can only resolve part of the pressure, and the remaining pressure can only be resisted. Even if the price of upstream materials remains stable in the future, neither rising nor falling, enterprises will continue to face greater pressure.

In this case, whether there will be an unstoppable electric vehicle company in the future to set off a new round of price increases, the industry view is unlikely. Cui Dongshu believes that although many electric vehicle consumers are rigid demand, their ability to bear price increases is also limited, if the price of raw materials continues to be at a high level, manufacturers can only find ways to bear cost pressure in the future, and it is impossible to continue to increase prices round by round.

Bai Yiyang also said that even if the situation of high raw material prices does not improve, most electric vehicle companies should not increase prices again, because the current demand side is not so strong, after the price increase, the order volume of some new car brands has begun to decrease, and companies may even reverse the trend of price increases after seeing orders and sales decline.