Survival of the fittest in new energy vehicles: how many opponents Tesla will kill

Shanghai, Huawei's flagship store in the new energy electric vehicle. Visual China infographic

The general loss of new energy vehicle companies may make it difficult for them to have the confidence to cut prices as sharply as Tesla.

On January 13, AITO announced that the price of the M5 EV and M7 comfort and luxury versions will be reduced by about CNY 30,000, becoming the first new automaker to reduce prices after Tesla. However, it is worth noting that unlike Tesla, its hot-selling model range extension M5 is not among the price reductions.

On January 14, when a reporter visited a Huawei store in Shanghai, he found that few consumers came to see the car. A salesperson told the surging news reporter that the store is located on the second floor of the mall, and there are originally few car buyers, and the news of possible price cuts has not yet been transmitted to consumers. The salesperson added, "It can't be said that we are following Tesla to reduce prices, we are not all price reductions, we hope to drive sales for models that are not very high, in fact, before the price reduction, we will also give a relatively good discount." ”

Losses are a common situation for new energy vehicle companies

"It is not ruled out that there are more elements of publicity," for AITO's price reduction method of "following and not following", an industry insider analyzed to the surging news reporter, "Tesla can maintain high profits after price reduction, there is sufficient space for price reduction, other car companies must also have their own trade-offs, or to maximize profits, capital patience is not unlimited." ”

In terms of profits, there is indeed no car company that can compare with Tesla.

In the third quarter of 2022, Tesla's total revenue was $21.454 billion, a year-on-year increase of 56%; Net profit was US$3.292 billion, up 103% year-on-year; Its automotive gross margin was 27.9%, compared to 30.5% in the same period last year. Based on this calculation, Tesla's net profit per bicycle is about 9,600 US dollars (about 67,000 yuan), and the net profit margin of the bicycle reaches 15%.

Gong Min, head of automotive industry research at UBS China, said at a recent exchange meeting that after Tesla cut prices, there is still a gross margin of about 20 points in the Chinese market, and there is still enough room to reduce prices.

On the other hand, the revenue of AITO's manufacturer Cialis in the third quarter of 2022 was 10.707 billion yuan, an increase of 163.39% year-on-year; However, the net loss was 947 million yuan, a year-on-year loss of 57.3%.

In fact, it is a common situation in the industry that new energy vehicles are not profitable. From the financial data of listed companies, whether it is NIO, Xpeng, Lili, Leap and other new forces in car manufacturing, or BAIC Blue Valley, which relies on traditional car companies, all of them continue to lose money. Among them, R&D expenses often account for a prominent proportion of the costs of new automakers. For example, Xpeng Motors' R&D expenditure in the third quarter of last year was 1.5 billion yuan, an increase of 18.5% year-on-year, and sales, general and administrative expenses were 1.63 billion yuan, an increase of 5.7% year-on-year. For example, Cialis sales expenses in the third quarter of last year reached 1.623 billion yuan, a year-on-year increase of 381.6%, and research and development expenses in the same period were 327 million yuan.

Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, previously introduced that new energy vehicle companies are basically in a state of loss, and in the first half of 2022, the profit of China's automotive industry fell by 25.5% year-on-year, and the revenue fell by only 4% in the same period.

Industry reshuffle? Increased cephalic division?

For when the new energy automobile industry can be profitable, industry insiders believe that the automobile manufacturing industry has a strong scale effect, overcapacity often brings price wars and other disorderly competition, after the survival of the fittest, advantageous enterprises can obtain more market share and achieve scale effect. "In fact, it can be thought that Tesla's hard roll, whether others follow or not, will accelerate the survival of the fittest to a certain extent, sacrifice profits with you, and lose sales if you are not strong in products." The aforementioned industry insider analyzed.

In the past 2022, a number of new energy vehicle companies are already in a crisis situation, NIUTRON Automobile founded by Li Yinan, founder of Xiaoniu Electric Vehicle, opened a full refund due to production qualification problems that could not be delivered, WM Motor has also been exposed many times to factory shutdown, financing is not in place, salary cuts and layoffs and other problems, Evergrande's Hengchi Automobile has repeatedly "thundered". Prior to this, there were already well-known new energy vehicle companies such as Sailin, Bojun, and Byton due to poor management.

"The characteristics of elimination and market clearance will be particularly obvious in these two years," Zhang Yongwei, vice chairman and secretary general of the China Electric Vehicle 100 Association, mentioned at the media conference held by the China Electric Vehicle 100 on January 12, adding that a large number of enterprises in the new energy automobile industry will be eliminated in recent years, "Unreasonable components will definitely be squeezed out, which is in line with the theory of industrial economics." ”

Zhang Yongwei believes that entering 2023, it is not ruled out that some companies and products have entered a turbulent period, the development of enterprises is not good, products and enterprises will withdraw, and this in turn may have some impact on the confidence of the industry, "Other industries have experienced, when we are on a large scale, it is easy to affect consumer confidence in the elimination stage." ”

However, Zhang Yongwei also stressed that after the big wave of the new energy vehicle industry, it may not be as highly concentrated as traditional car companies, from the perspective of market concentration theory, the past industrial development law of the automotive industry is a small number of brand concentration, but in recent years, electrification, intelligence more and more follow the characteristics of industrial evolution theory, the market pattern in the period of change, far from taking shape, Zhang Yongwei said, "There are some disruptive forces in the process, innovative forces into the existing track, concentration theory may not be established." ”

"We feel that the automotive industry is not lively enough in 2022, and it will be more lively in 2023," Zhang Yongwei predicted, adding that more players and more technological forces will participate this year, which will make the new energy automobile industry more concerned and more dynamic.