According to the latest data released by the China Association of Automobile Manufacturers (CAAM), the production and sales of new energy vehicles reached 425,000 units and 408,000 units in January, down 46.6% and 49.9% month-on-month, down 6.9% and 6.3% year-on-year, respectively, and the market share was 24.7%, reaching a low level. Since the beginning of this year, the major car companies have had a hard time. In addition to the Spring Festival holiday factors, the withdrawal of new energy vehicle subsidies is also an important reason for the decline in production and sales. Considering the high base at the end of last year, the current market decline is also expected, and the new energy vehicle market for the whole year of 2023 is still expected.
01
Production and sales fell back to the 400,000 unit range in January
In 2022, sales of new energy vehicles exceeded 6.8 million units, and monthly sales in the second half of the year continued to climb, exceeding 800,000 units in one fell swoop in December, constantly setting monthly sales records. In January this year, the production and sales of new energy vehicles fell back to 400,000 units, although the year-on-year decline was not large, but compared with the end of last year, sales were close to "slashing", which still caught major car companies by surprise.
Data show that in January, NIO delivered 8,506 new vehicles, down 11.9% year-on-year. Qin Lihong, co-founder and president of NIO, said that the first quarter of this year was the most difficult and challenging quarter in the past few years for the entire automotive industry, especially the electric vehicle industry. In addition to Li Auto's growth, new automakers such as NIO and Xpeng generally experienced a sharp decline in sales, with Nezha, Xpeng and Leap delivering 6,016, 5,218 and 1,139 units in January, down 45.4%, 59.6% and 85.9% year-on-year, respectively. Most traditional automakers outside of the new automakers have also experienced a sharp decline in sales. According to the data, GAC AION sold 10,000 units in January, down 36.3% year-on-year, and SAIC New Energy Vehicle sold 32,000 units in January, down 55.39% year-on-year.
Of course, there are also a few companies that have achieved a "good start". For example, in January, BYD sold 151,300 units, up 62.4% y/y, while Changan Automobile's own brand new energy vehicles sold 28,031 units, up 106.11% y/y. However, few companies have achieved sales growth, and in order to seize market share, the new energy vehicle market has even triggered a price war, causing market turmoil at the beginning of the year.
02
A combination of factors led to a decline in sales in January
In response to the sharp decline in sales in January, Qin Lihong believes that it is mainly caused by the superposition of three factors: First, consumers have different levels of activity in different periods, and similar situations have occurred in various places from December last year to before the Spring Festival, which has an impact on all walks of life, especially on new energy vehicles. After the Spring Festival, car-related consumption has not yet recovered, entering the traditional sales off-season; Secondly, since January 2023, the state subsidies for new energy vehicles have been officially withdrawn, and many manufacturers have failed to make adjustments in time, and the terminal price of models has fluctuated, which directly affects sales; Finally, the Spring Festival holiday leads to only about 16 effective working days in January, and some car companies may have longer Spring Festival holidays, which will inevitably affect the normal production and sales rhythm.
Luo Junjie, executive vice president of the China Machinery Industry Federation, stressed that due to factors such as the Spring Festival holiday, various statistics will be combined and released in January and February. There is a certain uncertainty in the data of the Spring Festival month, which is also an important factor in the fluctuation of production and sales in the new energy vehicle market in January. A self-owned brand car salesman told reporters that the new energy vehicle market will usher in a sales off-season at the beginning of the year, not only national policies, corporate marketing strategies will change, but also the announcement of car purchase indicators in restricted cities has lagged behind, which directly led to the downturn in the new energy vehicle consumer market at the beginning of the year.
In fact, in addition to factors such as the seasonal sales off-season brought about by the Spring Festival, the brief price increase of some models in January after the withdrawal of subsidies and the overdraft of sales at the end of last year also exacerbated the shock of sales in January. Chen Bin, deputy director of the Expert Committee of the China Machinery Industry Federation, said that the withdrawal of subsidies is a very big test for the new energy vehicle market, "Whether new energy vehicles can continue to maintain rapid growth this year is the key to determining the market-oriented development of new energy vehicles in the mainland." ”
Tong Zongqi, deputy secretary-general of the China Association of Automobile Manufacturers Charging and Swapping Branch and deputy secretary-general of the China Electric Vehicle Charging Infrastructure Promotion Alliance, said in an interview with China Automotive News that the fluctuation of production and sales in January was expected, but this short-term fluctuation will not have much impact on the growth of new energy vehicle sales in 2023. Qin Lihong also judged that the new energy vehicle market will maintain rapid growth in 2023, and the growth rate will be further improved. "It's really hard to see sales growth in January, but there's no contradiction between that and maintaining high growth throughout the year." Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, said that the consumption structure of the new energy vehicle market has changed last year, from the past U-shaped to spindle-shaped, and the sales volume of the mid-end consumer market has increased, which shows that consumers' acceptance of new energy vehicles has been further improved. At the same time, the increase in sales comes from the continuous enrichment of products, and more car companies are firmly promoting the transformation of electrification, bringing more and better products to meet the needs of consumers.
Luo Junjie emphasized that in the past few years, the mainland's new energy vehicle field has achieved remarkable technological progress and scientific and technological innovation. For example, the pain points and difficulties related to the attenuation of low-temperature driving range of pure electric vehicles have been greatly alleviated, and the quality, technology, and quality level of new energy vehicles have been greatly improved, coupled with the continuous improvement of the use environment, forming a good consumption atmosphere for new energy vehicles. Therefore, even after the withdrawal of state subsidies, there will be other support policies to jointly promote the improvement of the use environment of new energy vehicles, and then promote the market-oriented development of new energy vehicles.
03
Business survival is put to the test
As Qin Lihong said, the current new energy vehicle companies are facing a great survival test, and sales fluctuations are only one aspect, more of a problem at the level of enterprise survival. It can be seen from the financial reports of major car companies that except for a few companies such as Tesla and BYD, most new energy vehicle companies are in a state of loss, especially for those new forces in car manufacturing, on the one hand, the financial pressure brought by long-term high investment; On the other hand, there is the survival pressure brought about by the loss of selling cars and fierce market competition.
At the beginning of this year, after the withdrawal of state subsidies, more than 20 car companies took the lead in raising prices, but at the same time, Tesla set off a new round of price cuts around the world, triggering a price war. "Price reduction, high cost pressure, difficulty in survival; If the price is not reduced, sales will be affected. Chen Shihua said that in the face of fierce market competition, those new energy vehicle companies that have not yet achieved profitability are facing difficult survival problems. Chen Bin also said that the price war caused by Tesla has taught a lesson to the new energy automobile industry, and how to balance the pressure of cost increase and sales growth has become the main issue facing car companies.
In fact, the cost of new energy vehicles has continued to increase in the past few years. On the one hand, although the price of battery raw materials has fallen recently, it is still in a relatively high range, but at the same time, the terminal sales of new energy vehicles have fallen into the cruel competition of "unable to raise prices or even forced to reduce prices", which makes the cost pressure of enterprises particularly great; On the other hand, the tight chip supply problem has not been completely alleviated. "In 2021, the overall shortage of automotive chips eased in 2022, but it is still in a state of structural shortage. This structural shortage is expected to ease further this year, but the shortage of individual high-end chips still exists. The supply chain of new energy vehicle companies is under great pressure. Chen Shihua said.
Expert perspective
An Qingheng, Director of the China Automotive Industry Advisory Committee
At the latest, the car market returned to positive growth in the third quarter
The month-on-month decline in automobile sales in January this year is closely related to factors such as overdraft demand in December 2022, the cancellation of the "national subsidy" for new energy vehicles, and macroeconomic fluctuations.
First of all, at the market level, due to the spread of the epidemic, chip shortages, raw material prices and other factors throughout 2022, automobile production and sales have encountered many risks and challenges. Towards the end of the year, in order to complete the annual production and sales plan, car companies have adopted a variety of ways to increase promotion, which has led to an overdraft of demand in December last year. Entering this year, the cancellation of the national supplement for new energy vehicles, coupled with factors such as the high base in December last year, brought realistic pressure to new car sales in January.
Secondly, at the practical level, due to the global epidemic, foreign inflation, regional situation and other factors last year brought a greater impact on the domestic macroeconomy, the main manifestation is insufficient purchasing power, consumers did not or did not dare to invest a large amount of money to buy a car, and under the impact of the epidemic and foreign trade and other factors last year, the development of some small and medium-sized enterprises is more difficult, which also affects the purchasing power of the consumer market to a certain extent.
In addition, some public opinion is not optimistic about the development prospects of new forces in car manufacturing, which is not objective. The month-on-month decline in sales of new energy vehicles in January this year does not mean that there is no prospect for new forces in car manufacturing, nor does it mean that the new energy automobile industry has no future. Globally, almost all car companies are developing new energy vehicles, coupled with Tesla's price cuts, some new forces in the car manufacturing internal adjustment and other factors, which affected the sales of new energy vehicles in January. Therefore, although the market situation is relatively grim, whether it is growth or decline in January, it is a normal fluctuation and should be viewed correctly, this is only a short-term, phased performance, and in the long run, we should still strengthen confidence.
Third, from the perspective of development trends, the performance of the new car sales market in January this year is likely to affect the sales volume in the first quarter. Normally, January and February are affected by the Spring Festival holiday, but judging from the situation this year, January is more affected. From the perspective of the whole year, the first quarter will be affected, the second quarter will also be affected, and some unfavorable factors will be digested in the first half of the year, so as to grow in the second half of the year.
There are also many positive factors this year. Major car companies are setting development goals for 2023 and beyond, and most of the targets are high, indicating that car companies are full of confidence in the development of the car market this year. From the perspective of new energy vehicles, both sales and penetration rate have continued to grow significantly in the past two years, with certain advantages. Therefore, the overall pattern and trend of new energy vehicle development in 2023 have not changed, and the overall upward momentum of the industry is good.
Fourth, the gradual liberalization of epidemic prevention and control policies since December last year is beneficial to the macroeconomy, market circulation, and automobile consumption, and the introduction of new policies to promote consumption in various places is good for the auto industry and the market this year. In addition, due to the shortage of automotive chips in 2022, global automobile production will be reduced by 4.5 million units. However, now domestic BYD, Horizon and other companies have achieved domestic replacement of chips, although not the most high-end car products, but the chip supply "stuck neck" problem has been alleviated. At the same time, with the improvement of the domestic economic situation this year, the commercial vehicle market should also improve.
Overall, the auto market will return to positive growth by the third quarter of this year at the latest, and the growth of car sales throughout the year is worth looking forward to.
Wang Qing, deputy director and researcher of the Institute of Market Economy of the Development Research Center of the State Council
Firm confidence, the full-year car market is expected to grow by 2%
In the face of the data on new car sales in January this year, it should be viewed objectively and cannot be generalized as "decline".
First of all, from the perspective of the month, new car sales in January this year fell month-on-month, which is almost the norm every year, and the year-on-year data is more informative than the month-on-month data. From this year, the preferential policy of fuel vehicle purchase tax and the national subsidy policy for new energy vehicles have been terminated; At the same time, at the consumer level, there was an early consumption situation in December last year, and these factors had a certain impact on the sales of new cars in January this year.
At the same time, as a cyclical factor, the Spring Festival holiday has only 16 effective working days in January this year, except for holidays and weekends, while in January 2022 it is 21 working days, compared with 5 working days less, which will inevitably affect new car sales. As a result, it is normal for vehicle sales in January to fall by 35% y/y. Based on January passenger car sales of 1.469 million units, the average sales per working day was 92,000 units, and the average daily sales in the same period last year were nearly 94,000 units, a year-on-year decrease of about 2%. In terms of new energy vehicles, sales averaged about 16,000 units per day in January last year and 23,000 units in January this year, a year-on-year increase of more than 40%. In general, since the Spring Festival holiday last year was basically in February, and the number of working days in February this year exceeded the same period last year, it is likely that new car sales in February will achieve year-on-year growth. Therefore, January's new car sales data is still a normal cyclical fluctuation, there is no need to interpret too much, and the overall new energy vehicle market is still worth optimistic about.
Secondly, from the perspective of the whole year, although there may be certain fluctuations in January ~ February, the growth rate of the entire automobile market will maintain an upward trend from the second quarter. Because this year, both the economic growth rate and the impact of the epidemic on society and consumption are developing in a more positive direction. The improvement of economic growth and the clear trend of improvement will drive the steady recovery of the entire automobile market and drive the production and sales of automobiles to improve. Therefore, the economy is expected to be stable, consumer incomes increase, automobile consumption upgrades, including automobile replacement and the growth rate of the sinking market, will return to the normal track. However, it is worth noting that the recovery of the market has a certain lag, which is reflected in the need for a transmission cycle from the recovery of the economy to the recovery of automobile consumption. Therefore, the growth rate of car sales in the second half of this year will be better than in the first half.
At the end of last year, I predicted that vehicle sales in 2023 would increase by about 2% year-on-year, and I still maintain this judgment. Because after the cyclical fluctuation of car sales in January this year, the growth of car sales in the second quarter will flatten the decline in the first quarter to some extent, and there are significantly more working days in the second quarter, so there is likely to be a higher sales increase.
Third, from a macro perspective, there will be restorative macroeconomic growth this year, which will also be reflected in the speed of economic growth and consumption, but this requires a transmission cycle, not immediate results. Because income and spending power have been affected during the three-year pandemic, consumers are reluctant to spend. In terms of favorable factors, this year, from the national to the local level, the focus on expanding consumption is more obvious. The state has taken expanding domestic demand and expanding consumption as an important policy goal, so from the national to the local government has successively introduced relevant policies to promote automobile consumption, and automobiles are the main play to stimulate domestic demand, and the pulling effect of these policies will gradually appear.
From the overall situation of the whole year, the automobile market may have a relatively high growth rate in the second and fourth quarters, and a year-on-year decline in the first and third quarters, but the general trend is that the automobile market will develop in a better direction in the second half of the year.
Fan Yongjun, Secretary-General of Chengdu New Energy Vehicle Industry Promotion and Application Promotion Association
Car companies have the ability to eliminate the impact of the withdrawal of state subsidies
In January this year, mainland new energy vehicle sales reached 408,000 units, down 49.9% month-on-month and 6.3% year-on-year. According to the month-on-month decline ratio, there is a "waist cut" on the Internet, and many public opinions believe that this is the impact of the withdrawal of new energy vehicle national subsidies, and I do not agree with this view. The withdrawal of new energy vehicles is mainly due to the reduction of subsidies for enterprises, which has no direct impact on the market and consumers, and car companies will digest by optimizing design and technology, controlling the purchase price of parts suppliers, etc. Therefore, the withdrawal of new energy vehicle subsidies does not have much impact on the overall sales of new energy vehicles.
From the perspective of subdivision, the current high-end electric vehicles are basically not affected by the withdrawal of subsidies, A0 class small cars have a limited impact due to less subsidies, and mid-price models may have a certain impact, but car companies are also looking for ways to reduce the impact in this regard. Mainland new energy vehicles are accelerating the transformation from policy-driven to market-driven. The month-on-month decline in January sales was mainly due to the overdraft of sales due to the promotion of the full-year plan by automakers in December last year, and the reduction of working days due to the Spring Festival holiday in January this year.
The domestic macro economy will pick up this year, and relevant institutions predict that the gross domestic product (GDP) growth rate this year will be 5%, including the auto industry, which is full of confidence. With the full lifting of the epidemic lockdown and a series of measures at all levels at the national and local levels to expand automobile consumption, the consumption of new energy vehicles will gradually heat up.
The export trend of new energy vehicles will continue to improve. In January this year, new energy vehicle exports reached 83,000 units, up 1.1% month-on-month and 48.2% year-on-year. From the data, the year-on-year increase is large, indicating that exports are facing a good opportunity period. In the past two years, Continental New Energy Vehicles has expanded its territory on the basis of its first-mover advantage, whether it is SAIC, BYD, Geely, or new automakers NIO and Xpeng, etc., are vigorously exploring overseas markets, and exporting countries cover Europe and Southeast Asian markets. Among them, it is inseparable from the efforts of domestic car companies in terms of technology and market strategy, and is also related to changes in demand in overseas markets. For example, the European market is experiencing an energy crisis, due to the tight energy supply and supply chain problems brought about by the regional situation, the production of local car companies has been affected, and the European market urgently needs to import new energy vehicles to make up for the shortage, which are all opportunities for Chinese new energy vehicle companies.
Text: Wang Jinyu Zhao Jianguo Editor: Chen Wei Format: Wang Kun
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