"Oil and electricity replacement" accelerates the "rush" of car companies in the market below 100,000 yuan

As soon as the construction started after the Spring Festival, the automobile market was full of gunsmoke, and the price war escalated again. From February 19th to February 20th alone, BYD, SAIC-GM-Wuling, Changan Automobile, Nezha Automobile, Beijing Hyundai, SAIC-GM Buick, Geely Automobile and many other car companies participated in a new round of price war through new car listings or price reductions.

At present, the first products to participate in this round of price war are all new energy vehicle products, and plug-in hybrid models are the mainstay, and the price range is concentrated in the low-end market of 100,000 yuan and below. After the price reduction, the price of these new energy vehicles will be directly inserted into the market hinterland of joint venture fuel vehicles. This is seen as a further declaration of war on joint venture fuel vehicles by autonomous new energy vehicles.

In the face of the oppressive attack of new energy, traditional car companies such as Beijing Hyundai and SAIC-GM Buick have also begun to launch counterattacks and reduce prices for relevant competing models.

"The price war in the national passenger car market will remain fierce this year. From the perspective of fuel vehicles, the decline in the cost of new energy and the 'same price of oil and electricity' have brought huge pressure to fuel vehicle manufacturers. Cui Dongshu, secretary general of the China Passenger Car Information Association, said in an interview with the Economic Observer that in this case, the pressure on fuel vehicles will also rely more on preferential prices to continue to attract customers, which will lead to further intensification of the industry price war.

New energy vehicles "kill crazy", fuel vehicles counterattack

BYD, as the leader of the current automotive industry, fired the first shot of the price war after the Spring Festival this year. On February 19, the BYD Qin PLUS Glory Edition and the Destroyer 05 Glory Edition were officially launched, both of which are compact family car types, among them, the starting price of the BYD Qin PLUS Glory Edition DM-i version was reduced to 79,800 yuan, which is 20,000 yuan lower than the starting price of the Qin PLUS DM-i 2023 Champion Edition launched last year. The starting price of the Destroyer 05 Glory Edition is also only 79,800 yuan.

BYD has always had the ambition to replace fuel vehicles with new energy vehicles. As early as 2021, Wang Chuanfu, chairman of BYD, said that the battery, motor, electronic control and other technologies of electric vehicles are becoming more and more mature, and they have fully surpassed fuel vehicles, and the time is ripe for electric vehicles to fully replace fuel vehicles. However, due to the high cost of batteries, this goal was not achieved as scheduled. When BYD completely transformed into new energy vehicles, its desire to replace fuel vehicles with new energy vehicles became more urgent.

In the press release of the launch of the Qin PLUS Glory Edition, BYD emphasized that the launch of this car officially opened a new era of "electricity is lower than oil". It can be seen that among the 9 new energy vehicle models that are compact and above and less than 100,000 yuan on sale, the starting price of the Qin PLUS Glory Edition and the Destroyer 05 Glory Edition is the lowest.

BYD's disguised price reduction has detonated a new round of price reductions for new energy vehicles. On the same day, SAIC-GM-Wuling announced that the price of the 150km advanced version of its Wuling Starlight plug-in hybrid model was adjusted from 105,800 yuan to 99,800 yuan, and the price was reduced to less than 100,000 yuan. Wuling Xingguang positioning medium-sized sedan, after the price reduction, it has become the only new energy model of the whole series of medium-sized sedan below 100,000 yuan.

Changan Automobile also announced a price cut on February 19, launching a limited-time special offer for its Changan Qiyuan A05, with a minimum sale of 78,900 yuan. This car is also a plug-in hybrid model, positioned as a compact sedan, with the original guide price of 89,900 yuan. Changan Qiyuan is a new new energy vehicle brand launched by Changan Automobile in August 2023.

On February 20, Geely Automobile also joined the battle, and its compact plug-in hybrid sedan Emgrand L Hi· The P Longteng version was launched, and the price was reduced by at least 20,000 yuan compared with the champion version, and the starting price was reduced to 89,800 yuan, joining the market melee below 100,000 yuan.

At the same time, pure electric vehicles and extended-range electric vehicles have also been added. On the evening of February 19, Nezha Automobile announced a number of price reductions for its main models, among them, Nezha X reduced the price of 22,000 yuan for all models, and added a new 400 Air version of the model to choose from, with an official guide price of 99,800 yuan, which reduced the starting price of Nezha X to less than 100,000 yuan. In addition, the price of Nezha AYA is reduced by 8,000 yuan, and the price of Nezha S is reduced by 5,000 yuan.

After the price war provoked by new energy car companies led by BYD, traditional car companies could not sit still. On February 19, the Elantra model was reduced by 24,000 yuan, with a starting price of 75,800 yuan, and threw out the slogan of "oil is stronger than electricity", and BYD's "electricity is lower than oil" needle tip to Maimang, aiming to defend the advantage of fuel vehicles in the market below 100,000 yuan. The Elantra is a compact sedan owned by Beijing Hyundai that has been selling well for many years, with a cumulative sales of 109,000 units in 2023.

SAIC-GM's Buick brand also announced that it will offer price reductions or replacement subsidies for some models for a limited time, including Buick LaCrosse, Valeant Pro, and Envision Plus models, with a discount of 35,000-65,000 yuan. Among them, the price of the compact sedan Valeant Pro has also dropped to below 100,000 yuan after the price reduction.

The "battle for oil and electricity" will intensify the price war

This round of car price reduction was first started by new energy vehicle models, and collectively aimed at the market range of less than 100,000 yuan. This marks that independent new energy vehicles have officially launched a strong impact on the joint venture fuel vehicle range.

In the domestic automobile market, the A-class car market of about 100,000 yuan has always occupied a very large market share, and it is the "battleground" of car companies. However, due to the high cost of new energy vehicles, the majority share of this market segment has been occupied by joint venture fuel vehicles for a long time, and joint venture models such as Sylphy, Lavida and Sutar are hot sellers in this market. Marked by this wave of price cuts, the price of new energy vehicles is lower than that of fuel vehicles.

On the one hand, the current price of battery raw materials has dropped sharply, providing conditions for the price reduction of new energy vehicle products. According to the latest data, battery-grade lithium carbonate has dropped from the previous price of nearly 600,000 yuan/ton to less than 100,000 yuan/ton now. In this case, it is reported that battery suppliers such as Honeycomb Energy, CATL, and BYD plan to supply lower-priced batteries to car companies, and there is more room for power battery price reductions in the future. The cost of batteries typically accounts for 40% or more of the cost of a pure electric vehicle.

"From the perspective of new energy vehicles, with the decline in lithium carbonate prices, the reduction of battery costs, the reduction of vehicle manufacturing costs, and the rapid development of the new energy market, the formation of scale effect, the product will have more profit margins. Cui Dongshu, secretary general of the passenger association, said in an analysis.

On the other hand, the market competition for new energy vehicles is becoming more and more fierce, and car companies are under great pressure to reduce prices and promote them. According to the data, the sales of new energy vehicles in 2023 The domestic sales of new energy vehicles will reach 8.292 million, a year-on-year increase of 33.5%, although the year-on-year growth has been maintained, the growth rate has slowed down significantly compared with a few years ago.

At the same time, new car manufacturers such as Xiaomi have joined and will launch new products, and Xpeng Motors, Tesla, and NIO also plan to launch lower-priced products or brands, and it is expected that the competition in the new energy vehicle market will further intensify. In this case, new energy vehicle companies have the urge to exchange prices for the market. In this round of new energy vehicle price reductions, except for BYD, which will maintain a high growth rate in 2023, several others will have a decline in sales in 2023, which is under great pressure.

However, the decline in the price of new energy vehicles means that the living environment of fuel vehicles will become more and more difficult. According to the data, there will be 13.95 million fuel vehicles in 2023, a year-on-year decrease of 920,000 units, a decrease of 6%. In the face of the attack of new energy vehicles, fuel vehicles have also launched a counterattack, and the "battle between oil and electricity" will become fierce in the future.

"The fundamental reason for the recent price war in the passenger car market is that new technologies replace old technologies, new energy vehicles replace fuel vehicles, in the process of establishing a new market order, the substitution of new and old manufacturers is fiercely competitive, and it is expected that this process will continue for several years until a new pattern is formed. Cui Dongshu pointed out.

In fact, not only in the market range of less than 100,000 yuan, but also in more market segments, the "price war" between new energy vehicles and fuel vehicles has begun to be staged. On February 20, BYD's mid-to-high-end brand DENZA Auto announced that it can enjoy a limited-time cash discount of 25,000 yuan for its DENZA D9 model (excluding the founding version). The curtain of the "all-out war" between new energy vehicles and fuel vehicles has opened.