In the auto industry, the most cautious about price wars are Tesla and Ideal, which are often as stable as Mount Tai when other car companies are cutting prices and promotions. With the release of sales results and financial data in the first quarter, Tesla and Ideal have to change in the face of competitive pressure.
Tesla ushered in a decline in sales in both the domestic and global markets, with a total of 433,000 new vehicles produced and 387,000 delivered in the first quarter, with total deliveries down 8.53% year-on-year and 20.16% quarter-on-quarter, far less than market expectations. The company's market capitalization has also fallen by 50% from its peak.
Tesla has cut the prices of some models in Europe, the Middle East and Africa, following the weekend's announcement of price cuts in China and the United States, with a general discount of around $2,000. Tesla has reduced the price of the whole series by 14,000 yuan in China, and the price of the Model 3 is as low as 230,000 yuan.
Although Tesla's price in the United States is more than 50,000 yuan higher than that in China, due to the high electric vehicle tax credits and various subsidies in the United States, local consumers can buy a Model 3 for as little as more than 28,000 US dollars (about 200,000 yuan), and the terminal price is significantly lower than that in China.
The new energy vehicle market in China and the United States is completely different, we have more choices and more fierce competition here, not to mention that Tesla has been surpassed by domestic cars in terms of battery life and intelligence. In the face of relatively backward performance, the discount of 14,000 is really not interesting, and I feel that buying Tesla now is buying a logo, which is not cost-effective.
Clearly, Tesla's price cuts in China appear to be insincere. You must know that the production cost of the Shanghai factory is much lower than that of the American factory, and Tesla can make a profit of 70,000 yuan (gross profit) by selling a car in China, while the profit in the American market is far less high.
Of course, Xiaobian acknowledges Tesla's brand advantages, but also believes that consumers will make more rational choices after comprehensive comparison. Other countries do not say, if Tesla wants to boost sales in the domestic market, it can't hold such high profits and be reluctant to let go, and it must come out with more sincerity.
At the same time as Tesla, the price reduction of Ideal, its L7, L8, L9 and MEGA models has been reduced, of which the L series has been reduced by 1.8-20,000 yuan, and the MEGA has been reduced by 30,000 yuan. At present, the price of L7 is 300,000-360,000 yuan, L8 price is 320,000-380,000 yuan, L9 price is 410,440,000 yuan, and MEGA price is reduced to 529,800 yuan.
At the beginning of the year, Ideal set an annual target of 800,000 with the confidence of last year's success, but the actual sales data made it have to face the reality and lowered the target to 560,000-640,000, but only 14% of the annual target was completed in the first quarter. Therefore, the ideal, which has always been strong in terms of price, has also taken the first step towards price reduction.
Ideal is also one of the companies with higher profit margins among domestic car companies, achieving a net profit of 11.8 billion yuan in 2023 while selling 376,000 vehicles. You should note that this is net profit, not gross profit. SAIC sold more than 5 million new cars last year and only received a net profit of 14.1 billion yuan. This shows how high the ideal profit is.
We must admit the advantages of Li Auto, which is remarkable in terms of comfort and practicality, with rich configuration and complete functions, which has been recognized by the market and users. However, compared with the same level of Wenjie, it is all inferior in terms of overall performance and intelligence, and more importantly, the price of Wenjie M7 is lower, and the ideal has been squeezed out of a large number of markets.
The minimum starting price of the M7 is 249,800, and the minimum price of the ideal L7 is 300,000 after the price reduction. In addition, when a car reaches a certain sales volume, its manufacturing cost will be reduced, but the larger the sales volume, the lower the cost. In the same way, the cost of a car this year will only be lower than last year, and there is more room for price reduction.
If the ideal wants to maintain an advantage in the competition with the questioning world, the discount of about 20,000 yuan is not sincere enough, and it may not have much effect in the market.