Text/Cao Shuangtao
Editor/Yang Bocheng
题图 | IC Photo
In the past April, the new energy vehicle market recovered slowly.
The price war has led to the continuation of consumers' wait-and-see sentiment, and the Qingming holiday is not as hot as the regular weekend. Although the price and preferential policies of car companies have been adjusted frequently, they have had little effect, and the release of terminal demand has been significantly hindered.
According to the data of the Passenger Car Association, the sales volume of the narrow passenger car retail market in April was about 1.60 million units, down 1.5% year-on-year and 5.3% month-on-month. The retail sales of new energy vehicles are expected to reach 720,000 units, a year-on-year increase of 37.1%, but basically the same as in March.
Judging from the delivery volume of new forces in April, only NIO outperformed the industry market and showed reverse growth. Although other new forces are higher than the same period last year, the month-on-month growth rate has slowed down significantly, and some brands have even entered negative growth.
Although the year-on-year growth rate of Wenjie was as high as 929.4%, the delivery volume of Xinwenjie M7 in April was only 11,000 units, compared with the highest monthly sales level of 30,000 units at the beginning of the year, it has dropped significantly, and the month-on-month growth rate of Wenjie was -20.9%.
Source: Based on public information collation of DoNews
Xiaomi is the most worry-free manufacturer in the whole new force, relying on the Xiaomi SU7 single model monthly delivery of 7058 units, the performance is quite strong, which makes the car circle bosses once again see Lei Jun's marketing ability.
Xpeng is most anxious about sales, and the delivery level in April has not exceeded 10,000 units, less than half of last year's peak. Whether it is last year's G6 or this year's X9, the hot shelf life of new models is too short, which has always been a problem for Xpeng models.
Another thing that needs to be anxious about sales is ideal, although it regained the sales crown of the new forces in April, but the gap with the question is only a few hundred units. In addition, according to the official WeChat of Li Auto, the ideal L6 has been on the market for 16 days, and the cumulative orders have exceeded 30,000 units. Ensuring the normal delivery of vehicles and increasing production capacity will be the key to ideally breaking the existing shackles and maintaining high growth.
It is worth noting that the new forces are being surrounded and suppressed by traditional car companies and new brands. In April, there were 4 car companies with more than 10,000 deliveries from new forces, but there were 6 new brands of traditional car companies. And even if GAC Aion's sales fell in April, the delivery volume of 28,113 vehicles in a single month was higher than ideal.
Geely's Zeekrypton delivered 16,089 vehicles with a year-on-year growth rate of 99% and a month-on-month growth rate of 23.65% in April, not only refreshing a record high, but also outperforming the industry market like NIO. In the first four months of this year, the sales of Changan's Deep Blue and AVATR continued to grow. For AVATAR, which focuses on high-end brands, it has delivered more than 5,000 vehicles for two consecutive months, reaching the compliance line.
Source: Based on public information collation of DoNews
However, on the whole, the delivery volume of many new forces and new brands of traditional car companies in the first four months of this year is less than 20% of the annual sales task, which means that the new forces and new brands of traditional car companies need to complete 10% or more of the annual sales task every month in the next eight months.
Source: Based on public information collation of DoNews
Before the major sales pressure, how to obtain new growth through multi-brand strategy, overseas strategy, price and marketing strategy has become a problem that new energy manufacturers need to think about, and the new energy vehicle market may be involved in a new height in the second half of this year.
01. New forces are rising rapidly, but going overseas is still facing uncertainties
Behind the high year-on-year growth rate of new forces and new brands of traditional car companies in April, it is the improvement of the comprehensive competitiveness of domestic new energy vehicles in the past year. As domestic consumers increasingly favor domestic new energy models, Tesla's sales and exports in the Chinese market stagnated in the first quarter.
Source: Financial Times
According to data from the China Passenger Car Association, Tesla's domestic sales of new energy vehicles fell to 7.7% in March this year, down 4.7% from the same period last year. As Tesla's second largest market in the world, China has a direct impact on Tesla's global deliveries.
Source: Tesla's official website
The rise of China's new energy vehicles has led multinational manufacturers to seek cooperation with local Chinese manufacturers. For example, Toyota of Japan announced that it has reached a strategic cooperation with Tencent, and the two sides will cooperate in three major areas: AI model, cloud, and ecology. At the same time, a joint venture between Toyota and Pony.ai will be established in the near future.
Nissan and Baidu signed a strategic cooperation agreement to introduce Baidu's AI solution to Nissan's vehicles sold in China. Honda's GT concept car for its new electric brand Ye was designed by a Chinese R&D team and uses technologies from domestic companies such as CATL, Huawei, Hangsheng, and iFLYTEK.
Germany, which has the oldest automotive industry, has also had to bow to reality. Erbert Diess, former CEO of Volkswagen in Germany, once admitted that the company's electrification transformation pace is too slow. Ralf Brandstaetter, who also serves as a former CEO, said that China can develop new cars in two and a half years, while Volkswagen needs four years, and called for learning from China Speed.
Based on this, Volkswagen's investment in the domestic market has also accelerated in the past year. Established a joint venture with Horizon Robotics to strengthen the research and development of autonomous driving; announced an investment of US$700 million in Xpeng Motors, acquiring nearly 5% of the latter's equity; Cariad, a software company, has partnered with Thundersoft to create a smart and infotainment system with domestic characteristics for local consumers.
Juergen Reers, head of automotive industry at Accenture, predicts that multinational automakers are trying to reshape their business models to catch up with the pace of China's smart electric vehicles, and the ecosystem of China's auto industry will be more closely coordinated.
Overseas consumers' impression of China's new energy vehicles is also improving, with data from the European automotive website Carwow showing that the proportion of German consumers who do not consider accepting Chinese new energy vehicles has dropped from 70% in July 2022 to 50% in February 2024, and local consumers' awareness and acceptance of domestic BYD, NIO, and ZEEKR have improved.
It's just that new domestic forces and new brands of traditional car companies want to achieve their sales targets in 2024 by going overseas, and they need to deal with the escalating trade war in the short term. In addition to the EU launching a subsidy investigation into China's electric vehicles in October 2023 and the US launching a cyber security risk investigation on China's electric vehicles and connected vehicles in February 2024.
The Financial Times recently reported that the European Union is planning to impose a massive 50% tariff on Chinese electric vehicles. Initial tariffs could be introduced as early as May and have a deadline of July, and will be imposed in November as permanent tariffs need to win the support of most EU member states.
Source: Financial Times
Rhodium expects the EU to impose tariffs of 15 to 30 percent, which may have a limited impact on manufacturers like BYD, which have already formed economies of scale.
For example, the BYD Seal U is priced at 20,500 euros in the Chinese market and 42,000 euros in the European and American markets, respectively. Under the 30% tariff, BYD's profit in the EU market is still higher than 15% of the profit in the Chinese market, and it is even possible that BYD will reduce prices to achieve its goal of occupying 5% and 10% of the EU by 2025 and 2030, respectively.
Source: Financial Times
The new brands of traditional car companies may be able to rely on the group's years of overseas experience to deal with the trade war, but the new forces are relatively young when they go overseas, and how to deal with changes in overseas policies and how to achieve a balance between costs and profits brought by high tariffs are extremely testing the comprehensive ability of the new forces.
In the long run. When new forces and new brands of traditional car companies go overseas, they also need to continue to solve problems such as low added value caused by weak brand effect, lack of channels, insufficient local adaptability, and inapplicability of domestic operation system. Domestic new energy vehicles go to sea, there is still a long way to go.
02. Smart driving drives sales, can Tesla continue to play the "catfish effect"?
The "Intelligent Connected Vehicle Technology Roadmap 2.0" released by China's National Intelligent Connected Vehicle Innovation Center predicts that by 2025, L2-L3 intelligent networked vehicle sales will account for more than 50% of total sales, and L4 vehicles will be commercially applied in specific scenarios. By 2030, L2-L3 vehicles are expected to account for more than 70% of sales, and L4 vehicles will be widely used on highways and some urban roads.
Counterpoint, an international research organization, predicts that there will be 1 million cars equipped with Level 3 self-driving technology in China in 2026, and these vehicles will account for about 10% of overall new car sales in 2028.
Now it seems that intelligent driving is becoming the key to driving the sales growth of new forces and traditional new brands. For example, in April, AVATAR's sales increased by 226% year-on-year to 5,247 vehicles, and the sales volume from January to April increased by 689.4% year-on-year to 110928 vehicles, and the number of all models of Hongmeng Zhixing exceeded 11,000 units during the May Day holiday. In March this year, Xpeng Motors also plans to launch the first AI intelligent car for young people with a price of 100,000-150,000 yuan.
In April, Tesla CEO Elon Musk suddenly visited China without warning, firstly, because Tesla's FSD was launched for four years, and there is only an automatic lane change function in the Chinese market, which makes Tesla's Model series obviously less competitive than the new forces and new brand models of traditional car companies, which is another reason why Tesla's price reduction is difficult to work. The second is to seek approval to transfer the data collected domestically to foreign countries to train its autonomous driving technology algorithms.
The former has seen the light of day, after Musk's visit to China, Tesla's official website in China changed the FSD technology from a later launch to an upcoming launch, and reached a more in-depth cooperation agreement with Baidu on map and navigation functions.
After returning to the United States in a whirlwind, Musk made major adjustments to Tesla. Bloomberg reported that the dense charging network is the key to driving Tesla's sales growth. Tesla delivered 8% of the world's public charging electricity needs in 2023, and the overcharging business is expected to generate $740 million in profits for Tesla in 2030. However, Musk directly laid off the entire supercharging team and new product team, and temporarily slowed down the layout of the charging network.
Tesla's Model Y and Cybertruck use integrated die-casting technology, which reduces production costs by 40% by reducing the number of parts and simplifying manufacturing, which is considered a revolution in car manufacturing. Toyota, Volvo, General Motors, Hyundai and other mainstream car manufacturers followed up, but due to the extremely high initial investment in this technology, Musk also announced that he would suspend the layout of this technology.
According to foreign media reports, the cathode material manufacturing team in Texas, USA, is being laid off by Musk, and Anthony Thurston, the senior manager of the team, has been fired. The vehicle engineering and design department will be the next target of Musk's layoffs.
Many departments have been eliminated, and Musk announced that he will invest 10 billion dollars this year to develop self-driving AI training and inference. He also pointed out that if peers do not have the same scale of investment, it may be difficult to compete with Tesla. Whether the other purpose of Musk's visit to China will be achieved by investing heavily in autonomous driving is left to the market.
With Musk completely clearing the obstacles for FSD to enter China and investing tens of billions of dollars in smart driving, although it is debatable whether Tesla can continue to play the "catfish effect" in the Chinese market, under the premise of ensuring absolute safety, how to continue to create competitive and differentiated intelligent driving technology and respond to the impact of Tesla's FSD in advance will become one of the keys for new energy manufacturers to complete their sales tasks in 2024.
03. Although cost performance can drive sales, car companies are competing for comprehensive strength
"Price reduction and additional configuration" makes the model more cost-effective among similar models at the same price, and then stimulates consumers' desire to buy, which is the key to driving sales growth at this stage by new forces and new brands of traditional car companies.
For example, compared with the old ZEEKR 001, the new ZEEKR 001 not only reduces the price to 269,000 yuan, but also adds 800V fast charging and lidar. According to Lin Jinwen, vice president of ZEEKR Intelligent Technology, during the May Day holiday, the single-day passenger flow of ZEEKR exhibition hall was the second highest in history (only 4% lower than the record of ZEEKR in three years), achieving 3.1 times the monthly month-on-month large quantity, and 001 single-day Dading was close to 1,500 units.
The newly released Nezha L will bring the price to less than 100,000-150,000 yuan, and it is also equipped with active DMS fatigue detection, refrigerator, automatic parking, tracking and reversing and other functions that are not available in the same industry. With the high cost performance, the order volume of Nezha L exceeded 10,000 within 72 hours of its listing.
The newly released Wenjie M5 The new M5 adds dual 50 watt wireless charging compared with the old M5, the front four ball head double wishbone suspension, star ring scatterer and other configurations, and the Huawei ADS2.0 high-end intelligent driving is made as standard, and the price starts at 249,800 yuan. Within 12 hours of its launch, the number of orders for the new M5 exceeded 10,000.
However, under the slowdown in the growth rate of the new energy vehicle industry brought about by the continuous wait-and-see of consumers, the strategy of price reduction and allocation is extremely testing the comprehensive capabilities of new energy manufacturers in terms of production capacity, capital, marketing, service, and after-sales.
First, when friends have increased the configuration, how to keep their own models alive is not only a problem that Xiaopeng urgently needs to solve, but also a problem that many domestic new energy vehicle manufacturers need to think about.
For example, Xiaomi SU7 reached a peak in the WeChat index in early April, and since then, attention has been declining, and in May, the question world showed a cliff-like lead over Xiaomi SU7.
Source: WeChat Index
For Nezha Automobile, marketing has always been Nezha's shortcoming, although Nezha CEO Daniel Zhang relied on "black and red" to add a lot of heat to Nezha L in April. However, Nezha Automobile must also find a new way to break the marketing situation, relying on "black and red" is easy to have an impact on Nezha car owners and Nezha's brand image.
Second, the production capacity of new energy vehicles has fallen into polarization, on the one hand, manufacturers represented by Tesla, with high inventories, urgently need to digest production capacity and stabilize cash flow. On the one hand, the production capacity of Xiaomi and Wenjie still needs to be continuously improved. As shown in the March production and sales express announcement of Thalys, the monthly production capacity was 24,358 vehicles, with an average daily production capacity of less than 800 vehicles.
Source: Cialis announcement
According to the Xiaomi Auto app, the current delivery time for the standard version is 28-31 weeks, the delivery time for the Pro version is 30-33 weeks, and the delivery time for the Max version is 33-36 weeks. In other words, it will take 7-9 months for Xiaomi cars to pick up the car.
However, with the dissipation of the popularity of Xiaomi SU7, under such a long delivery cycle, how can Xiaomi SU7 continue to ensure the high cost performance of products, and deal with other manufacturers to snatch existing orders by placing orders and deliveries? In other words, how to reasonably plan production capacity is a problem that new energy manufacturers need to continue to solve.
Third, under the intensification of the involution of new energy vehicles, how can new forces and new brands of traditional automobiles ensure the stability of corporate cash flow.
For example, although the sales volume of ZEEKR has been rising, the ZEEKR prospectus shows that the company's net cash flow from operating activities in 2023 will be 2.2753 billion yuan, and more than 2 billion cash is not very superior strength in the money-burning car industry, after all, Xiaopeng's free cash flow in 2023 will exceed 6 billion yuan.
More importantly, new forces and traditional new automobile brands also need to find differentiated ways to play in the market where involution is intensifying. For example, NIO has continued to expand the battery swap alliance, adjusted the BASS program, and launched a variety of innovative services, which has allowed NIO's high-end brand image to penetrate, and it is also the reason why NIO outperformed the industry market in April.
Leap has always maintained an efficient and effective response to market trends in terms of product definition, as well as to ensure that its sales will never be left behind in the new forces.
Epilogue:
In the long-term tug-of-war of new energy vehicles, regardless of whether the current sales volume is up or down, the senior management of new energy manufacturers must keep an extremely clear mind, otherwise it is easy to lose themselves. For example, the dismal sales of the ideal MEGA series, Zhang Xinghai, the helmsman of Cialis Group, once shouted that Cialis Automobile will become the leader of the global luxury car brand in the future, causing market controversy.
With the complete start of the new energy vehicle knockout competition, which brands will leave the market with chicken feathers in the future? Perhaps only time will tell.