The development of new energy vehicles is the general trend, but the competition is becoming increasingly fierce. On June 20, Shenhui, founder, chairman and CEO of Weima automobile, wrote on the social platform that "the price war between the mainstream and high-end pure electric market has opened."

Shenhui said that the demand for additional purchase and replacement of electric vehicles is mainly concentrated in the mainstream and high-end markets. In this market level, price competition is extremely fierce. The "disguised price reduction of subsidy policies and deposit deduction" is very serious, and the price war between brands has begun.

Industry price war coming?

Although subsidies have declined, insurance has risen and raw material costs have risen, it is only a matter of time for some car enterprise leaders to start a price war as the qualification and technical threshold for new vehicles have been lowered again and again.

At the beginning of this month, Ford CEO Jim Farley asserted that new energy vehicles were about to usher in a "huge price war". Farley believes that the cost of batteries will decrease significantly in the future, which will bring about a significant reduction in manufacturing costs. In order to meet the possible price war, Ford has started to reduce the company's manufacturing costs in many ways. For example, develop the next generation electric vehicle platform, and cut distribution costs and advertising.

On June 20, Shen Hui of Weima automobile stated on the social platform that the price war between the mainstream and high-end pure electric market has been opened. Compared with Ford's reason that "a significant decline in the manufacturing cost of electric vehicles will lead to a price war", Shen Hui's reason is that the domestic "price reduction in disguised form of subsidy policies and deposit deduction" is very serious, and the price war between brands has begun.

The reporter of Securities Daily noted that Shanghai had officially released the detailed rules for the implementation of Shanghai's subsidy for promoting automobile consumption, which will provide a one-time subsidy of 10000 yuan for all qualified pure electric vehicle buyers between June 1 and December 31 this year. In April this year, Weima automobile released the pure electric SUV Ex5, which received wide attention due to its ultra-high subsidy. Ex5 includes 3 models with 6 different configurations. The selling price ranges from 179800 yuan to 298800 yuan. After subsidies, the selling price ranges from 112300 yuan to 216300 yuan. The maximum subsidy range exceeds 80000 yuan.

In this regard, gaoyunpeng, director of China new energy automobile industry innovation alliance, believes that the views of the above-mentioned automobile enterprises are reasonable, but are unlikely to occur this year or next year.

"At this stage, the price war in the new energy vehicle industry will still be dominated by price increase. The price of raw materials for power battery production will rise, which will increase the price of battery products and finished vehicles. However, the cycle of power battery production expansion generally takes 6 to 8 months, and the expansion of raw materials will take another year or so. The lagging capacity construction determines that the current price increase in the new energy vehicle market is the main theme." Gaoyunpeng said.

It is true. Earlier, several automobile manufacturers announced price hikes for their electric vehicles. On June 17, Tesla announced on its official website in China that it would raise the price of the model y long-range version sold in the Chinese market again by 19000 yuan.

Abroad, the US automaker General Motors also announced a price increase of $6250 (about 41800 yuan) for its Hummer EV, a pure electric pickup truck.

The market has accelerated from blue ocean to red ocean

Talking about the price adjustment of new energy vehicles, I have to mention Tesla. In March this year, Tesla staged a drama of "three consecutive rises in seven days" in the tide of rising prices of new energy vehicles.

The reporter noted that in order to ensure the product profit margin, Tesla chose the simple and crude cost transfer price increase mode. According to Tesla's financial report, in the first quarter of 2022, the company's gross profit rate climbed to 32.9%. In the past three quarters, Tesla's single vehicle profit continued to rise, reaching $7000, $10000 and $12000 respectively.

As the leader of domestic new energy vehicles, BYD (002594) chose the route of self-development of core parts + cost control. With the advantages of self-development of chip technology and cell technology, BYD, which has strong cost control ability, directly reduced the price of song Pro DM-I to 130000 yuan, and the seal model benchmarked to Tesla Model 3 to 200000 yuan.

"At this stage, Tesla and BYD have a broad market share, good reputation accumulation and certain product pricing power. While the old foreign-funded automobile enterprises have their own upstream resources + R & D foundation, which start late but start high and develop fast. Snowballing can also bring good benefits to the later stage." Gaoyunpeng worried that when the price war really started, it would be even more difficult for the weak car companies and new power car companies that have no self-development of core parts, no large-scale production sharing of R & D costs, and no layout of battery upstream and downstream industries.

The reporter of securities daily observed that in 2022, traditional car companies have significantly increased the release and admission of pure electric vehicles, including Toyota's two BZ series electric vehicles, Mercedes Benz's GLB, gla and gle, and BMW ix3, 3 series pure electric vehicles and I4, which are planned to be listed intensively this year. The congestion of new energy vehicles will increase unprecedentedly, and the market will be more gunpowder.

Gaoyunpeng predicted that most mainstream brands will gradually complete the construction of battery factories. When the shipment volume is stable and only a small number of batteries are required to be supplied externally, the supply volume of leading companies in the battery industry will no longer be tight and suppliers will have more choices. At that time, the price war of new energy vehicles will not be far away until the price of power batteries declines.

"In the past year and a half, the three listed new power auto companies have received a total of 23billion US dollars of financing in the open market. Now each company has 40billion to 50billion yuan in its hands." Gong min, research director of UBS China automotive industry, believes that if they pursue market share and do not hesitate to sacrifice profit margin, it will inevitably lead to difficulties for some auto companies that do not want to fight a price war or have weak financial resources to maintain.

In this regard, Shenhui said that the key factor in the future sales competition is the competition for users. He believes that "the corresponding retail model and service model should focus on highlighting the business model and service advantages." Under this concept, it will inevitably reduce the intermediate communication and circulation links, and the car enterprises will occupy a dominant position in future sales, so as to maximize the proximity to users and achieve a balance between user experience and enterprise cost efficiency.