On December 1st, several new energy vehicle companies released their sales figures for November. The latest report shows that for the first 11 months of this year, most new energy vehicle companies have struggled to meet their annual sales targets. Among the 11 new energy vehicle companies surveyed by Red Star Capital, only one, Ideal Auto, has achieved its sales target ahead of schedule. BYD is still 11% short and needs to achieve a sales volume of 328,000 units in December, an 8.6% increase from November. In order to boost KPI, several car companies have announced promotions, and the year-end price war has already begun.
BYD’s Qin DM-i starts at 89,800 yuan (12580$); Changan Automobile’s new energy brand, Deep Blue and Qiyuan, offers a maximum cash discount of 30,000 yuan (4200$); Zero Run offers a maximum cash discount of 17,000 yuan (2380$); Zhiji Auto offers a comprehensive discount of 37,600 yuan (5270$); FAW Volkswagen, FAW Toyota, and Dongfeng Motor have also launched year-end promotions. In addition, all models of the Ji Yue 01 are directly discounted by 30,000 yuan (4200$); Nezha S is reduced in price without reducing configuration, and the new Enjoy version is reduced by 30,000 yuan (4200$). From the actions of car companies, it is clear that trading price for volume is still a common practice. Industry insiders told Red Star Capital that the price war will continue to be the main theme of the 2024 car market.
11 new energy vehicle companies Only 1 achieved sales target ahead of schedule Red Star Capital’s survey of 11 new energy vehicle companies found that only Ideal Auto has achieved its annual sales target ahead of schedule. Ideal Auto delivered 41,000 new cars in November, with a total of 325,700 units delivered by November 30, surpassing the annual sales target of 300,000 units ahead of schedule.
According to public information from Red Star Capital Among the remaining 10 new energy vehicle companies, only BYD’s completion rate is close to 90%, with hopes of achieving the annual target BYD’s total car sales in November were 301,900 units, an increase of 70 units from October; the cumulative sales this year are about 2.672 million units, a year-on-year increase of 64.29%. To achieve the annual target of 3 million units, BYD needs to sell 328,000 units in December, an increase of 8.6% from November Lantu Automobile’s annual completion rate exceeds 80%, with 7,006 new cars delivered in November, a 15% increase from the previous month; a total of 40,500 units were delivered from January to November, still 9,500 units away from the annual target of 50,000 units.
This requires Lantu Automobile to achieve a month-on-month growth rate of 35.6% in December Jike Car and GAC Aian have a completion rate of over 70%, with Xiaopeng, Leap Motor, and Deep Blue’s completion rate exceeding 60%. NIO, NETA, and Silessi have a completion rate of less than 60% Several car companies announced promotions in December Year-end price war begins In the last month of the year, various car companies have also entered the critical moment of striving for KPIs. After starting the year-end price war in early November, BYD announced another limited-time promotion on December 1, with several other car companies following suit BYD Qin PLUS DM-i continues the discounts from November, starting at 89,800 yuan (12580$) after a 10,000 yuan (1400$) discount.
Several models under BYD also have cash discounts ranging from 5,000 yuan (700$) to 20,000 yuan (2800$) On the same day, Changan Automobile and its new energy brands Deep Blue and Qiyan launched year-end activities. The Oshan Z6, 2023 UNI-V, and third-generation CS75PLUS all have a direct cash discount of 15,000 yuan (2100$), while the Oshan X5 PLUS has a 20,000 yuan (2800$) discount. The Oshan Z6 Smart Electric iDD, limited to 10,000 units, has a discount of up to 30,000 yuan (4200$). The entire Deep Blue lineup has a 1999 yuan (280$) deposit that can be used as an 8,000 yuan (1120$) car purchase discount, and the Deep Blue S7 520Pro pure electric version has a 10,000 yuan (1400$) discount.
The cash discount for the Qiyan A07, A05, and Q05 models can go up to 20,000 yuan (2800$). Zero Run Automobiles offers a maximum cash discount of 17,000 yuan (2380$) for all models in December, and the first car owner enjoys a lifetime free three-electric quality assurance. Zhiji Automobile’s limited-time preferential rights are worth a total of 37,600 yuan (5270$), including a cash discount of 12,000 yuan (1680$) for placing an order, a configuration upgrade subsidy worth 25,600 yuan (3590$), and a lifetime free use of the IM AD intelligent driving full-function package.
FAW-Volkswagen’s December limited-time preferential activities include car purchase gifts, additional gifts, limited gifts, in-store gifts, SUV exclusive policies, and sedan exclusive policies, applicable to Bora, Sagitar, Golf series, Magotan, CC series, Tanyue, T-ROC, Tayue series, Lanxun, and Lanjing and other models.
FAW Toyota announced that from December 1st to December 18th, the new Corolla, new RAV4 Rongfang, new Asia Dragon, Geelyweia, and Crown Lu Fang and other models will enjoy a 5,000 yuan (700$) vehicle purchase tax subsidy. From December 9th to September 10th next year, a maximum of 6,000 yuan (840$) replacement subsidy can also be enjoyed. Dongfeng Citroen from December 1st to 25th, the new 408 enjoys a package of brand, tax, and insurance; the 408X and Versailles C5 X 2023 models enjoy a 5,000 yuan (700$) replacement subsidy, a 3,000 yuan (420$) additional purchase subsidy, and a 2-year interest-free policy, and the first car owner enjoys free basic maintenance for life; the new 508L, new 4008, and 2023 Tianyi enjoy a 10,000 yuan (1400$) replacement subsidy, a 5,000 yuan (700$) additional purchase subsidy, 2-year interest-free, and a 5,000 yuan (700$) insurance subsidy.
On December 2nd, Nezha Automobile launched the Nezha S New Enjoy Edition, with the same vehicle configuration but a price reduction of 30,000 yuan (4200$). In addition, Jiyue began offering a direct reduction of 30,000 yuan (4200$) for all models of the Jiyue 01 from the evening of November 30th, and the optional long-life three-element lithium battery pack was reduced by 10,000 yuan (1400$). A cash compensation of 30,000 yuan (4200$) will be given to old users who have already picked up their cars. In 2024, price wars are still the main theme of the auto market. It can be seen that the phenomenon of trading price for quantity is still common in the auto market.
At the previous Guangzhou Auto Show, many car company executives told Red Star Capital that price wars will still be the main theme of the auto market in 2024. 1. Xiaopeng Motors’ Vice President of Marketing, Yi Han, believes that “the price war is more like an irreversible trend.” Jike Intelligent Technology’s Vice President, Lin Jinwen, said, “The price war is not only this year, but it is particularly intense this year. As long as there are enough players, this industry will be competitive enough. If the players gradually decrease in the next 2-3 years, competition will be the norm. All products and brands involved in the competition will quickly be eliminated if they cannot compete and have the ability to compete.”
He also pointed out, “The beneficiaries of the price war are undoubtedly the users. At the same time, the price war has driven progress in technology, cost control, user service, and product quality for all players in the industry.” Liu Jie, Vice President of Commercial Business at Ideal Motors, judged that from 2023 to 2025, it will be the “elimination” stage for new energy. In 2024, the penetration rate of the new energy market above 200,000 will reach 55%, with a scale of nearly 4 million vehicles. This means that new energy vehicles will enter the late mass stage in the innovation curve. “This is a very important turning point, because after the penetration rate exceeds 50%, there will be a concentration effect of leading brands in the overall automotive market.”
“By the end of next year, the top winners in the various submarkets of new energy should have already stabilized. The new energy companies at the table will further expand their market share in the later stage.” Car companies are confident in waging a price war, but they also clearly recognize that for the industry to develop healthily, it cannot rely solely on price wars. Zhu Ling, Vice President of Jike Intelligent Technology, said, “Jike does not want to wage a price war, but we are never afraid of it. When the price war starts, we can only endure it. While others are bleeding, we will fight to the death.” Cao Li, Senior Vice President of Leapmotor Technology, believes that a healthy brand should not just wage a price war, but should provide more competitive products while meeting user price expectations. “Waging a price war blindly will ultimately result in everyone not being able to survive, no profit, and the products will get worse and worse.”