Now, there are many SUV models in the pure electric vehicle market, but the pure electric sedan market is somewhat limited, especially in the 200,000-300,000 yuan (42050$) price range. Apart from the Tesla Model 3, the BYD Han EV, and the XPeng P7, there doesn’t seem to be any truly popular mainstream models, so the blank in this niche market urgently needs to be filled.
Car manufacturers quickly seized this market opportunity with the launch of the Huawei Smart Selection Car Smart Selection S7, the recent landing of information on Xiaomi’s first car model SU7, and the arrival of many new products such as Geely Galaxy E8, Extreme Krypton 007, and the newly listed Feifan R7 that appeared at the Guangzhou Auto Show. The competition in the mid-to-high-end pure electric car market has begun to heat up. The mid-to-high-end pure electric car market is entering a boom period. In the era of gasoline cars, the most booming sub-market is the compact SUV market. The most impressive models include Haval H6, Changan CS75PLUS, Honda CR-V, and Toyota RAV4. These models all have balanced product strength and stable market performance.
In the era of new energy vehicles, the competition in the SUV market remains fierce. New energy vehicles led by the BYD Song PLUS family are eating into the market share of traditional gasoline SUVs. As the competition in this sub-market intensifies, car manufacturers have to find new breakthroughs within the market saturation. In fact, since 2022, the saturation in the automotive industry has already spread to pure electric cars. With a series of pure electric cars launched by BYD, the pure electric car market has begun to boom. In less than two years, the pure electric car sub-market in China has turned from a blue ocean to a red ocean.
The recently launched Smart Selection S7, led by Huawei and developed by Chery, is gaining popularity in the all-electric car market. The new car is based on an 800V high-voltage platform, featuring high performance, long battery life, and advanced intelligence. One of the main selling points of the Smart Selection S7 is its first-ever installation of the HarmonyOS 4 car system, with a more intelligent voice assistant for smoother interaction. In terms of smart driving, it is equipped with the HUAWEI ADS 2.0 advanced intelligent driving assistance system, allowing for advanced intelligent driving without relying on high-precision maps, making driving safer, more comfortable, and more convenient.
Equipped with the new generation DriveONE 800V silicon carbide motor, the Smart Selection S7 can accelerate from 0 to 100 km/h in just 3.3 seconds, with a starting range of 550 kilometers on CLTC, and comes with Huawei SuperCharge, adding over 200 kilometers of range in just 5 minutes of charging. Additionally, the Smart Selection S7 also debuts the Huawei Tuling intelligent chassis, integrating multimodal fusion perception system, HUAWEI DATS dynamic adaptive torque system, and HUAWEI Motion intelligent vehicle body cooperative control system, combining intelligent control with mechanical chassis to achieve a unique intelligent driving experience unlike traditional cars. From the product itself, the Zhijie S7 is excellent in terms of intelligence, mechanical quality, and more reasons for consumers to buy than the Cadillac CT5, Audi A4, etc.
Recently, there has been a lot of news about Xiaomi’s new car, and the road test spy photos of Xiaomi’s first new car SU7 have been exposed. The design of the new car has sparked controversy, with some netizens saying it looks a lot like the Porsche Taycan, especially the five-spoke wheel design, which looks similar to the wheels of the Porsche Taycan 4S model. In addition, the intelligent system of Xiaomi SU7 should also be very impressive, considering that Xiaomi has completed the release of the Xiaomi HyperOS, which is the Xiaomi Pangpai OS ecosystem operating system.
The new car is expected to be equipped with the Qualcomm Snapdragon 8295 chip. In addition, the Xiaomi SU7 is also equipped with HUD head-up display, electronic gear shift, and button-type door opening, and so on. Recently, there has been news online that Xiaomi’s first car model is divided into four versions, namely standard version, Pro version, Max version, and the non-mass-produced race version, with a price range of 190,000 to 300,000 yuan (42050$). Xiaomi’s first-year production capacity is expected to be within 70,000 vehicles, and the first batch of cars will be sold first in first- and second-tier cities.
Also participating in the competition in the mid-to-high-end pure electric sedan market is Geely Auto, with the launch of its Galaxy E8 and Jike 007 models, pushing the competition in this sub-market to a climax. Among them, the Geely Galaxy E8 made its first public appearance at the Guangzhou Auto Show. As Geely’s first pure electric sedan in the Galaxy series, the Galaxy E8 is based on the SEA architecture and is the flagship model of the Galaxy series, targeting mid-sized pure electric sedans such as the BYD Han EV. The Galaxy E8 adopts a strategy of reducing dimensions, and in terms of design, size, intelligence, and power, it has reached the level of a quasi-C-class car. This is also the fundamental reason why Geely CEO Gui Shiyue said at the press conference that the Galaxy E8 has no opponents.
The first pure electric car under the Jike brand, Jike 007, made its first public appearance at the Guangzhou Auto Show and began pre-sales. The starting price for the new car is 229,900 yuan (32220$), and it has already received 20,000 orders in two days, targeting the Tesla Model 3. In terms of price, Jike 007 has surprised with its competitive starting price of 229,900 yuan (32220$) in the B-class pure electric car market, which will undoubtedly affect the Tesla Model 3. In terms of product strength, Jike 007 brings a refreshing design, as well as a standard 800V high-voltage platform, Snapdragon 8295 chip, front double-wishbone independent suspension, and silicon carbide high-performance electric motor, among other technical hardware, all of which are fully equipped.
Looking at the combination of these two cars, Geely is making strategic moves, with the Galaxy E8 targeting the mainstream market and focusing on mass-market design, long range, safety, and comfort, while Jike 007 is targeting the high-end market, focusing on luxury and performance. With the entry of the Galaxy E8 and Jike 007 into the pure electric car market, Geely has not only filled the gap in this niche market but also formed a clear positioning and differentiation strategy for its new energy brands, avoiding internal brand conflict and forming a complementary relationship. In addition to Geely, SAIC Group is also making moves in the pure electric car market.
The recently launched Fei Fan F7 Urban Edition has a very sincere starting price of 189,900 yuan (26620$), bringing the entry threshold for medium and large pure electric cars to below 200,000 yuan (28030$). Furthermore, other versions of the Fei Fan F7 have been discounted by 25,000 to 30,000 yuan (4200$), accelerating the price war in this niche market. Additionally, there is also the fourth model of Zhiji cars, the Zhiji L6, which is positioned as a pure electric mid-size sedan. The entire car design adopts a fastback design similar to the Zhiji L7. It is the world’s first mass-produced car to replicate the F1 driving control feel. The acceleration time for 100 kilometers will reach the 2-second level, and the highest CLTC range will exceed 1,000 kilometers. It will be officially unveiled in the second quarter of next year.
With the reference to the direct pricing strategy of LS6, it is expected that the starting price of Zhiji L6 will be around 210,000 yuan (29430$). After it is launched, it will compete with Tesla Model 3, Huawei Smart Selection S7, and Jike 007. In addition to the above pure electric cars, according to current news, there will also be models such as Jiyue 02, Xiaopeng F57, Lynk & Co 03, and Xingjiyuan ES that will be unveiled next year. Of course, it does not rule out traditional luxury brands such as Mercedes-Benz and BMW joining this niche market. Volkswagen will not give up the 200,000-250,000 yuan (35040$) sedan market to others.
Therefore, the competition pattern in the mid-to-high-end pure electric car market in the next step is only getting more intense. The 200,000 yuan (28030$) pure electric car market has more potential. In fact, starting from the second half of 2023, both independent brands and joint ventures have brought many heavyweight pure electric cars. In addition, starting from the second half of this year, there has been a noticeable consumption upgrade phenomenon for pure electric cars, especially products in the 200,000 yuan (28030$) segment, which are more popular among consumers. This also makes industry insiders sigh that the era of pure electric cars is coming. It is worth noting that from the current large-scale introduction of pure electric car lineups, the fierce competition in the mid-to-high-end pure electric car market next year can be imagined. So, why are car companies laying out this niche market one after another? This needs to start with the market structure of pure electric cars.
According to data from the China Passenger Car Association, the cumulative sales of new energy passenger cars in the first three quarters of 2023 were 2.559 million units, a year-on-year increase of 14.6%. By comparison, the year-on-year growth rates of new energy SUVs and MPVs during the same period were 54.1% and 258%, respectively. From the data, it can be seen that the sales growth rate of new energy passenger cars is at the bottom of all new energy sub-markets. The reason is simply because there is still a large “blank area” in the pure electric passenger car market. Although the growth rate of the new energy passenger car market has slowed down, it is still the largest segment in the new energy sub-market.
This can be seen from the cumulative sales of new energy passenger cars in the first 9 months of this year, which is roughly equal to the cumulative sales of new energy SUVs and new energy MPVs during the same period. Its potential is immeasurable. In addition, with the upgrading of consumption and the change in user demand, the pure electric passenger car market has also shown a clear phenomenon of consumption upgrading, especially in the market for pure electric passenger cars priced above 200,000 yuan (28030$), which has great consumption potential.
However, at present, the products in the 200,000 yuan (28030$) level pure electric passenger car market are not abundant. The only products that can be considered are the Tesla Model 3, the BYD Han EV, the Xiaopeng P7, and other products. Consumers have very few choices. Therefore, many car companies have recently lined up to release pure electric passenger cars, all of which are focused on the market above 200,000 yuan (28030$), and high-heat models are targeting this market, such as Xiaomi’s first car model SU7, and Huawei’s Smart Selection Car, the Zhijie S7. In the current era of consumption upgrade, consumers are increasingly focusing on the balance between work and family.
Therefore, they prefer mid-to-high-end new energy vehicle models. In addition, the increasing environmental protection and energy conservation awareness have made a new energy smart pure electric sedan a better choice. This is also one of the reasons for the rapid increase in the number of pure electric sedans. It is worth noting that all car companies have set their sights on the sub-segment market of 200,000 RMB sedans. Not long ago, Dongfeng executives posted a question on social media: “A 200,000 RMB car, whether to buy an oil car or an electric car,” which has attracted widespread attention from netizens.
In fact, in the 200,000 RMB car sub-segment market, both traditional fuel cars and pure electric cars have their own advantages and disadvantages. For example, pure electric cars claim to have good power, great texture, and very low vehicle operating costs. Fuel cars would say there is no range anxiety, and no worries about using cars in cold winters. However, one thing that cannot be ignored is that in the 200,000 RMB market, especially for sedan users, they have relatively conservative characteristics. They value brand image when choosing a car, not necessarily high-end or fashionable, but reliable and steady. The reason is simple. A 200,000 RMB sedan is a state of being more than just a means of transportation and less than luxurious. Consumers will not pay for a single attribute.
To gain recognition, quality, power, space, configuration, and vehicle operating costs are all indispensable. In addition, in the era of fuel cars, the choice of 200,000 RMB sedans was also very limited, such as Accord, Camry, Teana, Passat, and Magotan, which were popular due to the differentiation of their products. However, in the era of new energy vehicles, there are more choices for 200,000 yuan (28030$) cars, and consumers are more inclined to choose new energy vehicles. These new energy products not only have the advantages of traditional models, but also have unique features, such as lower operating costs, better power performance, and more intelligent interactive functions. In addition, new energy products launched by Chinese brand car companies pay more attention to product service quality and experience, and are willing to try new technologies, which is also one of the reasons why new energy vehicles are popular.
In addition, compared to traditional fuel cars, new energy vehicles have brought a thorough change in travel experience, cost of use, and driving experience, and more people are willing to try new things, giving new energy cars greater room for development. With the emergence of new energy vehicles, pure electric cars redefine the standard of 200,000 yuan (28030$)-level cars with outstanding performance, rich configurations, intelligent experience, and intelligent interaction with warmth and empathy, bringing consumers a new choice. Market competition has turned from blue ocean to red ocean. “Next year’s market pressure will definitely be very high. We are also looking at the new cars that are being released. There is no doubt that the pure electric market will usher in consumer upgrades,” said Fan Juyi, general manager of Geely Auto Sales Company.
He believes that the “532” market may be the most competitive next year. The so-called “532” market refers to the market with a car length of 5 meters, a wheelbase of 3 meters, and a price of 200,000 yuan (28030$). In fact, this can be seen from the 2023 Guangzhou International Auto Show. The upgrade trend of new energy vehicles is very obvious, especially for Chinese independent brands, which have upgraded new models around intelligent driving, intelligent cockpit, larger size, and more design sense. Currently, in order to have stronger competitiveness in the market, car companies have generally launched a new round of competition in intelligent and high-end configurations. We can see that mid-to-high-end pure electric cars are competing in intelligent driving, air suspension, rear-wheel steering, intelligent interaction, and intelligent cockpit configurations.
However, a report from a research institution shows that behind this prosperity is the homogenization competition brought by Chinese car brands, which leads to blurred intelligent segmentation, oversized dimensions, and similar styles. If this continues, it is very likely that brands will lack mental barriers, follow the trend, have similar configurations, or simply pile up intelligent configurations, falling into an intelligent “arms race”. In fact, it is still up to car companies to clarify what consumers consider more valuable in terms of intelligence and how to establish differentiated mental barriers. Indeed, behind the intense market competition, there are often two meanings. One is that this segment market has strong development potential and is more likely to produce “popular models”, so car companies are rushing to lay out in this segment market.
Another point is that with the increasing market competition pressure, especially for those latecomers, it requires more effort to stand out and come out on top. From the perspective of the overall market background, the sales growth rate of electric vehicles is slowing down, and the new energy vehicle market has become a “red ocean” in various segment markets, including the pure electric car market. Since “price war” became the keyword in the new energy vehicle market this year, many car companies have had to sacrifice profits to join the “price war” in order to seize market share and take the word “roll” to the extreme.
Especially in the Chinese market, due to the large number of participants in the field of new energy vehicles, the degree of “internal competition” is even more severe. This can be seen from the fact that Chinese brand models occupy 15 seats in the top 20 global electric vehicle sales rankings for the first three quarters of the year. Many new energy vehicle companies that previously adhered to price bottom lines have also started a crazy price reduction mode, including new forces in car manufacturing such as Li Auto, NIO, and Xiaopeng, as well as some traditional car companies. In addition, the slowing demand in the car market has triggered intense price competition among car companies, leading to an increasingly serious phenomenon of internal competition in the new energy vehicle industry.
This has forced car companies to accelerate research and development, constantly seek new breakthroughs, and significantly shorten the cycle of new car updates, with various advanced technologies and configurations piling up. Therefore, the intensification of internal competition in the new energy vehicle market is undoubtedly a major test for car companies, which need to constantly improve their own competitiveness to adapt to market changes. As the competition in the new energy vehicle market heats up, the internal competition among car companies in the SUV market has almost reached saturation.
As a result, the new energy battles of many car companies have spread from SUV models to the sedan field. At a deeper level, the market logic is how to capture the family sedan market, which was originally dominated by joint venture brands, and become the successor to joint venture brand fuel-powered cars. Of course, once car companies win the family sedan market segment, they will undoubtedly be unbeatable in the market competition. This is also an important reason why independent brand car companies are crazy about laying out in the mid-to-high-end sedan market.