Near the end of the year, the new energy vehicle market has blown a wind of price reduction.
(The following is for the reference of children who need to pull the wool over their eyes)
Tesla announced that the starting prices of five versions of the Tesla Model 3 and Model Y models in mainland China have been reduced, with the starting prices of the two models reaching 265,900 RMB and 288,900 RMB respectively, a maximum reduction of 37,000 RMB for the five versions.
Immediately after, the network spread the news that AITO ask the world brand’s M5 and M7 models can directly reduce the final payment of 8,000 RMB. Since then, Huawei responded to this false rumor: “Since the early hours of October 24, the original financial discount, the sales stores differential gifts and other services, the purchase of some existing car models users a unified gift of insurance worth eight thousand dollars.”
On October 31, Ford China’s Electric Vehicle Division officially announced that from that day, the price of the domestic Ford Mustang Mach-E was adjusted by 20,000 to 28,000 RMB, and the price range after the price reduction was 249,900 to 369,900 RMB.
On November 15, Mercedes-Benz announced that some of its EQ pure electric models have reduced their suggested retail prices, including three models of Mercedes-Benz EQE, which have been reduced by RMB 50,000 to RMB 50,700, with the adjusted price ranging from RMB 478,000 to 534,300; four models of EQS, which have been reduced by RMB 204,600 to 237,600, with the adjusted price ranging from RMB 845,000 to 1,134,000; and two models of AMG EQS 53, all of which have direct discounts. EQS 53 two models all directly discounted 198,600 RMB, the current price of 1,486,000 to 1,547,000 RMB. At the same time, Mercedes-Benz said it would provide an exclusive subsidy program for old owners who bought the above-mentioned reduced models before November 16, 2022, based on the difference between the purchase invoice amount and the manufacturer’s suggested retail price after this adjustment.
On the same day, it was reported that Xiaopeng Auto had reduced the price of several models, except for the latest G9, G3i, P5 and P7, which were reduced by RMB 14,000 to RMB 20,000 on the final payment. Although Xiaopeng Auto then responded that it was only adjusting the equity structure, the market-determined that this statement was a side effect of the price cut move.
Remember the first quarter of this year, almost all new energy car companies are actively involved in the wave of price increases? How is it that after only six months, the sales price system is breaking down to catch up with the speed of the idol collapse of the house? Is it really like a media report, a domestic new energy vehicle executive said the same: “This year does not sell cars at a loss, next year even the opportunity to sell cars at a loss.”
From the report of “First Financial”, we can see that in the first three quarters of this year, the deposits in China’s residential sector increased significantly. In this regard, the report analyzed: while increasing preventive savings, the residential sector shifted more incremental assets from the real estate side to the time deposit side, which is the residential sector taking the initiative to adjust the household asset structure.
In mid-September this year, the six major state-owned banks (ICBC, Agricultural Bank of China, Bank of China, Construction Bank of China, Bank of Communications and Postal Reserve Bank), plus China Merchants Bank, collectively lowered their RMB deposit listing rates. Whether it is a call or a whole deposit, interest rates have been reduced, the largest margin is the three-year whole deposit interest rate. Once the policy came out, a host of professionals analyzed it, and the policy level wanted to further stimulate consumption and inject vitality into the economy.
However, from the launch of the policy to the ground effect, it is bound to need a period of transition time. And this transition time, to a certain extent, can be regarded as a vacuum period for the residents of the bulk of consumption – including new energy vehicles.
In other words, in the context of the year-on-year increase in car ownership per 1,000 people in China, under the constraints of the consumer downturn, for most new energy car companies, the stock market is still the stock market, which directly determines if you want to fight for more sales, you still have to grab.
Put aside the three electric technology, the intelligent level of these need to educate the cycle of marketing grasp, a price reduction may be the only effective means.
Take Tesla, for example, Model Y rear-wheel drive version price after a new round of price adjustments back to 300,000 RMB, which means that at this time to buy the model owners can enjoy more than 11,000 RMB national new energy vehicle subsidies in 2022, compared to the price reduction before the 28,000 RMB less. And the price cut on the consumer market stimulus is directly clear, according to the “future car daily” report, in the Tesla price cut news issued, only morning time, Beijing area orders have broken a thousand units, burst single trend continues to rise.
Another reason for the new energy car companies to reduce prices, and excess capacity brought about by the inventory pressure has some relevance. According to the latest “China Automobile Dealers Inventory Warning Index Survey” released by China Automobile Dealers Association, in October, China’s auto dealers inventory warning index was 59.0%, up 6.5 percentage points year-on-year and 3.8 percentage points year-on-year. This indicates that the overall inventory of auto dealers was under pressure in October, with terminal sales falling short of expectations.
But to be clear, the price reduction itself is not the original sin, the original sin is not to let the user get respect, is the user perceived by the “cut leek” sense of being hoodwinked? After all, price stability and consumer trust in the brand is closely related, no one user wants to open the phone the next day when the overwhelming is about their just mentioned less than a month of new car official announcement of price cut news.
If car companies take the initiative to be cheaper, you will not really want to buy a new energy car.
In that case, not to reduce the price of the line? Yes, and no.
The former is based on the fact that the manufacturing cost of new energy vehicles is still high. From the perspective of power battery manufacturing costs alone, according to data from the business community, as of November 15, battery-grade lithium carbonate reported 587,000 RMB / ton, up 120% from the beginning of this year, compared to 53,000 RMB / ton at the beginning of 2021, an increase of up to 10 times.
The latter reason is that if not through price cuts to achieve the brand “catch up”, to reach the sales target set at the beginning of the year is more or less a difficult task. Mercedes-Benz, for example, the relevant data show that in October this year, the domestic sales of Mercedes-Benz EQE only 678 units, and EQE, EQA, EQB, and EQC in the first 10 months of cumulative sales of less than 12,000 units.
Between the line and not, there is no excuse for choosing the latter. Although the initiative to reduce the price is clearly to do a money-losing business, contrary to the original intention of the business, not reducing the price represents a lost opportunity to fight for market share.
Why not just drop it, not to mention the fuel car companies to do this is not a day or two.
So, how to reduce prices scientifically?
At the very least, it is the new energy vehicle enterprises to start from the perspective of business, to give consumers a buffer period. This buffer period can be both the price reduction before the price guarantee commitment, can also be like the price reduction given by Mercedes-Benz after the compensation policy. In the sales training techniques, the company should also be regulated internally, and realistically avoid promises such as “no new models will be launched within the year”. Even, the new energy vehicle enterprises should be clear that even if the current era of “software-defined cars”, cars can not fundamentally follow the iteration speed of cell phones. Otherwise, behind those red orders, written all over is the sacrifice of consumer loyalty.
In short, if you are honest with the consumer, the consumer will report to the song.
In fact, price cuts or price increases, are following the laws of supply and demand in the market. Just like when we buy food in the market, after some bargaining, the stall owner will say, “If you really want it, I’ll sell it to you cheaper”.
Under the premise of gradually increasing brand awareness, under the premise of stable growth in user loyalty, and under the premise of maintaining a high level of potential customers’ willingness to buy, the probability is that they will — whether or not they are affected by the price reduction wave.