After the launch of the new price reduction measures, there have been a lot of people looking at and inquiring about cars, "a Tesla salesperson recently told the Daily Economic News reporter." Currently, most of the people who come to see cars are for the Model Y
On November 25th, Tesla officially announced that from now until December 31st of this year, the final payment of Model Y's limited time delivery will be reduced by 10000 yuan, with a starting price of 239900 yuan, and a five-year zero interest policy can also be added. Taking the Model Y rear wheel drive version as an example, the down payment is 79900 yuan, the annualized interest rate is zero, and the monthly payment is 2667 yuan.
Recently, reporters visited several 4S stores of car brands and learned that since November, several brands such as Tesla, NIO, and Jike have lowered their prices, launched car purchase subsidies, and implemented financial policies to promote sales. In addition, more brands such as Xiaopeng and Xiaomi have recently started to increase production capacity of new energy vehicle models to meet consumer demand.
Some people believe that as the end of the year approaches, due to the demand for national and provincial subsidies, many car buyers will prioritize models that can be delivered by the end of the year compared to similar cars. However, due to production capacity constraints, although some car companies have popular models, they may not be able to deliver them on time, which may affect subsequent orders.
Multiple car companies adjust prices to increase production capacity
In response to the expiration of subsidies such as' trade in 'at the end of the year, all of our car models are now available and can be delivered in a week, with an additional vehicle subsidy of 25000 yuan, equivalent to a direct subsidy of over 30000 yuan, "a NIO salesperson told Daily Economic News.
Starting from November this year, taking advantage of the "Double Eleven" promotion, many car companies have started the "closing battle" for 2024, and the price war in the car market has once again continued. For example, Jike provided discounts on all models from November 1st to November 30th, with a maximum savings of 110000 yuan, including a cash discount of 47000 yuan and a car purchase benefit of 63000 yuan. It also introduced a financial policy of 0 down payment and 0 interest. At the same time, SAIC Volkswagen and SAIC General Motors have also launched a "limited time fixed price" campaign for multiple of their models.
The reporter's investigation found that major new energy vehicle brands are striving to shorten delivery cycles in response to the demand for national subsidies and year-end rush for new energy vehicles. For example, the Volkswagen ID.3 smart model is sold for a limited time at a fixed price starting from 119900 yuan, and promises to be delivered within 3 weeks.
Previously, the MONA M03 model of Xiaopeng Motors faced production capacity issues due to the booming sales of its 620 ultra long range version, resulting in an extended delivery cycle of 17 weeks, which means owners need to wait at least 4 months to pick up the car. A salesperson from Xiaopeng Motors admitted to reporters that due to the high sales volume recently, the production capacity did not keep up, but recently it has eased a lot. We have now ordered the M03 long battery version and ultra long battery version, and we can guarantee delivery within 8 weeks, "he said.
The Tesla salesperson mentioned above stated that due to the Model Y price reduction campaign attracting consumer inquiries, it is expected to prioritize the delivery of the Model Y in the near future and stated that it can be completed within a week.
When asked if Tesla models will adjust prices next year, salespeople said, "Based on the current competitive market conditions, prices should not increase, but they will not further decrease because we still need to consider maintaining the product's gross profit margin
Car companies seize the final 'window period'
In fact, behind the signals of price adjustments and shortened delivery cycles from multiple car brand dealers, on the one hand, the subsidy policies such as the 2024 trade in of new energy vehicles are coming to an end; On the other hand, with the increasing competition pressure in the automotive market, many car companies are facing severe impulse pressure at the end of the year.
According to CCTV News, in April of this year, the Ministry of Commerce and 14 other departments jointly released the "Action Plan for Promoting the Trade in of Consumer Goods"; Subsequently, the Ministry of Commerce and seven other departments jointly issued the "Implementation Rules for Automobile Trade in Subsidies" (hereinafter referred to as the "Rules"). In August, a notice was issued on further improving the work related to car trade ins, raising the subsidy standards: for individual consumers who scrap and update their vehicles, the subsidy standards will be increased from 10000 yuan for purchasing new energy passenger cars and 7000 yuan for purchasing fuel passenger cars, respectively, to 20000 yuan and 15000 yuan.
In addition to scrapping and updating, the notice also requires all regions to accelerate the development of implementation plans for automobile replacement and updating, that is, to reasonably determine subsidy standards, subsidy conditions, and implementation methods for the transfer of second-hand cars and the purchase of new cars. For example, Beijing has clarified that newly purchased new energy vehicles after replacement not only include pure electric vehicles, but also plug-in hybrid (including extended range) vehicles and fuel cell vehicles. Both domestic and foreign transfers can enjoy replacement subsidies, with each vehicle receiving a subsidy of 15000 yuan.
It is worth noting that although relevant regulations have been issued at both the national and local levels, the above provisions have deadlines. For example, the "Detailed Rules" jointly issued by the Ministry of Commerce and seven other departments stipulate that consumers need to submit subsidy applications before January 10, 2025, and relevant materials must be obtained between the date of issuance of the "Detailed Rules" and December 31, 2024. That is to say, if you want to apply for the "trade in" subsidy, you need to complete a series of procedures such as scrapping the vehicle, purchasing a new car, and submitting the subsidy application before December 31st.
In addition, with the increasing competition pressure in the automotive market, many car companies are facing severe impulse pressure at the end of the year. According to relevant statistics, the proportion of car companies achieving their annual sales targets in the first 10 months of this year is not optimistic, with only a few companies achieving a completion rate of over 80%, such as BYD, Geely, Leapmotor, Xiaomi, etc. As the year-end approaches and the national subsidy policies for new energy vehicles enter the countdown to 2024, car companies are seizing the final window of opportunity.
However, on November 21st, Song Yingjie, a second level researcher from the Consumer Promotion Department of the Ministry of Commerce, revealed at the 2024 Automotive Finance Industry Summit that the Ministry of Commerce is planning ahead for the continuation policy of replacing old cars with new ones next year to stabilize market expectations.
Annual sales of new energy vehicles are expected to reach 11.5 million units
At present, the sales volume of the domestic car market is still growing rapidly. The latest data from the China Association of Automobile Manufacturers shows that in the first three weeks of November, the car market maintained a high level of operation since October, with daily retail sales of 56700, 77100, and 81400 vehicles, respectively, showing year-on-year and month on month growth. Compared with last year, the peak season of the car market in November this year has obvious characteristics. It is expected that the average sales volume will reach 120600 vehicles on the fourth week, and the overall estimated retail volume in November can reach about 2.4 million vehicles.
The limited time preferential policies launched by car companies, coupled with the support of national policies such as trade in, may further promote domestic car consumption this year. Fu Bingfeng, Executive Vice President and Secretary General of the China Association of Automobile Manufacturers, stated that new energy vehicles continued their good development trend in the first half of 2024, with sales reaching 4.944 million units, a year-on-year increase of 32%. It is expected that China's new energy vehicle sales for the whole year of 2024 will reach 11.5 million units.
With the process of marketization, the "new and old players" in the industry are also facing more intense competition, and how to balance sales and gross profit margin has become a common challenge faced by current car companies. Public data shows that in recent years, the profitability of the global automotive industry has shown a clear trend of narrowing. According to data from the China Association of Automobile Manufacturers, the average profit margin of the Chinese automotive industry in 2023 is 6.5%, a decrease of about 0.8 percentage points from 2022.
In this context, although international traditional car manufacturers rely on fuel vehicles to earn high profits in the short term, the trend of shrinking profits has emerged. At the same time, most emerging new energy vehicle brands are still in the investment period, and research and development investment has not yet generated returns. Regarding this, Zhang Yongwei, Vice Chairman and Secretary General of the China Electric Vehicle Hundred People's Association, told reporters that more and more new energy intelligent enterprises in China are crossing the profit turning point, and it is expected that the overall new energy vehicle industry will enter a profit cycle in a few years.
According to a research report by iMedia Consulting, the size of China's new energy vehicle market will reach 11.5 trillion yuan in 2023, with an annual growth rate of 16.2%, and is expected to increase to 23.1 trillion yuan by 2025. Consumers are increasingly concerned about the range and safety performance of new energy vehicles, such as long range, fast charging, and power system protection. With the improvement of charging facilities and the slowdown of market growth in first tier cities, second - and third tier cities have become new growth points in the new energy vehicle market.