At the beginning of March, BYD and Tesla launched a new wave of price reductions.
On March 1st, BYD launched another wave of "lower electricity than fuel" and launched the BYD Song Pro DM-i Honor Edition, with a starting price of 109800 yuan. Since February, BYD has been "crazy" and has continuously launched multiple "Honor Edition" models, which have been criticized by netizens as "directly lifting the floor.".
On the same day, Tesla announced three heavyweight discounts for the Model 3 and Model Y models: an 8000 yuan limited time car insurance subsidy, a 2000 yuan designated car paint limited time car discount price, and a low interest rate for limited time car finance. It is understood that after various discounts are combined, the Model Y new car will be taken by the end of March, with a maximum discount of nearly 35000 yuan.
In addition to the two leading car companies BYD and Tesla, car companies such as Nezha, Zero Run, SAIC Volkswagen, and Cadillac have all joined the price war, and a new round of car price war is coming with great momentum.
Tesla "lowers prices three times in three months"
On March 1st, Tesla announced a triple discount: firstly, purchasing existing models such as the Model 3 rear wheel drive and Model Y rear wheel drive can enjoy a limited time current car insurance subsidy of 8000 yuan; The second is to enjoy the benefits of existing car companies. All versions of the Model 3 and Model Y can purchase designated paid car paint for only 2000 yuan. For example, the original Starry Grey and Flame Red car paint prices were 12000 yuan, which is equivalent to a direct reduction of 10000 yuan after discounts; The third option is to purchase the current Model 3 and Model Y rear wheel drive versions, and enjoy a limited time current car financial low interest rate as low as 1.99% per year.
To enjoy the above discounts, you need to pick up your current car before March 31, 2024 (inclusive). Taking the 2024 Model Y rear wheel drive version as an example, in addition to receiving a limited time insurance subsidy of 8000 yuan, the current low interest discount can save up to about 16600 yuan, and can also enjoy a designated car paint discount of up to 10000 yuan. When converted, the total purchase benefit is as high as 34600 yuan.
And this is not the first time Tesla has launched a "price reduction wave" in 2024. On January 12th, Tesla's official website in China was updated to adjust the prices of the Model 3/Y rear wheel drive and long range versions, with a reduction range of 6500 to 15500 yuan. After adjustment, the starting price of Model 3 is 245900 yuan, and the starting price of Model Y is 258900 yuan.
After the price adjustment, Tesla's prices in the Chinese market are significantly lower than those in other countries around the world. Taking the Model Y rear wheel drive version as an example, the starting price in the Chinese market is 258900 yuan, which is more than 100000 yuan cheaper than markets such as Germany, France, and Canada.
Industry insiders have told reporters that Tesla, which can be considered a "benchmark" in production technology, sales services, brand influence and other fields, has already gained the "voice" of industry pricing. This price reduction will further lower the price threshold for electric vehicles across the industry, sparking consumer enthusiasm for purchasing electric vehicles.
On February 1st, Tesla announced once again a limited time discount less than a month after announcing a price reduction. According to Tesla's official Weibo account, any model of Model 3/Y/S/X can be ordered and delivered by the end of March, with an annual fee rate starting at 2.5%. Orders for the designated version of Model Y will enjoy a cash discount of 8000 yuan.
Overall, Tesla has conducted a total of three price reductions or promotions in the first three months of this year. According to a research report from China Galaxy Securities Research Institute, the decrease in upstream lithium resource costs and processing fees in the supply chain has also provided Tesla with more room for price reduction, and Tesla's ability to control industry wide costs has also eased the pressure of price reduction. However, continued price reductions will further compress Tesla's profit margins.
BYD takes the lead, with multiple car companies joining the "price war"
On March 1st, BYD launched the BYD Song Pro DM-i Honor Edition with a starting price of 109800 yuan, entering a new chapter of "lower electricity than fuel".
Previously on February 29th, BYD also launched the Song PLUS DM-i Honor Edition with a starting price of 129800 yuan and the Song PLUS EV Honor Edition with a starting price of 149800 yuan. At the same time, BYD also launched the B-class car "New King Fried" Seal DM-i Glorious Edition, with a starting price of 149800 yuan.
Recently, BYD has successively released multiple "Honor Edition" models, making many car companies "headache at the first hearing of the Honor Edition". On February 19th, BYD launched the Qin PLUS Honor Edition and Destroyer 05 Honor Edition with a starting price of 79800 yuan. On February 23rd, the BYD Dolphin Honor Edition was officially launched with a starting price of 99800 yuan. On February 28th, the BYD Hantang Honor Edition model was officially launched, with an official guide price starting from 169800 yuan.
In the context of the two leading car companies, BYD and Tesla, lowering prices one after another, many car companies have followed suit in lowering prices.
On March 1st, Feifan Automobile announced on its official WeChat account the launch of a limited time purchase discount policy for the Feifan F7, with a maximum discount of 30000 yuan. By March 31, 2024, except for the unchanged price of the Feifan F7 urban version, the advanced and advanced Pro versions will be reduced by 25000 yuan, and the extended Pro and performance Pro versions will be reduced by 30000 yuan.
On February 19th, Wuling Automobile officially announced that the price of the Wuling Starlight 150km advanced version was reduced by 6000 yuan, and the adjusted price was 99800 yuan. At the same time, Wuling Bingguo has also launched a New Year surprise red envelope, offering a maximum discount of 8000 yuan. On the same day, Nezha Motors officially announced a price reduction of 22000 yuan for the entire Nezha X series, 8000 yuan for the entire Nezha AYA series, and 5000 yuan for the entire Nezha S series.
In addition, the Zero Run T03, Deep Blue S7 pure electric version, SAIC Volkswagen Lavida, and Cadillac CT5 luxury models have all announced price reductions, and the automotive market from below 100000 yuan to over 200000 yuan is engaged in a price war.
According to a research report by Minmetals Securities, in February 2024, new energy brands including BYD, Changan Qiyuan, Nezha Automobile, and SAIC GM Wuling all announced price reductions. On the one hand, the decrease in prices of lithium carbonate and other materials has led to a decrease in battery costs, and on the other hand, it may be due to intensified competition among car companies.
According to the GAC Automotive Research Institute, in 2024, due to the dilution of fixed costs caused by the increase in scale of electric vehicles and the decline in lithium prices, there is still room for price reduction in automotive products. It is expected that the price war of 2023 will continue in 2024.
According to Wind data, as of February 29th, the average price of domestically produced battery grade lithium carbonate was 99500 yuan/ton, a significant decrease of over 70% compared to the same period last year. According to a research report by Guolian Securities, the price of lithium carbonate, a core raw material in the lithium battery industry, is approaching the bottom. In 2023, the cumulative price of lithium carbonate has dropped by 82%. Currently, the price of lithium carbonate has fallen back to the level at the beginning of 2021. It is expected that in 2024, with the growth of demand, it will achieve a stable rebound.
According to a research report by China Galaxy Securities Research Institute, although price wars are unfavorable for car companies to make profits, from a cost perspective, the decrease in lithium carbonate prices and the continued play of economies of scale are expected to offset some of the price reduction losses and enhance the resilience of the industrial chain operation.
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