Top-performing new energy vehicles are also forced to lower prices | Jianzhi Research
The competition in the new energy vehicle market is fierce, with Tesla and Li Auto lowering prices to cope with market pressure. Tesla has made significant price cuts and may continue to lower prices to maintain competitiveness. The emergence of Xiaomi's SU7 has brought competitive pressure to Tesla, with orders exceeding 100,000 units. Other car manufacturers have also launched price reduction promotions
A new round of price cuts for new energy vehicles has begun.
Leading the charge this time are top performers Tesla and Li Auto. Tesla has reduced prices across the board by 14,000 RMB, while Li Auto has lowered the prices of its flagship L models by 14,000 to 20,000 RMB, and the struggling MEGA model has seen a direct price cut of 30,000 RMB.
1. Tesla Model 3's Starting Price is Now Lower Than Xiaomi SU7 Pro
The simultaneous price cuts by Tesla and Li Auto have different reasons behind them.
After a decline in delivery volume in the first quarter, Tesla has intensified its price reduction promotions, especially with the entry of Xiaomi SU7 into the market, making the competition fiercer.
In the first quarter of this year, Tesla's global delivery volume was 387,000 vehicles, a year-on-year decrease of 8.5% and a quarter-on-quarter decrease of 20.2%; global production was 433,000 vehicles, a year-on-year decrease of 1.7% and a quarter-on-quarter decrease of 12.4%. This is the first time in Tesla's history that both production and sales volumes have decreased year-on-year and quarter-on-quarter.
Tesla's strategy of reducing prices across the board reveals that the 5,000 RMB price increase in early April was only to stimulate customers to pick up their cars in the first quarter. The subsequent announcement of interest-free installment car purchases and a 14,000 RMB price reduction is the real promotional strategy. As production still exceeds orders, Tesla may continue to reduce prices in the future to maintain market competitiveness.
The emergence of Xiaomi SU7 has brought significant competitive pressure to Tesla. Orders for SU7 have exceeded 100,000 in less than a week, with locked-in orders exceeding 40,000, directly competing with Tesla Model 3.
The three versions of Xiaomi SU7 are priced at 215,900 RMB, 245,900 RMB, and 299,900 RMB, while the price of the rear-wheel drive version of Tesla Model 3 after the price cut is 231,900 RMB, not only the lowest in history but also lower than the price of Xiaomi SU7 Pro.
Other new energy vehicle companies have also been affected by Xiaomi SU7, and have launched price reduction promotions in response.
XPeng introduced a 500 million RMB car purchase subsidy on April 20 for its G9, G6, P7i, and 2024 P5 models; ZEEKR launched a rear-wheel drive version of the 007 with a starting price of 209,900 RMB, and also offered a 20,000 RMB optional package discount; Geely's Ruilin Auto reduced the price of Ruilin 9 by 20,000 RMB; Nio also announced a maximum of 1 billion RMB subsidy for oil car replacements.
2. Li Auto's Price Reduction is Not Related to Xiaomi, but Aims at Old Rival Aito
Although the release of Xiaomi SU7 has brought an impact to the pure electric sedan market, for Li Auto, an established player in the extended-range market and large vehicle types, the threat is not significant. The main reason for Li Auto's price reduction this time is to compete with Aito's price reduction, in order to increase sales and overcome the low sales volume in the first quarter In the first quarter of 2023, Ideal's overall performance fell short of expectations. As Ideal's first pure electric vehicle model, MEGA failed to become a new sales engine, leading Ideal to rely solely on the sales of the L series models.
Ideal's total sales in the first quarter were 80,000 units, a year-on-year increase of 52%. However, this growth rate has lagged behind Aito for three consecutive months, with the sales gap widening from 1,808 units in January to 2,743 units in March. Therefore, Ideal has lowered its full-year sales target by 20%-30% to 560,000-640,000 units. Even with the lowest target of 560,000 units, the first quarter sales of 80,000 units are just passing.
Aito continues to grow in sales and promotional efforts, with the order volume of the M series models steadily increasing. The M7 model launched a discount of 20,000 yuan in early April, and the order volume of the M9 model has exceeded 60,000 units. Against this backdrop, Ideal announced on April 22 to reduce the prices of all models except L6 by 18,000 to 30,000 yuan, especially reducing the price of the underperforming MEGA by 30,000 yuan.
After the price reduction, the price disadvantage of Ideal's L series models has relatively narrowed. The lowest prices for L6, L7, L8, and L9 are 249,800 yuan, 301,800 yuan, 321,800 yuan, and 409,800 yuan respectively, while Aito's M7, M5, and M9 have the lowest prices of 229,800 yuan, 249,800 yuan, and 469,800 yuan respectively.
Competition in the extended-range and plug-in hybrid large SUV market is relatively small, but with the intensification of overall market competition, more new energy vehicle companies are choosing to reduce prices to cope with competition. On April 1st, after Aito M7 announced a price reduction, competing brands such as Great Wall's WEY, Voyah Motors, and FAW-Volkswagen also introduced varying degrees of price reductions and promotional activities.
The price war in the new energy vehicle market is escalating, which will accelerate market reshuffling and provide opportunities for companies that can stand out, enhancing product competitiveness and brand influence