At the beginning of April, the price war in the automotive industry surged again, with multiple car brands announcing price reductions or launching limited time free benefits and low-priced models to compete in the market.
Wenjie was the first to announce an equity adjustment for the mid to large-sized SUV Wenjie M7, with a starting price reduction of 20000 yuan to 229800 yuan, and the cancellation of the technology comfort package worth 15000 yuan. This model delivered over 30000 units in a single month in January this year, with a cumulative total of over 140000 units since its launch.
The Xiaopeng G9, also a mid to large-sized SUV, closely follows the pace of the Wenjie M7. The current car has a limited time discount of up to 20000 yuan, and the maximum optional discount value is 8000 yuan. After adjustment, the selling price of the Xiaopeng G9 ranges from 243900 to 339900 yuan.
This year, Xiaopeng Motors has repeatedly lowered the prices of its models for sale. The starting price of the Xiaopeng G6, which is responsible for the main sales of Xiaopeng, has been reduced to 189900 yuan; The starting price of the Xiaopeng P7i has decreased by 15000 yuan compared to before, and the limited time discount for the Pengyi Performance Edition of this model has reached 50000 yuan.
Due to an increase in models in the same price range and a slowdown in the overall growth rate of the pure electric market, Xiaopeng Motors had poor sales performance in the first two months. Affected by the Spring Festival holiday, Xiaopeng Motors sold 4545 units in February, falling to the lowest level in 23 months.
With the launch of Xiaomi's first model, the SU7, Xiaopeng Motors, which is located in the same niche market, will face greater pressure. The Xiaomi SU7 is positioned as a mid to large-sized sedan with a starting price of 215900 yuan, almost identical to the Xiaopeng P7i.
An automotive industry analyst told Interface News that the only thing Xiaopeng Motors can currently compete with Xiaomi Motors is its autonomous driving ability, and it is difficult for consumers to lean towards Xiaopeng Motors between the two.
Another model that directly competes with the Xiaomi SU7 is the Extreme Krypton 007, with five versions priced between 209900 to 299900 yuan. Or to cope with Xiaomi's impact, Jike 007 has launched an enhanced rear wheel drive version in the price range of 209900 yuan, which has added a 20000 yuan worth of benefits package. In March of this year, the sales of Geely Krypton reached 13000 units, and a total of 33000 units were delivered from January to March.
At the same time, NIO launched a maximum subsidy of 1 billion yuan for gasoline vehicle replacement. Starting from April 1st, gasoline vehicle users who replace NIO new cars will receive an additional 10000 yuan optional fund subsidy and other equity gifts worth approximately 15000 yuan.
This is also the second price adjustment by NIO in nearly half a month. On March 14th, NIO officially released a new BaaS battery rental service plan. After the adjustment, consumers used BaaS to purchase NIO models, and the car price was reduced by 70000 to 128000 yuan. The monthly service fee was also lowered.
Tesla has announced a price increase of 5000 yuan for all Model Y models, making it the only car company to officially announce a price increase. Previously, Interface News reported that Tesla's price hike in April was a monetization push aimed at boosting sales by the end of the first quarter.
However, while raising prices, Tesla also announced today that the Starry Sky Grey car paint, originally priced at 12000 yuan, is available as a free option for Model 3 and Model Y. This is also interpreted by the outside world as the beginning of Tesla's new quarter of promotions.
More and more analysts have lowered their expectations for Tesla's first quarter delivery volume. On average, analysts surveyed by FactSet expect Tesla to deliver 471000 electric vehicles in the first quarter, compared to 423000 in the first quarter of 2023. Tesla's growth rate has slowed down.
The Tesla Model 3 is a direct competitor to the Xiaomi SU7. Lei Jun mentioned about 17 times about Tesla and Model 3 during the launch event of the SU7. A car owner who purchased a Tesla Model 3 in 2023 told Interface News that if the Xiaomi SU7 were released a year earlier, he would lean towards the Xiaomi SU7.
Overseas analysts are optimistic about the trend of Xiaomi's first model. Jianyin International stock analysts believe that the pricing of Xiaomi's new car is lower than the market price and the institution's expectations, which will be beneficial for sales. Citigroup analysts say that the initial order situation for the Xiaomi SU7 looks encouraging, with an expected shipment volume of 60000 vehicles in 2024.
Recently, Xiaomi officials announced that within 24 hours, the data for the Xiaomi SU7 was close to 90000 units. However, if consumers have not locked their orders, they can receive a refund within 7 days, which has also raised doubts about Xiaomi's actual order data. Xu Jieyun, Special Assistant to the Chairman of Xiaomi Group and Deputy General Manager of the Marketing Department in China, denied on social media that the Xiaomi SU7 has a lock order volume of 20000 vehicles.
During a weekend on-site visit to Xiaomi's Shanghai store, Interface News noticed that the overall customer flow was higher than other brand stores, and consumers who wanted to see cars lined up to enter the store. Due to the strong demand for test drives, two groups of customers are required to jointly test drive, with each group only scheduled for 10 to 15 minutes, and can only experience urban roads, unable to experience intelligent driving.
An investor pointed out to Interface News that compared to previous concerns about Xiaomi's difficulty in entering the automotive industry at a high cost to create models that satisfy consumers, they are now more concerned about the possibility of lower prices putting pressure on Xiaomi's gross profit margin in the short term. They will focus on analyzing Xiaomi's financial report for the second quarter of this year and evaluating the overall profit impact of the automotive business on Xiaomi Group.
According to Zhu Kai, General Manager of Jielan Road Consulting, in an interview with Interface News, the high traffic of Xiaomi SU7 has formed a breakthrough effect, driving consumers who did not pay attention to new energy vehicles in the past to understand domestic electric vehicle brands and achieve the expansion of the pure electric market.
"After experiencing the Xiaomi SU7, potential consumers discovered by Xiaomi may also compare it with other competitors, which may drive some consumers who are unwilling to wait for a long delivery period to switch to other brand models."
In the first weekend of the launch of Xiaomi SU7, its competitor model, Jike 001, saw a significant increase in sales data, reaching 4500 units in just two days. Lin Jinwen, Vice President of Extreme Krypton Intelligent Technology, stated in an interview with Interface News and other media that Xiaomi's joining will accelerate the industry elimination race and help companies such as Extreme Krypton and Tesla "clean up the battlefield".
Automobile brands that mainly sell gasoline vehicles have also taken measures to cope with the impact of a new round of price wars. On April 1st, FAW Volkswagen announced a limited time additional subsidy policy, including additional cash subsidies, replacement subsidies, etc., with a maximum value of approximately 33000 yuan. Chery's latest subsidy policy shows that a maximum discount of 30000 yuan is available for replacement, and some models are exempt from purchase tax.