Introduction
During the 2022 Chinese New Year holiday, the rise in domestic subsidies and raw material prices has gradually led to an increase in the end-user prices of electric vehicles, but it hasn’t dampened the enthusiasm of domestic consumers for electric cars. As long as they have competitive electric vehicle models, they can not only occupy a place in the domestic electric vehicle market but also achieve good sales performance.
Overall, new energy vehicle makers have generally made a strong start, with a significant increase in year-on-year sales. In particular, even though Leading Ideal One has not generated any range anxiety, Xpeng P5 is equipped with solid-state LiDAR, while the NIO ES8, ES6, and EC6 old models’ matrix, NIO’s ES8, ES6, and EC6, are no longer as competitive due to the onslaught of competitors. NETA and the Zero Run, which have made the highest cost-performance ratio, have surpassed them. Now, NIO urgently needs to find a unique brand label; otherwise, even NETA and Zero Run behind them have a great chance of overtaking NIO.
NIO’s Top Three Defending Battlegrounds
For NIO, although the absolute sales volume of 9652 cars per month isn’t low, whether NIO’s delivery volume is overtaken by NETA, it can only be ranked fourth among new energy vehicles; a sales growth rate of 33.6% is also among the weakest in the top five new energy companies. It is a phenomenon that deserves attention.
The ES8, ES6, and EC6 models, which are made up of NIO’s previous-generation models, have lost competitiveness as competitors attack the car market. When looking at its competitors, Ideal One has no range anxiety, while Xpeng P5 is equipped with solid-state LiDAR. NETA overtaking NIO and Zero Run, which has had a sales growth rate of more than 200% year-on-year for ten consecutive months, have made the highest cost-performance ratio. Now, NIO has to find a unique brand label or even with the strength to defend against its competitors.
Betting on ET5
NIO now has all its hopes in ET5, which will be delivered in the middle of this year. Even before ET7’s rollout, NIO has revealed all the details of ET5, including its price.
ET5 has a high cost-performance ratio, is equipped with solid-state LiDAR, and has an intelligent cockpit that incorporates AR/VR technology. For NIO, waiting for ET5 to be delivered on a large scale will be the key to NIO’s success this year.
However, we need to be wary that, although ET5 has strong product capabilities, its competitors have also significantly grown stronger. Everyone has taken Model 3 as the benchmark and designed their cars accordingly, even pursuing comprehensive overtaking on paper products. Therefore, there are undoubtedly a lot of variables involved as to whether ET5 can stand out in the midsize car’s niche market. If ET5 can only be delivered at a rate of about 3000 per month, NIO will face tremendous pressure.
The target of 200,000 units set as priority
For both XPeng Motors and NIO, the annual delivery target of 200,000 units could be set as priority now.
Although XPeng G9’s delivery will not be until August or September this year, its existing three models still have great potential to boost sales growth. Therefore, it is highly likely for XPeng Motors to exceed 200,000 units this year assuming that the chip shortage will be alleviated to some extent and there will be no other unexpected events.
For the case of Li Auto, they will launch their second large SUV model, Li X01, besides Li ONE in 2022. Li X01 will also adopt range extender technology, with 40% thermal efficiency of the 1.5T four-cylinder Miller cycle engine, and the driving motor coming from Great Wall Motors. The pure electric range of Li X01 is 155 km under WLTC conditions, and the total range could exceed 800 km with a 65-liter fuel tank. As long as the pricing of this model is reasonable, Li Auto still has a great possibility of gaining the last round of NEV subsidy by Li ONE and Li X01 combined.
From the perspective of NIO, they need to reflect on many things from initially firmly occupying the leading position among new forces, to later entering into a fierce competition with XPeng and Li Auto, and then being overtaken by Zeekr for several times last year.
As mentioned above, there are still great risks to put all the hopes on ET5. How to operate the existing models well is a considerable challenge for NIO. Even if ET5 can support a large part of NIO’s business, it is not good news if other models are sacrificed. After all, there is not much attention on the upcoming ET7 from all sides, and it is hard to say whether it is a case of 1+1>2 or ET5 takes away all the sales of ET7 at the moment.
# NETA, 2021 has successively secured investments from 360 and CATL, and its first model NETA S based on the Shanhai platform will be launched in 2022. This model will not only have a pure electric version, but also an extended range version. The pure electric version has a comprehensive range of up to 800 kilometers, while the extended range version is up to 1100 kilometers. The new platform is backed by significant investments, bringing an overall improvement in performance. With stable sales at the terminal, NETA seeks to upgrade its product strength to drive sales and brand positioning.
The Battle for Luxury Brands in Electric Cars
Once domestic new energy vehicle manufacturers reach an annual delivery volume of 200,000 units, it will undoubtedly pose the biggest challenge to domestic luxury car brands.
This volume means that it will surpass the sales volume of domestic luxury car brands like Volvo, Lincoln, and Infiniti, and also pose a great threat to Cadillac and Lexus’ status.
BBA, with its scale accumulated over the past few decades in China, is short-term unlikely to be surpassed by new energy vehicle manufacturers. However, in the long run, it is possible to be surpassed by domestic new energy vehicle manufacturers if it still cannot open up the sales situation of electric vehicles.
In terms of product strength, it must be said that the latest products from NIO have exceeded the leading level of foreign luxury car brands by a generation or even more. In terms of autonomous driving and intelligent cabins, domestic new energy vehicle manufacturers are not falling behind at all. As for the three electric systems, especially in terms of range, they are far ahead of BBA’s electric vehicle models.
New energy vehicle manufacturers with the genes of the internet are indeed better at capturing domestic customer needs. In the era of software-defined cars, internet capital, which has emerged from a competition that is far more cruel than the automotive industry, knows better how to attract domestic consumers. For BBA and other luxury car brands, they must face up to the fact that domestic new energy vehicle manufacturers are no longer just disrupting players, but may become rule makers and future leaders in the industry.
In 2022, there are many highlights in the domestic automotive market, especially the five new energy vehicle manufacturers who may create waves and have an impact on the domestic electric vehicle market.
It must be said that NIO may face a new crisis since 2020. Whether it can stabilize its terminal sales and reverse its fate with ET5 will be the biggest highlight of the domestic electric vehicle market in 2022.From a larger perspective, the sustained rise of domestic new forces will inevitably touch more and more into the market share of traditional luxury brands, whether they are first-line camps such as BBA, or second-line luxury brands such as Cadillac and Lexus. How to confront the situation head-on will also be the key to determining whether they can further develop in the domestic market.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.