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Author | Zelin Leng
Editor | Pan Wang
On May 13, both JiKe and NIO announced a “price increase” again.
NIO’s only model affected is the ET7, and its starting price for all models will be raised by 10,000 yuan starting from May 23. Users who pay a deposit before May 22 and receive the car this year will not be affected.
JiKe’s price increase is relatively “hidden”. From 00:00 on June 1, the purchase rights of the two versions of WE models under JiKe 001 will be adjusted. Two free configurations, 21-inch wheels and a 7kW smart home charging pile (including basic installation services within 50 meters of the cable) will be canceled.
The model is not affected, but the official price for these two privileges is also around 17,500 yuan.
This is not the first “price increase” for JiKe and NIO this month.
On May 1, JiKe adjusted the prices of all models of the 001 series, canceling the deposit inflation rights of 5,000 yuan for 10,000 yuan car payment for the WE version, and raising the price of the YOU version by 18,000 yuan, canceling the pricing inflation rights of 5,000 yuan to 7,500 yuan. The net increase in price was 20,500 yuan.
On May 10, the starting prices of NIO’s ES8, ES6, and EC6 models were increased by 10,000 yuan each. The price of the BaaS battery rental was also adjusted. The long-life battery pack was adjusted from 1,480 yuan/month to 1,680 yuan/month, and the battery pack was flexible upgraded to the long-life battery pack annually at a price of 9,800 yuan.
In other words, only the ET5, which has not yet started delivery, is not affected by NIO at present, and other models have all increased in price. JiKe has been affected entirely, so from a consumer perspective, the price of JiKe’s entire series of models has actually risen twice.
In addition, all new energy vehicles under the Lynk&Co and all models of SAIC Volkswagen (including fuel vehicles) also ushered in the overall price increase in the current month.
Regarding new energy, Li Xiang, the CEO of Li Auto, once said on Weibo, “As far as it seems now, brands that have agreed on the second-quarter battery price increase with battery manufacturers have immediately announced the price increase. Most of those who have not yet increased prices are still waiting for the price increase to be negotiated before immediately raising prices.”According to the data from the China Passenger Car Association, the retail sales of new energy vehicles (NEVs) in China in April were 282,000 units, a decrease of 36.5% compared to the previous month.
Due to the impact of the epidemic, many NEV companies had a difficult April. Even the leading player, NIO, suffered a sharp drop in deliveries. As a countermeasure to boost sales, XPeng Motors has introduced several new models and adjusted their specifications.
Recently, the XPeng P5 has introduced new versions with 460P and the XPeng P7 has added 480G+/E+/586G/625E, adjusting the models’ driving range and configurations. In addition, XPeng has made the intelligent driving assistance system software and upgrade services compulsory for the corresponding version of the P5/P7 E/E+/P.
This was done because, compared to hardware, software has higher gross margins and lower replication costs.
However, new users who purchase the XPeng G3i, P5, and P7 will no longer receive free lifetime charging service and free home charging piles and installation rights.
This move has made XPeng’s product line incredibly complex. Currently, there are 21 versions of P7 and 11 versions of P5 on sale.
So, the question arises, will the price of NEVs rise or fall?
Chen Shihua, Deputy Secretary-General of the China Association of Automobile Manufacturers, stated that the recent overall price increase of NEVs was due to the transmission of upstream raw material price increases. It is a price increase that the companies had to face and was completely unexpected. Once raw material prices return to normal, the overall price of NEVs will also decrease.
However, Chen also pointed out that there will not be a significant drop in raw material prices in the short term.
It should be noted that the first round of price increases earlier this year was due to the phasing out of subsidies. The second round of price increases was due to the rise in upstream raw material prices. This trend is still in its final stages.
After this round of price increases, almost all NEVs have completed their price adjustments. In the short term, it may be difficult to see another price increase unless there is another surge in raw material prices.
Nevertheless, manufacturers may attempt to adjust prices indirectly by adjusting configurations, reducing benefits or offering discounts. In particular, for models with lower profit margins, some manufacturers may wish to avoid the risk of a sharp drop in sales due to a significant price increase, and continue to implement small incremental price increases.
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.