Author: Zhang Xianglong

In the new year, the new energy vehicle market has become more interesting. Whether it is traditional automakers or new players, the announcements of price reductions and increases are intertwined, but from the overall trend, more are rising, while there are also many price reductions and some automakers have raised prices first and then lowered them.

First of all, the first wave of collective price increases at the beginning of the year is a coincidental agreement among new energy vehicle companies due to the cancellation of national subsidies and the rise in raw material costs.

Compared to the overall trend of rising prices, price reductions are more interesting news. The performance of different automakers in the automotive market varies, and whether they reduce prices or not reflects certain signals and different attitudes towards each other.

In this wave of price reductions, NIO has the largest single-car “reduction” range and has attracted a lot of attention.

However, is the rumored “reduction of 100,000 yuan” really an exaggeration?

According to NIO’s official announcement of the “Limited-time Discount Purchase Plan for February 2023”, the 2022 ES8, ES6, EC6, ET7, and ES7 models all have different levels of preferential policies, with a total of 7 types of preferential policies.

Among them, the 2022 ES8 enjoys the largest discount, and according to NIO’s official announcement of the “Limited-time Discount Purchase Plan for February 2023”, the total value of all basic preferential policies, subsidies, and other benefits for the 2022 ES8 model is 86,600 yuan.

At the same time, according to the official statement, the rumored full-package NIO Pilot worth 39,000 yuan is only available to some NIO employees, and it was suspended on February 3.

In other words, NIO did indeed launch preferential “price reduction” measures for some models, with the highest total value exceeding 80,000 yuan, but it is not as high as the rumored 100,000 yuan, and it is not a direct cash price reduction. Although these two points may seem similar, they are significantly different in meaning.

In addition, even the highest discount of over 80,000 yuan is actually the result of multiple policy overlaps.

For example, 10,000 yuan Shanghai new energy replacement subsidy and 20,000 yuan purchase subsidy in Jiading District of Shanghai, but these policies are not universal, and the models are limited to a small number of “limited cars and inventory cars”.

In the official community, Li Hongqi, CEO of NIO, also said that 866 is about to be upgraded, and this is a clearance measure, not an across-the-board price reduction.

So a clear message, that NIO has “cut prices by 100,000 yuan” circulated on the Internet, is exaggerated in fact.

However, just by opening up multiple policy discounts, NIO’s move is still worth paying attention to.

After all, NIO founder Li Bin has repeatedly stated that “NIO will never reduce prices” and that a one-price policy has always been emphasized.

And although this time it is not a direct reduction of 100,000 yuan in cash, measures such as a 5,000 yuan full payment discount and over 10,000 yuan in official subsidies for new energy vehicles are only aimed at “special” models, but it is still a big difference from a price reduction.

Especially now that many new energy car companies have started a second round of price cuts, NIO’s move is somewhat reminiscent of “NIO can’t hold back”.

In fact, regarding price reductions, the new year is another opportunity for Tesla to play its predatory strategy.

At the beginning of January, just two months after the last round of price cuts, Tesla once again reduced the prices of its new cars. The highest reduction for its models reached 48,000 yuan. Musk is really ruthless, and this time it dropped the prices of Tesla’s Model 3/Y to the lowest point in history in China.

Tesla “slashes its own sword” on prices, but other players can’t escape either, and a new round of price cuts has begun among China’s new automakers.

After Tesla announced price reductions on January 6, AITO, XPeng, and GAC Aion all announced various price reductions and preferential policies.

For example, on February 2, when NIO was exposed to “price cuts,” RisingAuto Motors also announced a product price adjustment. The price of the RisingAuto R7 electric vehicle was reduced to 195,900 yuan, a decrease of 22,600 yuan compared to the previous price, which is also relatively high.

This is even the second price reduction measure that RisingAuto has taken at the beginning of the year. In January of this year, after Tesla reduced prices, RisingAuto also adjusted its prices: “Before February 28, 2023, purchase RisingAuto R7 and enjoy a limited-time car purchase gift worth 21,000 yuan, and the price of the electric vehicle separation will be 218,500 yuan.”

Within two months, many brands announced price reductions, and there were even car companies that lowered their prices several times. At the start of the new energy vehicle market in 2023, it could be said that it was “rolled up to the bottom” and hit the public screen.

Looking at the comprehensive car market sales volume, perhaps this is also a last resort. In the just-concluded January, only one domestic new car company, Ideal One, saw an increase in sales compared to the same period last year. The sales volumes of NETA, AITO, Zeekr, and Voyah all declined significantly, and even the sales of Leapmotor fell sharply by more than 80% month-on-month and year-on-year.

As for NIO, a total of 8,506 new cars were delivered in January, a year-on-year decrease of 11.87% and a month-on-month decrease of 46.20%. In this situation, pushing preferential policies or directly announcing price reductions may not be a good approach, but it can indeed stimulate some orders and add confidence for the next stage.Just because of the cost control advantage, even if it means “self-loss of 800”, it can “kill 1000 enemies” in terms of price reduction. Overall, Tesla’s price reduction only reduces profit margins, making some less money is still earning.

But for other new forces, facing Tesla’s price cutting, whether choose to follow with a price cut or not, it is a more painful decision.

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.