On March 24th, Avatr launched the single-motor version of the model 11, with only two versions available. The 90 kWh version is priced from 319,900, and the 116 kWh version is priced from 349,900.
For Avatr, the single-motor model is the most important card for the brand this year.
Why is this model extremely important for Avatr?
Avatr 11 was formally announced in August last year, with prices starting from 349,900. As only the dual-motor version was released, the price didn’t strike as “impressive”.
Moreover, the benefits introduced at the launch were limited to “Lifetime Advanced Autonomous Driving Package” and “Free Installation of Charging Pile or One-time Conversion of 3,000 kWh Free Charging”.
From Avatr’s configuration parameters, 349,900 is not expensive and offering a lifetime advanced autonomous driving package is a useful configuration. However, after experiencing the ZEEKR 001 launch, consumers’ expectations have been raised, hoping for a price and benefits exceeding their expectations.
Currently, Avatr’s price and benefits can only be regarded as meeting or even falling short of expectations. Thus, Avatr’s first shot has not made a tremendous impact.
Upon receiving user feedback, Avatr promptly adjusted its benefits. By November 2022, it had secured 5,000 orders, amounting to a total of 6,000 vehicles delivered in the past three months.
Looking at the delivery volume in March, Avatr 11 took top spot in the Chinese high-end pure electric SUV ranking, outperforming the soon-to-be-updated NIO ES6 and the newly launched Xpeng G9. From this perspective, Avatr 11 has given a solid display of performance.
However, a closer look at the “high-end pure electric SUV” segment in China, the combined sales of the top 10 is just 7,500 units, still trailing behind the monthly sales volume of the BMW X5L.
Clearly, such a sales figure is far from sufficient for newly established brands.
At the end of 2021, Avatr was officially established with the backing of CCAG, Huawei, and CATL. The collaboration among these three companies aims to secure a favorable position in the automotive industry’s reshuffle towards new energy and intelligentization, at the same time, propelling Chinese brands forward.To secure a favorable position, robust sales performance is indispensable. In the current climate, sales performance acts as a magnifier, an indicator of success for emerging automakers.
To consumers, sales volume endorses a new brand. Higher sales numbers signify greater acceptance, allowing potential buyers to minimize their concern over brand credibility.
For automobile manufacturers, a larger user base signifies greater exposure and lower distribution costs.
Additionally, with increased sales, the per-unit production cost becomes lower, thus enabling higher gross profit from each vehicle, and an increased negotiating power in the supply chain. This constitutes a virtuous cycle for automakers.
Thus, sales figures act as catalysts in an auto maker’s development. In an environment that places a high emphasis on efficiency, such catalysts become increasingly crucial.
With the onset of digitization, be it smart cockpit or autonomous driving, manufacturers require significant user data and feedback for continuous iteration and improving product capabilities.
Clearly, AVATR’s top management team recognizes this.
However, constrained by product development rhythm, buyer delivery for AVATR’s upcoming E12 model won’t commence until year-end at the earliest. Therefore, this year’s sales still heavily rely on the “11” series. Consequently, launching a more affordable vehicle to stimulate sales appears crucial.
AVATR’s ace is the single-motor 11.
This strategy strongly aligns with Tesla’s approach at its Model 3’s initial home market entry—introducing a more expensive dual-motor version initially, then launching a cheaper, single-motor, long-range vehicle to stimulate sales when market demand weakens.
The question then arises—how capable is the AVATR 11 single-motor model, and can it stimulate sales?
How Capable is the AVATR 11 Single-motor Model?
Firstly, reasonable price and well-intentioned benefits policy.
In terms of pricing, the AVATR 11 single-motor model offers two versions. A 90 kWh unit priced at 319,900, and a 116 kWh variant at 349,900. Additional configurations like Nappa leather upholstery, electric doors, fragrance, and hubcaps come with extra charges.
Although the price of 319,900 is not as spectacular as the anticipated 299,900, the single-motor version only lacks a front-mounted 195 kW permanent magnet synchronous motor and an electric tail wing, compared to the dual-motor version. From a Bill Of Materials (BOM) cost perspective, the cost savings from these components is well below 30,000, yet AVATR reduced the dual-motor version’s price by 30,000.
In terms of pricing, AVATR not only trimmed the basic material cost but also applied a discount—a clear indication of its sincerity.
In addition to pricing, AVATR also offered the following:
- A deposit of 5,000 offsets 10,000
- A bonus insurance subsidy of 6,000* 36-month interest-free policy or a direct reduction of CNY 10,000 on the full payment purchase
- Car owner invitation leads to a direct reduction of CNY 2000
- Gifts for seat cabin upgrades worth CNY 8000
Thus, for those who truly wish to purchase a car, choosing to pay in full grants you a real cash discount of CNY 23,000, bringing the price down from CNY 319,900 and CNY 349,900 to CNY 296,900 and CNY 326,900 respectively.
Avatr has cleverly offered consumers a surprise price whilst maintaining the brand’s identity as a high-end option priced over CNY 300,000.
Moreover, at the lowered prices, one can buy the Avatr 11 which comes standard with Huawei’s top-tier Advanced Driver-Assistance System (ADAS) in the former, and a 116 kWh battery capable of a 700+ km range and 240 kW fast charging in the latter.
Compared to the similar Xpeng G9, the Avatr 11 boasts a more flamboyant and distinctive design. With a battery capacity of 90 and 116 degrees, it greatly surpasses the G9’s 78 and 98 degrees, yet maintains a lower price point.
However, Avatr lags significantly in terms of intelligent cockpit experience, with Xpeng’s proprietary voice assistant and Xmart OS infotainment system giving the G9 an edge.
Further, due to its design, the Avatr 11 has a trunk space of only 394 liters, significantly less than G9’s 660 liters and does not support foldable back seats, compromising practicality.
Compared to the Tesla Model Y, the Avatr 11’s 750V electrical architecture guarantees faster charging capabilities. The opening of city navigation assisted driving in Shanghai, Shenzhen, and Guangzhou has led to the Avatr 11 offering a far superior smart driving experience than the Tesla Model Y.
However, the Model Y has an advantage over the 11 in terms of price.
In its niche market, the Avatr 11 excels in design, battery life, charging speed, and intelligent driving. This has led Avatr to secure strong sales rankings within its market segment.With the launch of the single motor, the significant meaning is that a lower starting price has moved the Avatr 11 into more people’s car-buying plans, turning more potential buyers’ mind-set from “too over budget to look” to “worth a look”.
As per the shop visiting data collected by Professor Sun Shaojun, the launch of the single motor Avatr 11 has led to an average increase of 15-20 orders per store, resulting in a 100% growth rate.
What’s fascinating is that, out of every 10 new orders, 4 are for the 369,900 RMB dual-motor, 3 are for the 319,900 RMB long-range single-motor, and 2 are for the 409,900 RMB ultra-long-range dual-motor luxury version.
Despite these data gathered post the single motor launch, the proportion of dual-motor orders surprisingly turns out to be higher. This indicates that the introduction of the single motor variant drew attention to Avatr, with many customers getting attracted to the brand and opting for the dual-motor model upon their visit to the store.
Both in terms of product capabilities and marketing impact, the launch of the single motor will undoubtedly take the Avatr 11’s sales to new heights.
The launch of the single motor model is a brief victory in this campaign for Avatr. However, the power of a single model is limited. With concurrent brands like NIO, Xpeng, and LI launching anywhere from 3 to 6 models, traditional brands are also entering the EV market in droves, and LI and NIO have even set their sales target for this year at 250,000 units.
The Chinese auto market has moved beyond its rapid-upscaling phase and is even shrinking, despite the flourishing EV market. The entry of fresh players and the transition of established players are causing the competition in the EV sector to intensify.
So for Avatr, on one hand, it needs to keep improving on the 11’s in-car experience, making it a breakthrough model without noticeable weaknesses and achieving high sales. On the other hand, it also needs to accelerate the launch of additional models to broaden their product portfolio.
Only those with strength can stay in the game during times of change.
This article is a translation by AI of a Chinese report from 42HOW. If you have any questions about it, please email firstname.lastname@example.org.