Author: Tianhui

One year of discount now, three years of discount in pain.

The low residual value of electric vehicles is the biggest pain point for consumers and also the final pain point. Previously, the range, charging convenience, and price, all of which were complained by consumers, have been gradually solved or alleviated.

How to improve residual value?

As the saying goes, “What you buy is what you sell.” After using electric vehicles for a few years, only manufacturers know whether the quality and performance can be maintained. If manufacturers can guarantee that, consumers will have confidence.

The guaranteed plan has come.

On September 29, GAC Aion and the comedy group Kuaishou Mazha held a launch ceremony for the AION V Plus in Chengdu. The pure electric SUV AION V Plus is priced at 172,600-239,600 yuan. In addition to many highlights such as the maximum NEDC range of 702km, 5-minute charging for 112km of additional range, long-distance call-up parking, and NDA intelligent navigation assistance driving, GAC Aion officially launched the AION Care+ service, promising to provide consumers with a two-year sevenfold residual value repurchase service.

AION Care+ is reminiscent of Apple’s AppleCare+. If you purchase AppleCare+, you can enjoy two low-cost repair opportunities within one year, and can replace a new machine for free when the battery capacity is < 80%. AppleCare+ service can solve the problem of high mobile phone repair costs after accidental screen breakage or water ingress, which is the consumer pain point in the consumer electronics field.

Although the specific service items are different, the two Care+ services solve the core consumer pain points in their respective fields.

However, one year’s discount of 30% and three years’ discount of 50% is the general second-hand car transaction level for electric vehicles. Is AION Care+’s promise of two years’ sevenfold discount too impulsive?

Looking back at GAC Aion’s recent performance, it first solved the problem of battery safety with the magazine battery system safety technology, and then launched the ultra-fast charging technology and A480 supercharging pile to meet users’ rapid energy replenishment needs. It is reported that the 1000km Sponge Silicon Negative Electrode Battery technology will also be launched later to solve the range anxiety. This promise of repurchasing for residual value is believed to also be a thoughtful move, without taking any chances.

From the perspective of the industry, AION Care+ service directly targets the final pain point of electric vehicles. If it can lead the industry to work together, electric vehicles will be more popular faster.

More honest and trustworthy than AppleCare+.## Is AION Care+ Worth buying compared to AppleCare+?

If you are a laid-back person, it is quite cost-effective to buy AppleCare+. If you are a trendsetter who changes to a new machine every year, you can still upgrade and buy the next iPhone at half price by buying AppleCare+.

So, is AION Care+ worth buying compared to AppleCare+?

Some warranty services of AppleCare+ are free in the automotive industry, such as the whole vehicle warranty and the three-electricity warranty.

What can be compared is the deduction or buyback service.

In terms of the value-preservation project, AION Care+ serves the pain points of low residual value rate for new energy vehicles. Whether it is research institution data, consumer complaints on social media platforms, or discussions in public opinion fields, the residual value rate of electric vehicles has always been a headache problem.

Overall, a 30% discount for one year and a 50% discount for three years may only be standard data for excellent electric vehicles. Because in the data of research institutions, only a few models can achieve this level of residual value rate, and in more cases, the residual value rate is as low as 50% for the first year.

The promised two-year, 30% discount buyback service of AION Care+ is higher than the residual value rate of excellent models in research institution data, and even higher than the residual value rate of fossil fuel vehicles.

The deduction clause of AppleCare+ only has a residual value of 50% for one year, which is not much better than the market average level, and this 50% residual value can only be used for deduction. Therefore, AION Care+ is more honest than AppleCare+.

If comparing the buyback and value-preservation services of other automakers horizontally, is AION Care+ cost-effective?

Real buyback, no tricks

Many people appreciate the service experience of AppleCare+, saying that they really replace the new machine.

Consumers are worried about whether AION Care+ can provide a service experience benchmarking AppleCare+ and whether there will be any tricks.

Guangqi Aion makes the following promises on AION Care+:

First, buy back at 70% of the official guide price.

Second, manufacturer supplements the buyback price.

Third, manufacturer covers all testing costs.

The service experience commitment made by Guangqi Aion on AION Care+ breaks the unwritten rules of the automotive industry.## Markdown Text

Throughout the history of car marketing, buy-back guarantees have always been a common tactic. In promoting their cars, manufacturers emphasize their high residual value rates. However, once consumers purchase a car and reach the point where they are exercising their rights, manufacturers are full of tricks and excuses. Some of these tactics include buying back cars at invoice prices instead of guide prices, basing the buy-back price on evaluation prices that are significantly lower than the average price for used cars, charging consumers high inspection fees during the buy-back process, taking a very long time to repay the buy-back price, and restricting the use of the buy-back price to purchasing new cars of the same brand.

AION Care + offers four commitments that allow consumers to avoid these tricks. This is equivalent to GAC Aion’s safety net for the residual value of consumers’ used cars.

In customer service, GAC Aion will also provide a lazy-style service, in which the manufacturer handles the entire process on behalf of the consumer, without the hassle of complicated procedures for used car transactions.

Therefore, in terms of service experience, AION Care + can fully compare to the level of service provided by Apple Care +.

But AppleCare + is expensive, so is AION Care + also expensive?

From September to October 2021, there is a limited-time discount of 4,000 yuan for AION Care +, making its discounted price 1,999 yuan.

After the promotion period, AION Care + at its original price is still worth purchasing. If the average selling price for GAC Aion’s AION series vehicles is over 150,000 yuan, and the residual value rate varies by 10%, then the depreciation amount will be more than 15,000 yuan. Compared to this, buying AION Care + at its original price is not expensive.

Have the confidence to buy back

From a consumer’s perspective, it seems that AION Care + is a bit too focused on catering to consumers, which inevitably raises concerns about whether this service is just a gimmick to sell cars.

After all, the buy-back will occur two years later, and does the manufacturer have the ability to follow through with this service?

To answer these questions, we can take a different perspective: is an AION Care + buy-back car easy to sell in the used car market?

If AION Care + buy-back cars can be popular in the used car market, then GAC Aion naturally has the motivation to do this.

So, what are the conditions for a used car to sell well? Reliable quality, outstanding product performance, and reliable financial support.

If the product quality is not solid and its performance is not exceptional, then it will naturally not be popular in the used car market, and its residual value rate will not be high. The promised price difference compensation service will ultimately become a money pit that drains the company’s funds, and in serious cases, it will lead to an operating crisis for the company.

From this perspective, GAC Aion’s willingness to launch the AION Care + residual value buy-back service is a testament to the company’s confidence in its own product quality and characteristics, and it is also a way to demonstrate the company’s strength to its consumers. A good example of this is that over the past few years, Aion brand models have withstood the test in the B-side ride-hailing market, winning widespread praise from B-side users with their solid product quality.Power battery is an important component affecting the retention rate of electric vehicles, and without reliable power battery safety, the retention rate of second-hand cars is impossible to talk about. Several models recalled by the State Administration for Market Regulation have a dismal retention rate for second-hand cars, proving that consumers have a veto power over the safety of power batteries.

The magazine-type battery launched by GAC Aion is at the industry’s leading level in terms of safety, as evidenced by a nail-piercing test of its power battery. Two to three years later, the safety of these vehicles will be further tested, which will convince consumers that the resale value of second-hand cars will not be low.

In terms of product performance, GAC Aion’s electric vehicles are all based on the pure electric vehicle platform GEP 2.0, which has better collision safety. Therefore, even vehicles with accidents can have a good retention rate in second-hand car evaluations.

In terms of the three-electric technology, AION series models of GAC Aion rank high in terms of acceleration level and energy consumption level. The range of the whole series of models is more than 500 kilometers, leading the industry. In terms of intelligence, the ADiGO system supports continuous voice interaction, vehicle network, L2 + intelligent assisted driving and other cutting-edge functions.

These product features enable new cars purchased this year to still be competitive products in the market after two years.

Finally, GAC Aion’s enterprise scale, with Guangzhou Automobile Group, a Fortune 500 company, is not something consumers need to worry about when purchasing AION Care + services, as they can enjoy the same level of service as Apple Care +.

Many car companies dare to repurchase their vehicles, but few of them have the strength and honesty to do so. GAC Aion is a special case.

AION CARE + Services may change the rules of the industry

Apple is one of the beneficiaries of AppleCare +, which allows iPhone users to upgrade and replace their phones within the Apple system.

Similarly, GAC Aion will also be a beneficiary of AION Care +.

From an individual perspective, consumers who purchase AION Care + are undoubtedly beneficiaries, and GAC Aion provides retention rate protection. From a group perspective, AION Care + services provide an excellent user experience, which also helps GAC Aion retain users.

Electric vehicles are different from traditional vehicles, with a fast iteration and update speed.

The key parameter of electric vehicles, range, has increased at a rate of almost 100 kilometers per year from 150 kilometers in 2015, with 700-kilometer models already on the market in 2021. The same car priced at 200,000 yuan could only buy a 400-kilometer model two years ago, while this year, a 600-kilometer model is available.In terms of intelligence, electric vehicles upgrade at a faster rate. It only took three years for electric vehicles to support touchscreen operation, voice interaction, and continuous voice interaction, with the rapid iteration and upgrade of car machine system software and hardware.

Assisted driving functions are undergoing earth-shaking changes, with chip computing power following Moore’s Law, doubling every year and a half. The upgrade frequency of assisted driving software far exceeds that of hardware, with updates every six months becoming a new norm in the automotive industry.

This means that consumers not only have to bear the same depreciation costs as fuel vehicles but also the additional technology depreciation costs.

Seeing this phenomenon, GAC Aion introduced the AION Care+ service, which shares the depreciation costs with consumers and gains user loyalty in the process, which is a smart move.

Consumers can also enjoy the same common and new services as their mobile phones under the protection of AION Care+ service, timely driving the latest and best intelligent electric vehicles.

GAC Aion Care+ is a win-win service for consumers and automakers, which can serve as a benchmark for leading the industry’s development. When more automakers introduce similar Care+ services in the future, the advantages of intelligent electric vehicles over fuel vehicles will become more apparent, and the weak points will be basically made up for. This will accelerate the electrification and intelligence of transportation and replace fuel vehicles more quickly.

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.