Author: Xiè Rǔxīn
In the past, we were accustomed to cars becoming cheaper and cheaper as time went by. Discounts for newly launched cars would gradually increase after one or two years. However, the pandemic has changed this trend. Recently, friends who are looking to buy a car may have noticed that major car brands have either reduced their discounts, significantly lengthened the waiting time or even increased the prices, making it difficult to find a car.
In the field of new energy vehicles, with the dual impact of the sharp increase in raw material prices and the gradual reduction of national subsidies, an increase in car prices is inevitable. On February 1st of this year, which was also the first day of the Lunar New Year, BYD announced an immediate adjustment to the official guide prices for the relevant new energy vehicle models on Wangchao and Haiyang websites. The price increase for some models reached as high as 7,000 yuan.
Specifically, after the adjustment, the selling price of the Han DM ranges from 227,600-247,600 yuan, and the selling price of the Han EV ranges from 226,100-295,800 yuan, both increasing by 5,000 yuan. The selling price of the Song PLUS DM-i has increased by 3,000 yuan to 149,800-202,800 yuan. The selling price of the Song PLUS EV has increased by 5,000 yuan to 174,800-191,800 yuan. The selling price of the Song Pro DM-i has increased by 1,000 yuan to 135,800-160,800 yuan. The selling price of the Qin PLUS DM-i has increased by 3,000 yuan to 113,600-153,600 yuan, and that of Qin PLUS EV has increased by 3,000 yuan to 145,200-182,200 yuan. After the adjustment, the selling price of the Tang DM-i ranges from 192,800-219,800 yuan (after subsidies), and that of Tang DM ranges from 239,800-289,800 yuan (after subsidies), both increasing by 3,000 yuan. The Dolphin’s selling price has increased by 3,000 yuan to 96,800-124,800 yuan. The selling price of the Yuan Pro has increased by 7,000 yuan to 94,900-118,100 yuan.The magnitude of the price increase of BYD’s new energy vehicles this time is not too large, but it also reflects the pressure that exists on the supply side. At the beginning of the national new energy subsidy reduction, most car companies had the ability to help consumers “hold the line” and maintain stable vehicle prices. Now, they are surrendering one after another. In January of this year, XPeng had already raised the selling price, with most models rising by 4 to 5 thousand yuan. At the end of last year, Tesla also raised its prices by 10,000 to 20,000 yuan for some models. In addition, Polestar and Leapmotor also increased their prices accordingly.
In addition to the rising costs leading to necessary price hikes, car companies’ expectations for consumers are also a key factor. If the cars are not selling well, car companies may give consumers discounts, raise prices less, or even not at all. But if the cars are selling well, car companies have no obligation to bear the increasing costs alone. Tesla has always been the most resolute, unafraid of price reductions or criticisms from old car owners, and seemingly adjusting prices at will. After years of operation, sales and reputation, WmAuto, XPeng, and Li Auto are also quite confident in raising prices.
But considering sales figures, BYD is the carmaker with the greatest confidence in raising prices. According to data released by the China Passenger Car Association, the sales of new energy vehicles in China reached 2.989 million vehicles from January to December 2021. BYD ranked first with a total sales volume of 593,745 vehicles, selling 120,000 more vehicles than the second-place Tesla. Additionally, BYD’s new energy vehicle lineup is balanced, with sales of 320,000 pure EVs and 270,000 DM hybrids, with little difference in sales between the two. Both children can fight well. This year, BYD will also introduce the Han DM-i and the new Tang DM-i, and it is expected that the proportion of DM models in sales will further increase.
Ignoring the small price hike this time, BYD’s new energy vehicles were actually quite expensive to begin with. In about 10 years, BYD’s average unit price has increased by nearly 2.5 times. According to data monitored by Wilson, the average unit price for BYD from January to July 2021 was 151,800 yuan, exceeding Volkswagen’s 147,800 yuan, and this gap is gradually widening. Do you find it unbelievable? But on second thought, it’s not surprising. Previously, people’s impression of BYD was the F0, F3 and other economical small cars. Nowadays, when it comes to BYD, it’s the Han, Tang and other mid-to-high-end new energy models. It can be seen that many models of BYD have already firmly established themselves in the 200,000 to 300,000 yuan market, and flagship models have long surpassed the 300,000 yuan price range.
Why can BYD’s new energy models achieve both high prices and hot sales? It is precisely because of the continuous improvement in technology and brand value. Technical products such as blade batteries and DM-i hybrids have been well-known to everyone, and their safety, energy-saving and other characteristics are highly praised by everyone. Consumers want to see results. In the past, the new energy vehicles of our domestic brands were not outstanding enough, and people preferred hybrids from Toyota. Now, a large number of models with power experience and fuel-saving effects that can compete with Toyota have emerged in the market, and everyone has made their choices with their wallets.
In Zhang Yimou’s sharing of the opening ceremony of this Winter Olympics, he mentioned that the concept of this year’s Beijing Winter Olympics opening ceremony is very different from that of the 2008 Olympic Games. We have more cultural confidence now and no longer rush to show the Chinese nation’s brilliant history of five thousand years, but instead use Chinese people’s romance to show that the Chinese people and everyone in the world are so sincere, so kind, and so beautiful.
Similarly, in the process of buying a car, we have also experienced a process from blindly admiring foreign products to more and more people supporting domestic brands. When we are more confident in our national brands, the advantages that these brands better understand Chinese people will be further demonstrated.
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.