At the end of the year, the decline of the national new energy vehicle subsidy (referred to as "national subsidy") has also entered the final window period.

Time-limited price protection and lock-up discount have become a routine operation for most car companies to attract consumers. Recently, a reporter from Securities Times e Company visited a number of directly operated stores of new energy vehicles in Shanghai, and some manufacturers played the words "national subsidy countdown to the slope" in front of the store, offering a combination of marketing punches such as welcoming new students and giving gifts in the New year, and the wind of promotion at the end of the year became more and more intense.

In addition, the reporter learned that the state subsidy exit is approaching, and some car companies are already planning to raise prices. "We have issued a notice internally that from January 1 next year, the price of all models will be raised. An employee of a new energy car company told the Securities Times e Company that the price increase is expected to range from 4000 yuan to 8000 yuan.

Cui Dongshu, secretary-general of the National passenger car Market Information Association, told reporters that with BYD taking the lead in announcing a price increase, a small number of other new energy vehicle manufacturers may follow suit, affected by the decline of subsidies, and at the beginning of next year, mainstream car companies will have a price rise by a small margin.

Corresponding to the price increase is the price reduction action represented by Tesla, Inc.. Whether to increase or reduce prices, how can car companies strike a balance between sales and profits? Industry insiders interviewed believe that the sales promotion of new energy vehicle companies at the end of the year has a small overdraft for sales in the first quarter of next year, but the impact on the industry as a whole is limited. Under the background of national subsidy and retrogression, enterprises that lack product power will fall into a "dilemma", competition in the new energy vehicle market will intensify, and automobile enterprises will meet the challenges of cost reduction, efficiency and technological innovation.

The store opens the sprint mode of grabbing orders.

"now is the peak sales period, individual configurations are available, you can decide now, first lock the price. BYD Shanghai store staff told reporters that the current store accumulation of more orders, the price depends on the time of the order.

According to BYD's previous price increase forecast, the official guidance prices of its dynasty, ocean and momentum new energy models will be adjusted, ranging from 2000 yuan to 6000 yuan. Customers who pay a deposit before January 1, 2023 will not be affected by the price adjustment.

During the visit, the reporter found that "subsidy back slope" is a high-frequency word used by various manufacturers in propaganda, and some stores even hang posters with the words "new energy subsidy countdown" at the door, updating the countdown days every day. A GAC Ean store in Shanghai even made a calendar to mark important dates in red to remind consumers of the time to buy a car.

"from the 20th to the 21st of this month, most banks will begin to stop lending, and friends who buy cars with loans should hurry up. When the subsidy ends on the 31st, there is no need for me to say more. According to GAC Ean sales, as production capacity shrinks in the second half of the year, the car booking cycle will be lengthened. If you buy a car in January, you may not be able to sign up until after the Spring Festival. Similarly, SAIC-Volkswagen stores also launched the "countdown" slogan, store staff said that the replacement of pure electricity ID series has a subsidy of 10, 000 yuan, the deadline is also December 31.

In terms of promotion efforts, in addition to time-limited price protection, a number of stores also launched New year's activities, riveting enough efforts to "grab orders."

"this should be the biggest week of discounts. The staff of Tesla, Inc. 's direct store calculated an account for the reporter that the subsidy was about to expire, and the cumulative amount of car purchases could be saved by up to 34000 yuan: 11088 yuan for new energy state subsidies, 10,000 yuan for oil-for-electricity replacement subsidies in Shanghai, 4000 yuan for Tesla, Inc. 's time-limited insurance subsidies, and 6000 yuan for Tesla, Inc. 's limited-time car benefits.

In addition, consumers who buy cars in Shanghai through official channels and register and register in Shanghai will receive a New year's gift of 3000 yuan, which will be registered and distributed according to the order of pick-up, with a limit of 3500 people.

Coincidentally, the world also announced at the end of November that it would provide an additional 10,000 national subsidies for the purchase of new energy vehicles in 2022. "now the rights and interests policy of limited time increment maintenance gift and brand anniversary celebration. The staff of the store said that there will be more activities at the end of the year, hoping to catch up on a wave of sales before the national subsidy is terminated.

"since the optimization of the epidemic prevention policy, the number of customers arriving has improved to a certain extent. In the recent week, there are relatively few customers arriving at the store, and we will provide online consulting services for those customers who are inconvenient to come to the store. The reporter noted that recently, the moments of the sales of new energy vehicles have been updated more frequently, mostly with the theme of "national subsidy and retreat", and at the same time distribute promotional posters of the amount of subsidies.

"G3, P5 and P7 have a small amount of existing car resources, which can be booked at the end of the month. A XPeng Inc. salesman repeatedly mentioned the car pick-up policy on WeChat moments: orders for deposit payment completed before 24:00 on December 31 will be entitled to 2022 national new energy subsidies, and the subsidy difference caused by the licensing time will be borne by XPeng Inc.. Another NIO Inc. 's sales update late last night: "the last 10 days, lock 2022 million national subsidy."

A number of models are planning to increase their prices.

A subtle point is that although there are many car companies playing the "time-limited insurance" brand, at present, only companies such as BYD will raise prices after Guanxuanguo retreats the slope. And those who have cut prices several times like Tesla, Inc. are in the minority.

"in fact, we issued a notice at the end of November. Starting from January 1 next year, the prices of related models will be adjusted, with an expected increase of 4000 yuan to 8000 yuan. The price adjustment notice for specific models will be announced separately. A person related to an independent-brand car company told the Securities Times e Company that the price increase is "on the line", but the decision on price adjustment still has an observation period. "during this period of time, we will only point out the factors that may increase prices when consumers buy cars, and at the same time, we will also see how the prices of other car companies will adjust. The above-mentioned person said.

Judging from the reasons for the price increase, the above-mentioned car companies also attributed the new round of price adjustment to "vehicles licensed from January 1, 2023 will no longer enjoy new energy subsidies" and "prices of major raw materials have risen sharply since the second half of the year". Similar expressions also appeared in the price increase notices of BYD and GAC Ean.

People from car companies, who spoke on condition of anonymity, told reporters that to a certain extent, Tesla, Inc. 's price reduction and promotion restricted the price increase actions of other car companies. "if you are not sure enough to compete in the wrong position with Tesla, Inc. and BYD, time-limited price protection is a safer marketing means. "

However, most of the industry insiders interviewed believe that the price rise of new energy vehicles next year is still a high probability event. Cui Dongshu analyzed to reporters that there is unlikely to be a wave of large-scale price cuts at the end of this year, affected by subsidies, and early next year, mainstream car companies will have a wave of price increases. After the withdrawal of the state subsidy, if the car enterprises raise the price after reducing the price, they will be in a passive position, which is not conducive to the development of sales.

Zhang Xiang, director of the New Energy vehicle Technology Research Institute of Jiangxi New Energy Science and Technology Vocational College, also believes that there will be a price rise in new energy vehicle companies early next year, directly due to the withdrawal of state subsidies. Zhang Xiang analyzed to reporters that the price increases of car companies are generally inseparable from the reasons for rising costs such as raw materials and battery prices, but in fact, the root of price adjustment lies in the contradiction between supply and demand.

Tesla, Inc. has also raised prices before, and this price reduction, first, its profits are currently the highest in the industry, and there is room for price reduction, and second, Tesla, Inc. 's Shanghai factory production capacity has gone up, hoping to further increase sales and market share through price reduction. "for BYD's price increase, Zhang Xiang believes that with the adjustment of supply and demand, BYD can match the new price with the new brand value through price increase.

Seesaw of sales and profit

The knock-on effect of state subsidy and recession on new energy vehicle enterprises is still continuing. Whether or not to increase prices, more or less, most enterprises will look for the optimal solution between sales and profits.

Cui Dongshu told reporters that under the background of national subsidy and retrogression, many car companies have launched activities such as time-limited price protection and order locking concessions. This marketing means is very good to stimulate terminal consumption and is helpful for consumers to place orders in a timely manner and lock in sales in the first quarter of next year.

Yan Jinghui, member of the expert committee of the China Automobile Circulation Association, believes that most consumers who have car purchase plans at the end of this year or the first half of next year will seize the last wave of dividends before the state subsidy recedes, and the demand of these consumers will be released ahead of schedule. Although the prices of some models may rise next year, this year's volume will not have a serious impact on next year's sales. "he said.

According to the current national subsidy policy for new energy vehicles in 2022, the subsidy for pure electric vehicles is up to 12600 yuan, and that for plug-in hybrid models is 4800 yuan. This means that after the withdrawal of state subsidies, this part of the difference will be borne by car companies and consumers. As for the proportion of the amount borne by both sides, different car companies will also have different choices. At present, the increase of some models of BYD ranges from 2000 yuan to 6000 yuan, while the price adjustment of GAC Ean ranges from 3000 yuan to 8000 yuan. The specific rate of increase for different models has yet to be further announced.

"if you don't raise the price, you will die, and the price increase may die even faster. Reese Strategic Positioning Consulting Global CEO Zhang Yun described the dilemma that some auto companies may face. Zhang Yun told reporters that for some enterprises whose strength is not strong enough, the price increase will make it more difficult to sell the car, and if the price is not raised, the enterprise will lose profits.

Zhang Xiang believes that the main consideration of price adjustment is the relationship between supply and demand. "even if many cars lose money, they do not dare to raise prices." He pointed out that for first-tier brands, it has the strength to increase prices, for second-tier and third-tier brands, price increases are not strong enough.

Like the two ends of the seesaw, sales and profits are constantly playing a game, trying not to be out of balance. CITIC a research report pointed out that the impact of subsidies on the profits of car companies is objective, but not a major factor, the greatest impact on car companies is still whether their own sales can meet the growth expectations. From a dynamic point of view, car companies will also achieve a better balance between volume and profit by appropriately raising the price and optimizing the sales structure.

Reshuffle the competition pattern again

Although the impact of state subsidies on enterprises can not be ignored, the other side of the coin is that in recent years, the proportion of subsidies in bicycle prices has gradually declined. In other words, the dependence of new energy vehicles on state subsidies is decreasing, gradually changing from "policy-driven" to "market-driven".

According to data disclosed by the Ministry of Industry and Information Technology, the proportion of new energy vehicles receiving state subsidies from 2017 to 2021 is decreasing year by year, from 78 per cent in 2017 to 63 per cent in 2020 and to 47 per cent in 2021.

Cui Dongshu said that although new energy subsidies are facing withdrawal, the comprehensive consumption environment system formed by the development of new energy vehicles will still lay a good environmental foundation for the development of new energy vehicles, and China's new energy vehicles will continue to grow at a high rate in the future.

For the growth of the new energy vehicle market next year, the industry also gives a more optimistic expectation. The China Automobile Association predicts that total car sales in China will be 26.8 million in 2022, an increase of 2 percent over the same period last year, of which 6.7 million are new energy vehicles, an increase of 90.3 percent over the same period last year. Total car sales in 2023 were 27.6 million, up 3% from the same period last year, of which 9 million were new energy vehicles, up 35% from the same period last year.

Shi Jianhua, secretary general of the China Association of Automobile Manufacturers, believes that the development of China's new energy vehicle industry has begun to enter a new market-oriented stage focusing on meeting consumer demand, and the withdrawal of state subsidies has a limited impact on the growth of the new energy vehicle market.

Entering 2023, after the national subsidy leaves, the time will come to compare the real skills of new energy car companies. The decline of subsidies means that enterprises have to ask for more profits from the market and recognition from consumers. When the profit margin is virtually reduced, how to reduce the cost and increase efficiency, and how to change the policy of protecting the price, all test the hard strength of the car companies.

Due to the low price sensitivity of high-end car owners, subsidized slope reduction has little impact on high-end models, and has a greater impact on mid-end pure electric models. Some analysts told reporters that although the price of lithium carbonate has fallen, it remains high. Due to the pressure on the cost side of the car companies, the subsidy decline may be shared by consumers and car companies. "one of the themes of the new energy vehicle industry next year will be cost reduction and new technology. The above analysts said that to deal with the decline of state subsidies, car companies also need to make efforts to reduce costs, and next year, some car companies will not rule out the possibility of simple configuration or withdrawal of terminal preferential policies.

The Caitong Securities Research report believes that differences in product profitability may lead car companies to choose different impulse strategies, and companies with stronger profitability may be better able to cope with terminal price changes; at the same time, the strength of products may determine the cost transmission capacity of car companies, and companies with strong product power can partly transmit the price pressure caused by rising costs and subsidies by raising prices.

"under all kinds of promotions, some consumers remain on the sidelines. We are more concerned about the pulling role of domestic demand than the cost of taking off and landing. "in addition to the pressure on the cost side, there are new energy car dealers who have revealed to reporters their concerns about terminal consumption.

CITIC research newspaper pointed out that leading independent car companies will achieve rapid growth in sales of new energy vehicles by virtue of their own product definition capabilities and stable supply chain capabilities, and dilute costs by relying on economies of scale; car companies can achieve higher profit flexibility by strengthening their say in the upstream and downstream of the supply chain, reducing costs and increasing efficiency, which is expected to offset the impact of subsidies.