According to a research report by BOCOM International, the passenger vehicle industry has first recommended BYD (01211/Buy). With BYD's new car models DM-i 5.0 BYD Qin LDM-i and the Sea Lion 06 DM-i going on sale, the bank believes that they will further squeeze the living space of gasoline vehicles below RMB 200,000. Moreover, the recent application catalog of the Ministry of Industry and Information Technology revealed that BYD will soon launch three new car models: Song LDM-i, Sea Lion 05 DM-i and Sea Lion 07 DM-i. Among them, the Song is one of BYD's best-selling models (with a monthly sales volume of 25,000-30,000), and will have a significant impact on existing opponents in the ~150,000 yuan price range. In addition, the bank believes that the sales cycle of DM5.0 technology will continue until the middle of next year, and sales are expected to continue to improve.

The main points of the report are as follows:

In June, the retail sales of new energy passenger cars are estimated to be 860,000, a month-on-month increase of 6.9%.

According to the latest data from China Passenger Car Association, the retail sales of narrow-definition passenger cars this month was about 1.75 million units, a year-on-year decrease of 7.6%, a month-on-month increase of 2.3%, the retail sales of new energy passenger cars are estimated to be 860,000 units, a month-on-month increase of 6.9% and a year-on-year increase of 32.7%, the penetration rate is expected to increase to 49.1%. During the "618" shopping festival, many car companies launched a series of promotions centered around limited-time discounts and trade-in subsidies. According to the latest market research data from CPCA, the comprehensive discount rate for the auto market in mid-June has reached 23.2%, which is further deepening compared to the same period last month (22.2%). However, despite the continued price reductions, the overall sales volume has not shown a significant increase as expected, and consumer wait-and-see sentiment remains strong. In contrast, the new energy vehicle market, benefiting from the launch of new models and further price reductions, still maintains a stable growth momentum. The bank expects that the market share of new energy vehicles will reach a new historical high, and the penetration rate is expected to continue to set new records.

The decline of gasoline vehicles is irreversible, and it is expected that new energy vehicles will accelerate the capture of gasoline vehicle market share in the second half of the year.

Last month, the retail sales of gasoline vehicles were 910,000 units, a year-on-year decrease of 23%, and the decline has been over 20% for two consecutive months. Japanese brands such as Honda China sold a total of 66,202 vehicles in May, a year-on-year decrease of 34.66%, and a cumulative sales volume from January to May decreased by 16.7% year-on-year. The bank expects that the decline of gasoline vehicles is irreversible, and gasoline vehicle sales in June will still record a greater decline. In addition to joint ventures, luxury brands have also recorded large declines this year, with discount rates continuing to expand. In May, retail market share of German/Japanese/American brands all decreased by 2-3 percentage points year on year, while the retail market share of domestic brands on the mainland was 57.6%, a year-on-year increase of 7.3 percentage points. With the release and delivery of more new domestic brand car models in the second half of the year, the bank predicts that domestic brand retail market share is expected to surpass 60%. The bank believes that BYD Song, Ledyard L60 and Xiaopeng MONAM03 will attract more market attention among the new car releases in the second half of the year.