Source: Caixin.
Author: Tang Zhixiao

With the intensification of the new round of government's car replacement policy, the auto market has entered the traditional peak sales season known as the "Golden September and Silver October". Some car companies choose to "downgrade" high-level intelligent driving configurations, while others choose to rely on subsidy incentives in order to achieve sales growth in the fourth quarter.

Reporters from the "Science and Technology Innovation Board Daily" visited multiple offline stores of new energy vehicle brands and found that the number of customers in the stores has increased due to the availability of models with intelligent driving features at lower price points. Salespeople mentioned that customers who purchase 0.15 million-level models also compare the differences in intelligent driving solutions among multiple car models. In addition to "price reductions and added features," most car companies attract customers to their stores and increase sales through price reductions and subsidies.

Data shows that the retail penetration rate of new energy vehicles in August has once again increased to 53.9%, an increase of 16.6 percentage points compared to the 37.3% penetration rate in the same period last year. The monthly retail sales volume of new energy vehicles has exceeded one million units for the first time this year, reaching 1.027 million units, a year-on-year increase of 43.2% and a month-on-month increase of 17.0%. From January to August 2024, the retail sales of new energy vehicles reached 6.016 million units, a year-on-year increase of 35.3%.

Lowering the price of high-level intelligent driving features has driven sales growth.

A salesperson at a new energy automobile dealership in Shenzhen stated that the recently launched model, Xpeng MONA M03, has lowered the price of its high-end intelligent driving configuration to below 0.15 million, attracting many new orders. "Many users who choose the revised MONA M03 are mainly attracted to its intelligent driving system."

Currently, in the price range of around 0.15 million yuan, the intelligent driving feature has a significant impact on consumer decision-making. Recently, several car manufacturers including Xpeng, Baojun, and Changan Chery have released multiple models with high-end intelligent driving features in cars priced below 0.2 million yuan, resulting in an increase in orders. Previously, the head of DJI Automotive, Shen Shaojie, publicly stated that the high-end intelligent driving configuration of new energy vehicles priced above 0.3 million yuan is already very high, and the sum of the high-end + low-end (smart assisted driving installation rate) is close to 100%.

According to official information from Xpeng, within 24 hours of the launch of MONA M03, the number of pre-orders exceeded 10,000 units. Subsequently, on August 30th, Xpeng officially announced that the number of pre-orders for MONA M03 exceeded 30,000 units within 48 hours. Reporters from the Science and Technology Innovation Board Daily visited Xpeng's frontline stores, and a salesperson told them, "When MONA M03 was first launched, customers only needed to wait 1-2 weeks for delivery after placing an order, but now the delivery time has been extended to 4-7 weeks."

Another typical example is the compact SUV released by Baojun, which has a starting price of around 0.12 million yuan. It uses the Lingmou intelligent driving 2.0 Max solution provided by Zuoyu Technology (formerly DJI Automotive). With the "end-to-end model" support, it also features support for the City Memory Navigation Assistance and High-Speed Intelligent Navigation Assistance. It also highlights its high-end intelligent driving. A salesperson at a Wuling Baojun dealership told reporters, "Most customers who come to the dealership to look at cars are interested in the high-end intelligent driving of 0.15 million yuan level vehicles, and they will compare it with Changan Chery and Xpeng MONA."

According to reporters from Deep Blue dealerships, the Changan Chery S07 is a model that can be equipped with the Huawei HiCar Intelligent SE intelligent driving system. After the optional configuration, it is priced at around 0.18 million yuan, making it the lowest-priced model currently equipped with the Huawei intelligent driving system. Sales at Deep Blue offline stores stated that the pricing of models with the Huawei intelligent driving version has been lowered by 10,000 yuan compared to before, and the high-end intelligent driving functionality, which was previously free for six months, is now upgraded to the free version of Huawei HiCar Intelligent ADS SE. "The asking price for the M7 Pro version with the HiCar high-end intelligent driving system is over 0.25 million yuan, while the Deep Blue S07 is now selling for less than 0.2 million yuan. If you have a vehicle that needs to be scrapped or replaced, combined with various subsidies and discounts, the price can be even lower."

Regarding the current automotive consumption situation, Yuan Bo, Vice President of Zebra Intelligent Travel, stated at the China Electric Vehicle Hundred People's Forum, "According to the 2023 market price distribution chart, over a quarter of the vehicles are priced between 0.1 million and 0.15 million yuan, and over 65% of the vehicles are priced below 0.2 million yuan. In addition, the data in the past three years has been very stable. I believe that the market below 0.2 million yuan will be the focus of everyone's efforts and competition in the next two to three years, and it will also be the price range for "affordable" intelligent cars."

Local governments have implemented replacement subsidies, and automakers are following suit.

According to incomplete statistics from reporters at the Sci-Tech Innovation Board Daily, more than 15 provinces and cities including Beijing, Guangzhou, Tianjin, Shenzhen, Foshan, Chongqing, Anhui, Zhejiang, Shanxi, Hubei, Hunan, Qinghai, Heilongjiang, Shandong, and Jiangxi have recently issued the latest "trade-in" policies for automobiles, with the maximum subsidy per vehicle reaching 0.02 million yuan. Compared with the scrapping and trade-in subsidy standards implemented in the first half of the year, this policy provides even greater benefits.

On the basis of local subsidies, the brands have introduced their own manufacturer replacement subsidies: SAIC Group's Roewe and Feifan have announced investment of over 0.55 billion yuan to subsidize multiple models such as Roewe D7 EV and Feifan R7. Consumers can receive an additional 3,000 yuan in car purchase vouchers on top of the vehicle's fill price, etc.; Polestar has launched a limited-time offer. Before December 31, purchases of the Polestar 4 can enjoy a limited-time offer, with a maximum subsidy of up to 0.085 million yuan, including a limited-time brand subsidy of 0.065 million yuan, a national scrappage subsidy of 0.02 million yuan or local replacement subsidy, and a maximum limited-time optional equipment subsidy of 0.05 million yuan, as well as a limited-time 0 down payment 0-interest finance plan.

Reporters visited several dealers in the Shenzhen area and found that the specific subsidies offered by each dealer varied. For example, a GAC Aian dealer in Baoan District, Shenzhen, provides a base subsidy of 5,000 yuan for the district, and additional replacement subsidies ranging from 3,000 yuan to 0.01 million yuan; an SAIC Roewe dealer offers a 0.01 million yuan discount for the new Roewe D5X DMH, as well as an additional cash subsidy of up to 30,000 yuan. Some dealers told reporters: "The scrappage subsidy combined with in-store promotional activities has attracted many budget-limited customers with the intention of purchasing a car. More than half of the customers who visit the store purchase new energy vehicle models through replacement."

"In August, the terminal sales of new energy vehicles showed a 'not-so-off-season' trend, making huge contributions to the increase in new energy vehicle consumption." Cui Dongshu, the secretary-general of the China Passenger Car Association, believes that as the scrappage renewal policy gains further momentum and local 'trade-in' policies are successively introduced, the national call to stop overconsumption has begun to stabilize terminal prices. Consumer wait-and-see sentiment has further eased, and the overall car market has shown signs of recovery.

Editor/Jeffy