On July 1, Tesla China announced on Weibo that it would launch a limited-time preferential policy for car purchases, launching a number of discounts such as "5 years and 0 interest" for the main models Model 3 and Model Y and low-interest car purchases, which can save more than 20,000 yuan in interest compared with the standard annual rate of 2.5%, and the activity ends on July 31.
According to statistics, the trend of price reduction in the automotive industry has eased since May. Tesla no longer directly cuts prices this time, but cuts prices in disguise in the form of "5 years and 0 interest", which may also be a reflection of the cooling of the auto price war.
Tesla's sales are under pressure, and then the discount is a big move
According to Tesla's official Weibo, in July, consumers will be provided with "triple benefits" for car purchases: first, for the Model 3/Y standard endurance version, a maximum of 5 years of 0 interest and low interest preferential car purchase policies will be launched, with a minimum daily payment of 85 yuan; Second, for the Model 3/Y long-range all-wheel drive version, a preferential policy of up to 5 years of 0 interest and low interest will be introduced, with a minimum daily payment of 107 yuan; Third, the annual interest rate for a limited time in July will be reduced to 0.5% (equivalent to an annualized interest rate of 0.93%).
It is understood that in this preferential activity, the down payment of 79,900 yuan can choose the "5 years and 0 interest" plan: the minimum daily payment of the Model 3 rear-wheel drive version is 85 yuan, and the minimum daily payment of the long-range all-wheel drive version is 107 yuan; The daily supply of the Model Y rear-wheel drive version is as low as 95 yuan, and the daily supply of the long-range all-wheel drive version is as low as 118 yuan. Compared with the previous standard annual rate of 2.5%, the Model Y can save up to more than 26,000 yuan in interest.
At present, Tesla has formed a competitive strategy of "promoting volume with price reduction" in the Chinese market. In the first quarter of 2024, Tesla's retail sales in China were 132,400 units, down 3.64% year-on-year. Subsequently, in April, Tesla launched a large-scale price cut, reducing the price of all Model 3/Y/S/X models by 14,000 yuan. At the same time, the "zero down payment" or "zero interest for a limited time" policy has been introduced for select models of Model Y.
However, the price reduction has a certain delay effect on sales, and Tesla's sales in China still declined significantly in April when Tesla launched a large-scale preferential campaign. According to the data of the China Passenger Car Association, Tesla's sales in China in April 2024 will be about 31,400 units, a year-on-year decrease of 21.4%. It wasn't until May that Tesla's sales in China rebounded, reaching 55,000 units, up 29.9% year-on-year. Overall, in the first five months of 2024, Tesla sold about 219,100 new cars in China, a year-on-year decrease of 0.4%.
"Resonating at the same frequency" with sales is the number of Tesla's employees. In April 2024, Musk revealed in an internal email that the company would lay off more than 10% of its workforce globally to cut costs and increase productivity. The sales and service department in China has become the hardest hit by layoffs, with a layoff rate of more than 10%. However, with the recent recovery of Tesla's sales in China, Tesla has initiated the process of recalling previously laid off employees, mainly employees in sales and other departments.
At present, in addition to the new energy vehicle track, Tesla is also betting on the field of humanoid robots. At Tesla's shareholder meeting in 2023, Musk said that the demand for humanoid robots may exceed 10 billion units in the future, far exceeding the number of new energy vehicles. Wanlian Securities Research Report believes that Tesla's long-term value in the future may come from the Optimus humanoid robot, which is expected to become a new disruptive product after 3C and new energy vehicles.
The auto price war has cooled down, and the number of models with price reductions has decreased significantly
Tesla's disguised price reduction in the form of "5 years and 0 interest" may also be a signal for the cooling of the auto price war. In addition to Tesla, Huawei's cars have also adopted a disguised price reduction, not directly adjusting the price of the car, but discounting the intelligent driving function package.
On June 30, Huawei announced that the HUAWEI ADS high-end function package will launch a limited-time preferential price, with the standard price of the ADS high-end function package being 36,000 yuan for one-time purchase, and the adjusted price being 30,000 yuan, which is 6,000 yuan lower than the original price. This promotion starts on July 1 and ends on December 31, 2024.
At present, Huawei is rapidly expanding its "circle of friends" in the field of intelligent driving. It is understood that in addition to the cars under Hongmeng Zhixing, many brands including AVATAR, VOYAH, and Trumpchi have also officially announced that they are equipped with Huawei's Qiankun ADS 3.0 system.
On the whole, the price war in the automotive industry has gradually eased. According to the statistics released by Cui Dongshu, secretary general of the passenger association, only 10 models will be reduced in May 2024, and the scale of price reduction is smaller than that of the same period in 2023. For comparison, 29 models were reduced in February this year, 49 models were reduced in March, and the number of models with price reductions in April was as high as 54.
Cui Dongshu believes that the number of price reduction models in May fell to a low level of 10, reflecting the temporary end of the "price reduction tide". With the significant reduction of price reduction models in May, the market has gradually returned to the normalized competition situation of promotion increments. On the whole, the scale of automobile price reductions from January to May 2024 has exceeded 9% of the whole year of 2023, surpassing the total scale of price reductions in 2022. The price reduction is mainly for new energy vehicles such as pure electric vehicles and plug-in hybrids, and the price reduction for fuel vehicles is less.
However, there is also a view that the auto price war will become the theme throughout the year, and many joint venture cars choose to cut prices sharply under the pressure of sales. Recently, the topics of "Rolls-Royce dealers cut prices by 1.11 million" and "7% off Porsche and 5% off BBA" have frequently rushed to hot searches. From June 28th to June 30th, Guangqi Honda launched the 628 Carnival Car Buying Festival, with a guide price of 197,800 yuan and a maximum drop of 50,000 yuan (including replacement subsidies) for the Guangqi Honda Accord, and 147,800 yuan after the discount.
According to the open source securities research report, the sales of self-owned brand passenger cars accounted for 57.5% in May, a record high, which is expected to be related to the continuous seizure of the market share of self-owned brand new energy vehicles in joint venture brand fuel vehicles. The sales ratio of Japanese and German cars decreased slightly from the previous month. In terms of Japanese cars, the cost performance of low fuel consumption is gradually surpassed by independent new energy vehicles, and the room for price reduction in order to maintain profits is also very limited, so the proportion of sales has declined significantly. In terms of German cars, sales of FAW-Volkswagen and SAIC-Volkswagen also declined significantly.
Ping An Securities Research Report believes that the background of the vehicle industry in 2024 is the head concentration + price war, the dynamics of the head players of the vehicle determine the value distribution trend of the automobile industry chain, and the increase in the concentration of the vehicle will make the self-research boundary of the main engine factory clearer, coupled with the increase in financing difficulty, the winning probability of the auto parts dark horse is significantly reduced, and the stock players that have been listed have a stronger competitive advantage.
Source: Securities Times