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In an interview with the media at the China Electric vehicle 100 people Forum (2023) today, Li Bin said that Tesla's price reduction was adopted in the face of fierce competition in the Chinese market, but it does not have pricing power in China. It is also pointed out that Tesla has pricing power in the US market because it has a market share of 60 per cent to 70 per cent, but in China, Tesla has only 7 per cent share. Relevant data show that the sales of new energy vehicles in China reached 6.887 million in 2022 and 439770 in Tesla in 2022.

It is worth noting that on January 6 this year, Tesla launched a big price reduction in China, and the starting prices of his two models reached a record low, with Model 3 falling by 2.0-36000 yuan and Model Y by 2.9-48000 yuan. The adjusted price range of Model 3 is 22.99-329900 yuan, and that of Model Y is 25.99-359900 yuan.

After Tesla's big price reduction, Motors and Xiaopeng followed Guan Xuan's price reduction one after another. On January 13, AITO announced the price reduction of its M5 EV and M7 models, in which the adjusted prices of the two M5 EV models were 259800 yuan and 289800 yuan, respectively, down by 28800 yuan and 30, 000 yuan, respectively. The price of the other two models remained unchanged, and the adjusted prices of the other two models were 289800 yuan and 309800 yuan, respectively.

On the afternoon of January 17, Xiaopeng announced a price adjustment for some of its models. Xiaopeng's three G3i/P5/P7 models fell by as little as 20, 000 yuan and as high as 36000 yuan. In addition to the above-mentioned car companies to follow up on price cuts, there are other car companies have also launched disguised price reduction activities. For example: extreme krypton cars launch time-limited promotional activities, consumers can get 6000 yuan for exterior decoration options when they buy all the extreme krypton 001 models, and WE models and ME models with high-performance air suspension can get a discount of about 10, 000 yuan. GAC Ean launched a time-limited delivery incentive of 5000 yuan per vehicle, as well as financial subsidies of zero interest and low down payment for three years, while Volvo offered preferential policies for its pure electric C40 models and pure electric XC40 models. Consumers can deduct 25000 yuan, equivalent to a price reduction of 20, 000 yuan, if they pay a deposit of 5000 yuan before March 31 this year. Zero-running cars introduce a time-limited subsidy policy for C01 models. A fixed payment of 5000 yuan can be worth up to 30000 yuan, including a cash discount of 10000 yuan, a financial discount of up to 10000 yuan, and a price reduction of 5000 yuan for a comfortable optional package.

However, with regard to the price reduction, NIO has always said that it will not follow up on the price reduction. Earlier in Li Bin said: Tesla price reduction, NIO will not fall, because there is no room for price reduction, we are all negative gross profit, so we can only do a good job of service, at least we are still alive. Yes, after looking at the net loss of Xilai Motor in recent years, I may suddenly understand the meaning of Li Bin's words. According to relevant data, the loss of Lulai reached a record high of 14.437 billion yuan in 2022, while the net loss of NIO in 2021 was 4.017 billion yuan, an increase of 259.4% over the same period last year. Surpassed Xiaopeng car and ideal car. The more you sell, the more you lose, and it has become the norm in recent years. If calculated on the basis of the cumulative sales of 122500 vehicles and net loss in 2022, it can be calculated that the estimated loss of each car sold by NIO is more than 100000 yuan.

At the same time, NIO's gross profit margin also fell sharply, from 18.9% in 2021 to 10.4% in 2022, especially in the fourth quarter of 2022, when the gross margin of Lulai was only 3.9%. As we all know, for automobile companies in the automobile industry, vehicle gross profit margin is a key financial index, which can most directly reflect the profit level of automobile enterprises. In order to avoid being caught in the quagmire of a price war, Pu Yang, assistant vice president of sales and operations, said in an interview, "NIO will not participate in price reduction through various types of reduction or rights reduction." We believe that this wave of price cuts will come fiercely and retreat quickly. NIO will strive for a larger market share in accordance with its own strategy, through direct marketing means, more efficient operation, to a more refined gross profit mode of operation, to provide users with a very high-end cost-effective and competitive products. Li Xiang also said that he would fight a "war of values."

From Tesla's price reduction at the beginning of the year to the recent automobile price reduction in Hubei in March, it is not difficult to find that the price war in the automobile market has begun, which will also accelerate the survival of the fittest of new energy vehicles. Now, it is not so much that NIO does not want to cut prices, but that current profitability does not allow it. Of course, in the long run, a simple price competition strategy is not a long-term solution for all car companies. After all, if we want to have long-term development, we still need to speak with products and make more efforts in product technical quality, service brand strength and so on.

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