Auto & Transportation

The pattern of the global electric vehicle market has changed. In July of this year, Tesla lost its throne in the global electric car market and BYD won.

According to data recently released by EV Sales, BYD's global electric vehicle market sales reached 47,000 in July this year, and Tesla won the runner-up with 35,000. This is the first time BYD has surpassed Tesla this year.

Tesla is preparing to further open the market with a low-price strategy. According to foreign media reports, Tesla CEO Musk recently stated at a company meeting that in 2023 Tesla will release a model with a starting price of US$25,000 (equivalent to RMB 160,000) new energy vehicle, this vehicle may be released for public testing on September 25.

Tesla's throne is unstable

In July, Tesla's performance in the global and domestic markets was surpassed by BYD.

On the one hand, Tesla's recent price reduction strategy has left some consumers on the sidelines. On the other hand, Tesla's production capacity constraints have also affected sales growth to a certain extent. At present, Tesla has two major vehicle manufacturing plants in the world, located in Texas, USA and Shanghai, China. Due to foreign epidemics and chip shortages, the production capacity of Tesla’s overseas factories has been affected. For this reason, most of the cars produced by Tesla’s Shanghai factory were exported in July, which also led to Tesla’s presence in China in July. Market sales plummeted.

In the domestic market, BYD's new energy vehicle sales have surpassed Tesla for two consecutive months. According to data from the Travel Union, BYD won the championship with a wholesale sales of 51,000 vehicles in July, followed by Tesla China, which sold 33,000 vehicles. According to Rongyi Information Network (www.ironge.com.cn), SAIC GM Wuling ranked third with 27,000 vehicles. Tesla China sold 33,000 vehicles in July, of which 24,000 were exported. In other words, Tesla’s domestic sales in July failed to exceed 10,000, while Tesla’s domestic delivery in June was 28,000. At present, Tesla is expanding its production capacity. With the introduction of Model Y and other models, Tesla's sales are expected to increase further.

"With the continued increase in oil prices, traditional vehicles are facing certain sales pressures, while new energy vehicles have performed relatively well, especially the performance of A-class new energy vehicles. BYD is one of the representatives. It competes with joint venture brands with a low-price and parity strategy. , Has obtained a good market performance, and this has great potential." Cui Dongshu, secretary general of the Federation of Travelling Associations, told reporters.

It is worth noting that this is not the first time Tesla has lost the throne this year. As early as January this year, Tesla was surpassed by SAIC-GM-Wuling. SAIC-GM-Wuling's small car Wuling Hongguang mini EV has been selling hotly. It is precisely because of this that Tesla, SAIC-GM-Wuling and BYD have taken the top three in the domestic and global markets in recent months.

The competition that Tesla faces in the global market is not a single rival of BYD. In foreign markets, the effect of traditional car companies' efforts in the field of electric vehicles has gradually emerged. Unlike the Chinese market, traditional car companies Volkswagen, BMW and other electric vehicles have performed well in the global market, with brands ranking in the forefront. In April of this year, Volkswagen’s ID series models squeezed into the top five of the global electric vehicle sales rankings for the first time. From the sales rankings in recent months, the sales of the ID series are still rising. Judging from the ranking of global electric vehicle brand sales in July, Volkswagen and BMW ranked fourth and fifth respectively. In the top ten sales list, Mercedes-Benz, Audi, Hyundai and Volvo are also on the list. In March of this year, Volkswagen set a goal of delivering 1 million electric vehicles worldwide this year, and then BMW also announced plans to deliver 1 million electric vehicles to global users this year.

Looking at the overall electric vehicle market this year, Tesla still has a certain lead. The latest report from Canalys, a market research agency, shows that global electric vehicle sales totaled 2.6 million in the first half of 2021, an increase of 160% year-on-year. Tesla ranks first with a 15% market share. The second and third places are Volkswagen's 13% and SAIC-GM-Wuling's 11% respectively. The fourth and fifth places are BMW and Stellatis Group.

Lower the price threshold

The market positioning of Tesla and BYD is not the same. From the information on BYD’s official website, BYD’s models cover a wider price range, with models covering the price range of less than 100,000 yuan, 100,000 to 200,000 yuan, and 200,000 to 300,000 yuan.

Regarding BYD’s July sales of electric vehicles surpassing Tesla, Zhang Xiang, an automotive industry analyst, believes that first, BYD’s positioning is different from Tesla. The average price of BYD is lower than that of Tesla. Tesla’s lowest price is currently 235,000. BYD’s price coverage is wider, with some models priced around 100,000 yuan; second, BYD’s popularity continues to increase, and at the same time this year’s hybrid models usher in rapid development. BYD has accumulated deeper in the field of plug-in hybrids, and sales have risen sharply. Zhang Xiang said that with the launch of Tesla's new cars and the release of production capacity, Tesla's sales will once again usher in a wave of substantial growth.

In order to further expand its market share, Tesla's price threshold has been lowered again. According to foreign media reports on September 6, Musk said at a staff meeting that Tesla will launch a small electric car priced at approximately US$25,000 (equivalent to approximately RMB 160,000). People familiar with the matter said that Tesla’s car will not be named Model 2, but it may be a car designed for fully autonomous driving without a steering wheel or physical pedals.

It is undeniable that Tesla has rapidly reaped market share with a price reduction strategy, and Tesla's price has continued to drop since its localization. At the end of July this year, Tesla adjusted its prices again. It announced that it would lower the price of its main model Model 3 standard battery life upgrade version by 15,000 yuan, and the subsidized price would be 235,900 yuan. In the past two years, the entry-level model of Tesla Model 3 has been continuously reduced, and its highest price has reached 355,800 yuan. In other words, the price of Tesla Model 3 has fallen by more than 100,000 yuan.

Cui Yan's team at Huaxi Securities believes that in addition to the cost reduction impact of replacing lithium iron batteries, the price cuts also reflect the steady increase in the localization rate of parts and the gradual increase in scale effects, and the reduction of vehicle costs has exceeded the average transaction price. This round of price cuts for the renewed Model 3 is a continuation of the "price-for-quantity" strategy following the launch of the renewed Model Y.

Tesla CEO Musk once pointed out in the second quarterly report meeting that Tesla will gradually switch to the use of lithium iron phosphate batteries in the future. In the future, two-thirds of Tesla batteries will use lithium iron phosphate. In the past few years, due to factors such as low energy density and the inability to achieve fast charging, lithium iron phosphate was used in a small range and was only used in the field of A00-class electric vehicles and commercial vehicles. With technological progress, the market share of lithium iron phosphate has gradually increased. It is worth noting that BYD's blade battery is also a kind of lithium iron phosphate technology. In an interview with China Business News, Honeycomb Energy CEO Yang Hongxin said that the rapid growth of the lithium iron phosphate market is mainly due to its technological progress. One way is to expand the range of mileage through long and thin batteries, such as BYD blades. After the battery is cancelled, the volumetric energy density has increased by about 20%.

Despite the increase in sales, domestic new energy car companies still face challenges. From the perspective of the top ten electric vehicle brands in global sales, foreign brands account for the vast majority of market shares. "Electric vehicles are still dependent on state subsidies so far. This is a reality. If the domestic subsidy policy is really cancelled by 2023, then 2023 will be a year of polarization, and the domestic new energy market will face a loss of tens of billions of yuan. Financial support. By 2023, if the international subsidies for new energy vehicles are being subsidized, China’s cancellation of subsidies may affect the competitiveness of China’s new energy vehicles.” Gu Huinan, general manager of GAC Aian New Energy Automobile Co., Ltd. Said at the 2021 TEDA Automotive Forum.

Zhang Xiang believes that the main market share of China's new energy vehicles is mainly the contribution of pure electric vehicles. After the subsidy declines, the competitiveness and sales of new energy vehicles will decline. This result has been verified in 2019.