Sales in the second quarter both set records! Tesla trades price for volume against BYD
“Tesla and BYD’s sales in the second quarter set records respectively, solidifying their leading positions as the world’s best-selling electric vehicle manufacturers.” Bloomberg News reported on the 3rd Tesla said it delivered a record 466,000 electric vehicles globally in the second quarter, an 83% year-on-year increase and beating Wall Street expectations. At the same time, BYD also announced its best quarterly sales ever, with sales of 70.02 new energy passenger vehicles, half of which were pure electric vehicles and the rest were plug-in hybrids. Affected by the data, BYD’s stock price and Tesla’s battery supplier CATL rose significantly on the 3rd. At the close on July 3, BYD rose 3.57%, and its latest market value reached 778.7 billion yuan.
83%, Tesla’s growth rate is amazing
Tesla’s results show that CEO Elon Musk’s pursuit of sales through price cuts has had the desired effect. According to the “Nihon Keizai Shimbun” report, the company will start to cut prices in China from the second half of 2022, and will also start to cut prices sharply in the United States in January 2023. The price reduction is still ongoing.
On July 1, Tesla China’s official website showed that the prices of all versions of Tesla’s Model X and Model S will be further reduced by 35,000 yuan to 45,000 yuan, of which the starting price of Model S will drop to 773,900 yuan, and Model The starting price of X has dropped to 988,900 yuan. The price cut is further evidence of Tesla’s determination to boost sales in the world’s largest and most competitive electric vehicle market.
“Tesla’s sales increase also benefited from the U.S. government’s tax credit policy,” according to the “New York Times” report on the 2nd, Tesla Model 3 is now eligible for a $7,500 federal tax credit. Under the policy, the cheapest Model 3 costs less than $33,000, a bargain compared to gas-powered luxury sedans sold by the likes of Mercedes-Benz and BMW, and compared to VWs such as the Toyota Camry and Honda Accord. Market car prices are comparable.
According to Bloomberg News, in addition to sales, industry analysts are very concerned about the gap between Tesla’s electric vehicle production and delivery in the second quarter, because in the first quarter of this year, the company produced more electric vehicles than delivered to customers. Nearly 18,000 more. “Everybody was worried about the build-up of inventories, and now it looks like inventories have normalized. The gap between production and deliveries is narrowing,” Baird Investments analyst Ben Caro said in an interview.
Despite the increase in sales, according to a report in the Wall Street Journal on the 3rd, Musk is pursuing growth at the expense of profitability, which shook the confidence of some investors earlier this year. Just how much this year’s promotional efforts have hit profits will be revealed when Tesla reports its financial results on July 19. According to reports, Tesla’s operating profit margin fell to 11.4% in the first three months of 2022 from 19.2% in the first three months of 2022.
The matrix is complete, BYD’s advantage is expanded
Bloomberg reported that Tesla remains the largest electric car maker in the United States, but it faces new competition around the world. In China, its second-biggest market, the company has fallen far behind BYD, which has newer models and growing market acceptance.
According to BYD’s June production and sales bulletin data, BYD sold 253,000 new energy vehicles in June, including 251,700 passenger vehicles. Sales of pure electric (EV) models were 128,200, and sales of plug-in hybrid (PHEV) models were 123,500, an increase of about 84% and 92.3% respectively compared with 69,500 and 64,200 in the same period last year.
In this regard, Zhang Xiang, a visiting professor at the Yellow River Institute of Science and Technology and a researcher at the Automotive Industry Innovation Research Center of North China University of Technology, said in an interview with the Global Times reporter on the 3rd that one of the main reasons for BYD’s record sales is that its product matrix is relatively complete and the number of models is large. , The price covers a wide range and can meet the needs of different consumer groups. In comparison, Tesla’s product types are thin, and 95% of its sales come from Model 3 and Medel Y; secondly, BYD has manufacturing motors, The core technology of batteries and chips, which enables it to control costs and ensure the security of the supply chain. In the past, Tesla has shut down production due to supply chain interruptions. BYD’s “self-sufficiency” model can make its production capacity less affected by external factors. impact; in addition, BYD has a long history of car manufacturing, and has extensive experience in research and development, production capacity, and sales network.
BYD has recently continued to enter the hinterland of Europe. On June 13, BYD held a brand and product launch conference in Italy, announcing its entry into the Italian passenger car market. On June 14, BYD said it would launch five electric vehicles in the French market. JPMorgan Chase’s global automotive team has conducted a comprehensive survey of BYD’s major overseas stores, and believes that BYD’s domestic new energy vehicle business and overseas expansion will bring potential upside, saying it is still optimistic about BYD.
In the year of reshuffle, Chinese enterprises forge ahead collectively
In the past June, other new domestic car-making forces also released impressive report cards. According to Hong Kong’s “South China Morning Post” report on the 2nd, sales of Ideal, Weilai and Xiaopeng surged in June after months of sluggish market demand. According to the data, the delivery volume of Ideal Auto reached 32,600 units in June, and the monthly delivery volume exceeded 30,000 units for the first time, a year-on-year increase of 150.1%. NIO delivered 10,700 vehicles to customers in June, returning to the delivery level of 10,000 vehicles. Sales of Xiaopeng Motors rose 14.8% month-on-month to 8,620 units.
“Automakers can now expect a sales boost in the second half of this year, as a large number of consumers have already started making plans to buy electric vehicles after waiting on the sidelines for several months,” said Gao Shen, an independent analyst in Shanghai.
According to the South China Morning Post, in the first four months of this year, a price war broke out in mainland China’s auto market, with manufacturers of electric vehicles and gasoline vehicles hoping to attract more consumers. Many automakers have chosen to lower prices in order to preserve market share. But deep discounts failed to boost sales, as consumers held back, thinking deeper price cuts were likely. According to a research report by CITIC Securities, many Chinese auto consumers who had been on the sidelines and expected further price cuts have now decided to “enter the market” because they feel that “the carnival is over.”
The U.S. “Fortune” magazine website reported on the 3rd that judging from the current situation, China’s new energy vehicle market has entered a new stage, and now competitors in the market have realized that this year may be a “shuffle” of the new energy vehicle market year. At BYD’s annual shareholder meeting held in June, the company’s chairman Wang Chuanfu bluntly stated that “the new energy vehicle industry will enter the knockout stage.”
Facing the second half of the year that has already started, what kind of development situation will China’s new energy market usher in? Zhang Xiang analyzed that the “price war” lasted for a long time in the first half of the year, and car companies were affected to a certain extent. The impact of the war will be reduced. Car companies rely more on core competitiveness such as strengthening their own innovation, cost control, and sales network to increase sales.
Dong Yang, vice chairman of the China Electric Vehicle 100, told the “Global Times” reporter on the 3rd that China has achieved a phased lead in the field of new energy vehicles and power batteries. With an optimistic attitude, Chinese new energy car companies only need to work hard in accordance with market demand and market laws.