Reporter Yan Liting
As the leader of the domestic new energy vehicle industry, BYD has launched the third price increase this year.
On November 23, BYD's official Weibo issued an announcement stating that due to the withdrawal of new energy subsidies and the increase in upstream raw materials, the guide price of its new energy models under Chaozhou, Ocean and Tengshi will be raised, with the overall increase range ranging from 2,000 yuan to 6,000 yuan. The details of the adjustment of specific models will be notified separately. In addition, the above announcement also states that users assigned before January 1, 2023 will not be affected.
According to the power plant, this is the third time BYD has raised its price this year. The first two times were on January 21 and March 15, with the price increase of 1,000 yuan to 7,000 yuan and 3,000 yuan to 6,000 yuan respectively. Overall, the reasons for BYD's three price increases are basically similar.
According to BYD's announcement, the impact of the withdrawal of new energy subsidies is the first to be affected. In 2022, although the new energy subsidy has dropped by 30% on the basis of the previous year, BYD's plug-in hybrid model and each pure electric model can still receive subsidies of 4,800 yuan and 12,600 yuan. According to the existing policies, the new energy subsidy policy will be terminated on December 31, which will have an adverse impact on BYD's gross profit.
In terms of revenue volume, in Q3 2022, BYD's business revenue, including subsidies, was only 290 million yuan, accounting for about 0.25% of the total revenue, which seems insignificant, but according to Xinda Securities , BYD's net profit in Q3 2022 was only 9,400 yuan, less than 1/7 of Tesla . From this level, the 4,800-12,600 yuan bicycle subsidy given by the government at this stage is crucial.
According to the power plant, BYD's official guide price after this round of adjustment is basically the current subsidy price. Unlike Tesla, whose net profit is close to US$10,000, BYD's complete vehicle business has always been low. In Q3 2022, driven by the effect of scale, the overall gross profit margin reached 18.96%. However, the price of raw materials remains high at this stage, and the entire industry is facing great cost pressure.
On November 9, Zhu Huarong, chairman of Changan Automobile , complained at the China Automobile Forum that from the beginning of 2021 to the present, the price of battery-grade lithium carbonate has increased by more than 10 times, and the cost of Changan new energy bicycles has increased by 50 million to 30,000 yuan. Previously, the industry generally expected that battery costs would gradually decline in the second half of the year, but Li Bin recently said at the performance analysis meeting of NIO that everyone's expectations for battery costs were too optimistic.
For BYD, it is still difficult to resist even if vertically integrates industry chain 's advantages to the extreme. BYD's three price increases this year without exception all involve the impact of upstream price increases. The problem is that the overall external economic environment at this stage is sluggish, and price increases will undoubtedly affect the enthusiasm for car purchases. In October, BYD announced a total sales volume of 217,800 units, but the terminal insurance volume was 160,200 units, and decreased by about 4% month-on-month compared with .
In this regard, CITIC Construction Investment Securities Chief Auto Analyst Cheng Siqi said at the 2022 China Auto Forum that the decline in subsidies at the end of the year will stun a group of auto companies, and many auto companies will be forced to become high-end. Next year, the high-end pure electric market will be more crowded, and the concentration of the new energy industry will be forced to increase. The upstream supply chain is still under continuous pressure. Next year, all auto companies will face a strategic choice, is it to sell volume or gross profit margin?
From this perspective, BYD's choice is self-evident. In addition to BYD, new forces including Tesla are also facing varying degrees of pressure. Due to weak sales, Tesla has cut prices twice in a row. Recently, it has been reported that Tesla is planning a new round of price cuts. As of now, the pick-up cycle of Model 3 and Model Y has been shortened to about one month, and the fastest pick-up of car can be carried out in one week.
This year, the contract was lost to the Golden September and Silver October, which puts heavy pressure on new energy vehicles companies. In order to further increase sales, LePan Auto recently stated at a performance communication meeting that it will add extended-range versions of the pure electric models in the future. Before LePan, similar news was also reported by Xiaopeng Auto .Regarding the market prospects, Jinghua, senior vice president and secretary of the board of directors of LePhantom, judged that this year's Q4 is not bad, and the pressure will be greater next year's Q1.
