Recently, China‘s new energy vehicles have been affected by the rise in raw material prices, which once set off a “price hike”. According to statistics, since March, nearly 20 brands and 40 models have increased their prices, ranging from 2,000 yuan to 30,000 yuan. Judging from the current price increases, Tesla and new domestic forces such as Xiaopeng, Ideal, and Leapmotor have seen the largest increases. For example, Leapmotor C11 increased by 13%-15%; Tesla’s model with the highest increase was Model Y, and the increase of each model remained around 8%.
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The pre-subsidy price of Xiaopeng Motors has been increased by 10,100-20,000 yuan. However, since the pre-subsidy price of some models of the main model P7 exceeds 300,000 yuan, it no longer enjoys state subsidies, resulting in a maximum fluctuation of more than 30,000 yuan, the highest Up nearly 10%.
The following table shows the specific price increases of new energy vehicles in 2022:
For the reasons for the price increase, most car companies have given a unified explanation – “upstream raw material prices”. The raw materials that increase in price are mainly concentrated in core components such as batteries and chips, especially the main raw materials of power batteries, such as lithium, cobalt, and nickel.
According to the survey results of China Association of Automobile Manufacturers, the price of raw materials for power batteries in China has risen sharply. The average price of battery-grade lithium carbonate has exceeded 500,000 yuan/ton from 53,000 yuan (RMB, the same below)/ton at the beginning of last year. .
Cobalt and nickel prices have also risen sharply at the same time. Cobalt prices have risen from less than 300,000 yuan/ton at the beginning of last year to more than 560,000 yuan/ton.
Data show that at the beginning of this year, compared with the same period last year, the prices of some raw materials rose nearly 10 times. If a pure electric vehicle with a battery capacity of 70 kWh is calculated, the cost of battery raw materials alone will increase by about 10,000 yuan.
In response to this phenomenon, Cui Dongshu, secretary general of the China National Passenger Vehicle Market Information Association, said that since the beginning of this year, the price of power batteries has risen at a much faster rate than the industry expected due to rising raw material prices.
Previously, many car companies and battery suppliers had locked in a relatively low annual supply agreement price, and the pressure on car companies was not prominent. However, some battery companies changed the price negotiation rules this year, and prices were negotiated quarterly, and there were price openings.
Therefore, car companies that sign new orders after the price increase of power batteries are under great pressure, and they can only alleviate the cost pressure by increasing the price.
Sorting out the reasons for the price increase of raw materials, Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, commented that this phenomenon “deviates from the normal supply and demand relationship”.
Entrepreneurs in the industry have also suggested that the competent government departments should strengthen the macro-control of the bulk raw material market, moderately speed up the development of domestic resources such as lithium and nickel, and crack down on unfair competition that is hoarding and driving up prices.
Otherwise, the price hike will intensify, which will affect the development of China‘s new energy vehicle industry in the long run.
For a long time, my country’s new energy vehicle industry has been policy-driven development, and has now formed a global comparative advantage, mainly in terms of market size, industrial system and technical level.
The product penetration rate of new energy vehicles in my country has also increased. In 2021, the penetration rate of new energy vehicles in China will reach 13.4%, which is at least 5 percentage points higher than that of the world.
Among them, in December, the penetration rate of new energy in passenger cars reached a historical peak of 20.6%, which once exceeded the national standard of 20% in 2025. From January to February this year, the penetration rate of new energy passenger vehicles has reached 20.1%, and the national task in the field of passenger vehicles has been completed three years ahead of schedule.
The accelerated product penetration rate will gradually usher in a market-driven development of my country’s new energy vehicle industry. This can reflect the rapid development of my country’s new energy vehicle industry. But looking at the world, this advantage is not outstanding, and there is still a lot of room for urgent efforts.
The United States and Europe have been catching up on the new energy vehicle track. Among them, the goal of the United States is to achieve 50% of the sales of new energy vehicles by 2030, and its subsidy policy has also increased from $7,500 per vehicle to $12,500.
The EU’s “dual carbon” target requires that the penetration rate of new energy vehicles in the EU must reach more than 30% in 2025, and must reach more than 60% in 2030 to achieve their carbon reduction goals. This goal has forced the accelerated development of its new energy vehicle industry.
The external competition environment is severe, coupled with the internal price increase storm, if the overall new energy vehicle market stalls, it is very likely that the production and sales of new energy vehicles will decline two years ago, thus affecting the healthy development of new energy vehicles in my country.
As a countermeasure, at this stage, some car companies have deployed lithium iron phosphate, hybrid and hydrogen energy to increase their ability to resist risks; some companies have chosen to intervene in the supply chain through self-developed and self-produced methods to solve battery supply and cost problems.
Zhang Xiang, an auto industry analyst, said, “For example, Tesla invested in lithium mines in Australia, Volkswagen invested in Guoxuan Hi-Tech, BYD has Fudi batteries, and car companies such as SAIC, Dongfeng, and Changan are rushing to set up joint ventures with CATL. “
This is because car companies increase their capital investment and increase their control over battery resources, so that they have a certain bargaining power, which is more conducive to increasing battery supply and further increasing their own production capacity.
The upstream and downstream of the industrial chain should work together to share the cost increase caused by the price increase of raw materials. Otherwise, if a certain link of the industry chain consumes all the rises, it will be difficult for the whole industry chain to win in the end.