The stock price plummeted by 30%, and the sales of BYD Wang Chaohan EV and Tang DM-i were weak and the price was reduced.
Zhiyi Automobile/Zhengqi
In the process of the rise of new energy vehicles in recent years, BYD is undoubtedly the most eye-catching force. Byd has gained a huge market advantage by relying on the strategy of parallel battery and vehicle.
Recently, however, BYD’s products have been reduced in price. After all the models of BYD Ocean Network have been reduced in price, BYD Dynasty Network has also announced preferential policies for its popular models. So which models have BYD officially reduced in price? Is it necessary for BYD, which is not worried about sales, to make such a profit?
1. The deposit of Han EV and Tang DM-i is 2,000 to 10,000, and the replacement subsidy can be exempted by 4,000.
On November 8, BYD Wang Chaowang released a message that users only need to purchase its Tang DM-i Champion Edition (112 km model) and Han EV Champion Edition before 24: 00 on November 30, 2023, and complete the car purchase invoice. You can enjoy the activity of 2,000 yuan deposit to 10,000 yuan car purchase.
In this way, these two champion models have been given a discount of 8000 yuan. And the government also provided a replacement subsidy of 4000 yuan. In addition, the government also provided financial policies such as five-year super-long loans with a down payment of 15%, as well as various intelligent services and maintenance services.
Although it seems that the price reduction of BYD dynasty series is not too great, it should be noted that BYD dynasty series has never been a slow-moving model. It is rare to get close to 10,000 yuan.
And BYD’s discount also has some doorways. Tang DM-i and Han EV are high-end products of Dynasty series, and they are also well-known products. Giving them some preferential policies can undoubtedly attract more consumers to the store, and may also promote the sales of other models.
On the other hand, BYD’s two models are indeed facing certain sales pressure in the near future.
2. New forces compete for the market, and BYD is on pins and needles.
After more than ten years of development, China’s new energy vehicle market has entered the second half. The blue ocean, which once had few competitors, has turned scarlet in the cruel killing.
Although BYD has been in deus ex, it has taken the top spot among new energy vehicle companies. But the pressure it faces is not small. In addition to the siege of old car companies such as Geely, Great Wall and Chang ‘an, the advantages of software and hardware established by new forces such as "Wei Xiaoli" are gradually showing strong market appeal.
More importantly, a group of Internet forces represented by Huawei, Baidu, Xiaomi, etc. took part in building cars. Under their "empowerment", the car level of many car companies has improved linearly. New energy vehicles that flaunt the function of intelligent driving, such as Wenjie, Zhijie, Jiyue and Aouita, have attracted many consumers’ attention.
Although BYD has its own mature industrial chain, such as batteries and complete vehicles, and the method of reducing costs and increasing efficiency learned from Toyota, BYD can establish a huge advantage in car companies with lower cost and higher production capacity. However, in the face of all kinds of fancy intelligent configuration of new forces, BYD, whose style is relatively "simple", will inevitably be seized in some markets.
However, the pre-sale of the medium and large-sized car Zhijie S7, which Huawei cooperates with Chery, is about to start on November 17th. BYD Han EV, which is also pure electric for medium and large-sized cars, is bound to encounter sales challenges. At the end of last month, Geely and Baidu’s Extreme Yue 01 went on the market. This medium and large SUV, known as the "car robot", will obviously affect the sales of BYD’s products.
What’s more, before Sellers’ M7 went public, it would have exceeded 80,000 a month. BYD Tang DM-i, which is also a seven-seat hybrid SUV, slightly overlaps with the low-priced version of Wenjie M7 in price, so Wenjie M7 is likely to have a certain "blood-sucking" effect on BYD Tang DM-I..
Moreover, BYD Han EV and Tang DM-i are really tired in sales. Since July this year, BYD Han EV has never sold more than 10,000. After the sales volume of Tang DM-i exceeded 10,000 for seven consecutive months this year, the sales volume in August and September continuously returned to below the 10,000 mark. It was not until October that it barely broke through 10,000.
Therefore, BYD’s price reduction this time is an active response to these challenges. In addition, the price reduction of BYD’s main models has the significance of boosting investors’ confidence and completing future planning goals.
3. When the stock is sold by the old stock god, BYD’s share price will return to 300.
Judging from this year’s sales, many people may think that BYD’s top management has no need for anxiety. As of October this year, BYD has sold 3 million cars this year.
But Wang Chuanfu, president of BYD, set a sales target of 4 million vehicles at the beginning of the year. Now there are only three months left, one million short of the target. This requires BYD Group to achieve an average monthly sales of more than 330,000 vehicles in the next three months.
It is difficult to achieve increment in the increasingly fierce new energy market. First of all, BYD’s own dynasty series and ocean series have been difficult to achieve more sales increments without reducing prices.
The high-end route planned by BYD now seems to have many obstacles. Although Tengshi stood firm by the explosive MPV Tengshi D9, the market response of Tengshi N7, N8 and other products launched later was flat.
The ultra-high-end brand that BYD Group strives to build looks forward to the first production car U8, which targets luxury SUVs and off-road vehicles such as Mercedes-Benz G and Land Rover Range Rover, but the annual sales of these high-end products are only a few thousand to early 10,000. Looking up to U8, even if it can compete with it in sales volume, it can’t contribute too much to BYD’s sales target of 4 million.
Therefore, BYD can only choose to reduce the price of the main models in exchange for sales. This seemingly irrational price-for-sales approach actually reflects BYD’s high-level eagerness to boost market confidence. Since last year, a number of financial capitals have been selling BYD’s shares. Take Warren Buffett as an example. Since August 2022, Buffett has sold BYD Hong Kong stocks for 13 consecutive times.
Buffett bought BYD at the price of only 8 yuan, and now BYD’s share price around 250 yuan is at an absolute high level. For investors, when the stock reaches a high level, cashing out is the normal operation. Now, when Buffett sold BYD last year, the share price around 300 yuan really seemed to be a high stage.
If BYD’s top management wants to keep its share price at a high level, it must convince investors with actual performance and technological progress. The sales target of 4 million is more like BYD’s share price, which will continue to attract other investors and nail them here.
Write it at the end
Now, after the crazy selling, Warren Buffett has reduced his holdings of BYD’s Hong Kong stocks by more than half. As an investment vane, he is bound to affect many investors’ decisions on BYD.
If BYD can achieve the sales target of 4 million, it will undoubtedly play an important role in boosting investor confidence. In order to achieve this sales target, BYD’s continuous efforts may make the killing of the new energy vehicle market in the second half of the year even more tragic.
