Latest China EV Motoring News
If you are not familiar with the first 2 names, don’t worry, you may soon be. They are aiming to be China’s leading domestic EV brands, along with Tesla. Whilst still long way from toppling Tesla as leader, both Xpeng and Nio recorded increased sales figures for December 2020. What is more interesting though, to us at least, is Tesla responded by cutting its retail price. Again.
It’s against this backdrop that our story today unfolds .
A quick update for those who may not understand the China Ev landscape.
Tesla, in China, has been hitherto seen as a “premium” brand. That means, the upper end of the market. More expensive. Until recently, the EV market in China was distinct. At the top there was Tesla. And that’s about it. The middle and lower end merged into a bloody battle ground between dozens of China Johnny come lately and better known domestic ICE brands. All fighting for the lowest common denominator.
China Brands Background
The reason for this was a very generous subsidy courtesy of the Chinese Gvt. This was seen as a quick way to get EV vehicles into the the national fleet. Ultimate aim: combat air pollution. Of course, all good things must end. And so did the subsidies. This saw many, if not most of the low to middle end brands go to the wall.
In the blood bath that followed, only a few survived. Xpenfg and Nio among them. Both brands began life as sort of Tesla wannabe’s. Styled along the ridiculously popular SUV look that began in China with Range Rover Evoque. Or rather, the very good and cost effective clone, Land wind.
Who are what is Landwind?
Landwind is a brand or marque of Chinese automaker Jiangling Motors, infamously known for their uncanny ability to quickly clone popular luxury auto models in China. Obviously at a more competitive price. The “Landwind” brand is a direct play on Landrover.”
Mercedes GLA, and Isuzu Rodeo being another 2 examples of Jianling’s copies.
Sadly, for Landrover, the copy turned out not just to be cheaper, ( RNB 140k v/s RMB 350k ) but generally, all round superior, from specs to finish to performance . Landrover sued Landwind, ( link may not open in China) and won, but they lost the sales war. The SUV style became cemented into China’s motoring must haves. You may find a little background to Landwind models useful? Meanwhile, Tesla still sat comfortably at the top of the EV mountain.
The Tesla China Story
Tesla built its following in China on size and price. It was a big, solid looking car and expensive. Two factors extremely important to the burgeoning middle class in China. Driving a Tesla said: “Look at me, look at me. I am richer and better than you.” These were the early EV converts from other, mostly European luxury internal combustion engine [ICE] marques, such as BMW, Mercedes Benz, Audi, Lamborghini, and Maserati.
Tesla has tweaked its pricing a few times in China, one of the latest was downward once the China factory went into production. This was repeated last year after China axed subsidies. Later China reneged but setting a max retail price to qualify. Obviously this was to incentivise buyers to buy domestic brands. Tesla retaliated by reducing prices to fall inside Gvt guidelines. Just. However, it was still at the top of the mountain so to speak.
Tesla: where to now?
To quickly recap, Tesla has, more or less, built its brand on the back of the look at me, look at me, sect for whom bigger and more expensive indicates personal superiority. However, the latest price cut from Tesla could be read that they are concerned at the rise in sales and popularity of Xpeng and Nio. But would Tesla’s traditional supporters would be tempted to switch horses?
Maybe Tesla are seeing the writing and playing the long game? More global luxury brands have announced their intention to enter the China EV market in the coming year. Perhaps Tesla is wary of competing with the likes of Bugatti, Maserati, Lamborghini for the top end market? Is it now shifting gears to aim at the mid price bracket?
Tesla’s latest price cut, New Years day 2021, brings its model Y down to a starting price of around 340,000 yuan which pitches Tesla Y squarely in the same bracket as NIO EC6 Suv with a starting price of around 370,000 Yuan. Xpeng on the other hand quote their entry level G3 iSUV at around 150, 000 Yuan. However, this is a price after subsidies and it lacks some of the other two’s features so it is not an equal comparison.
For buyers looking for a “my car is more expensive than yours” model Tesla would seem to be pricing itself out of that market. However, just like the general Chinese consumer goods market, the Chinese automobile buyer is also maturing and looks deeper before committing to a purchase these days. Having the most expensive is not as high on their shopping list as it once was. Standing out is fast losing favour to the more European, low key subtle approach to wealth. Style and technology, reliability and service is more important. While style is subject, many believe Tesla is still unique, whereas Xpeng and Nio still look more like copies of other SUV’s.
However we feel it is fair to say that the market generally believes that Tesla has the technology advantage as well as a superior service and recharge system network. Perhaps Tesla’s crystal ball tells them that the burgeoning middle class will be the biggest battle ground with more opportunity and, at the moment, less intense competition than the top of the market.
Your guess is probably as good as, maybe even better, than ours. But whatever the reality, we feel certain that the EV market in China is going to become very interesting this year and even if they may not show it, some local Chinese makers will be concerned.
This article is drawn from a variety of sources plus our own research. The topic is well covered in a simple search. However, we do recommend these two, premium, articles from Caixin Global.
Thanks for reading our China news, marketing, tech and social media article – we hope it was useful, relative, informative, valuable.
Then perhaps you may like to chat directly and personally with Everlyne?
But please, be aware of local (China) time when calling from overseas. Despite rumours to the contrary, Everlyne is human, not a bot, she does eat, drink and sleep – sometimes.
Whatever your question re Chinese Business, Marketing Tech or Social Media, she will know the answer, or know someone who does! A brief intro below;
In 2003 Everlyne Yu co-founded WPBeijing Marketing Studio with Englishman Peter Bic, now known as Bic Brands.
She began Uengager, a company focused on customer engagement, as a SaaS MarTech company in 2017.
Hello, Nihao, I’m Everlyne
I love to talk about and help people understand the amazing ways MarTech and SaaS can work to strengthen your business engagement with Chinese consumers.
I know you have questions or want to talk about your brand or business in China so please, drop me a line opposite. If you prefer live chat, call and talk to me live, in person direct.
Everlyne is also a key note speaker, lecturer and KOL on MarTech in China. She is CEO of Uengager, business development officer for Bicyu.
Everlyne hs been privileged to work with a variety of international organisations, from VW, Cushman Wakefield, Sodexo, Bristol Myers Squibb to local Chinese firms such as Midea, and OK Order.
If you’re looking for guidance, tips, advice on any aspect of starting or growing a business in China or training, coaching your existing China marketing team for excellence, be sure to check out Uengager. Home page and base for Everlyne Yu. Read her short bio – opposite left – or contact her direct – below – for a free, heart to heart chat.