New energy vehicles, especially electric cars (EVs), have become a trend in the global automotive market. According to data released by the research firm EVTank, the global sales of new energy vehicles reached 14.65 million units in 2023, a year-on-year increase of 35.4%. Among them, China's sales reached 9.495 million units, accounting for 64.8% globally, maintaining its position as the world's number one for the ninth consecutive year. In 2023, the annual sales of new energy vehicles in the United States and Europe were 2.948 million and 1.468 million units, with year-on-year growth rates of 18.3% and 48.0%, respectively.
Traditional automotive giants have successively announced timetables for phasing out internal combustion engine vehicles to embrace the era of EVs.
The Volkswagen Group announced that it would stop selling fuel cars in the European Union market by 2035, marking its deep involvement in the wave of electrification. The Audi brand plans to launch its last all-new internal combustion engine vehicle in 2025 and stop selling fuel cars in 2033. The BMW Group's latest announcement states that its Munich plant will end the 75-year era of internal combustion engine vehicles by the end of 2027, marking the first successful completion of electrification transformation in BMW's global production network.
Among U.S. automakers, General Motors plans to achieve full electrification by 2035, while Ford announced it would achieve full electrification in Europe by 2030. In the new energy vehicle sector, Tesla's global production last year was about 1.85 million units, a year-on-year increase of about 35%, with new vehicle deliveries of about 1.81 million units, a year-on-year increase of about 38%. In the fourth quarter of 2023 alone, Tesla delivered 484,500 units of pure electric models.
As for Japanese automakers, Honda plans to increase the sales ratio of EV and FCV models to 40% by 2030, raise it to 80% by 2035, and achieve 100% by 2040. Toyota intends to achieve 100% electrification in China, Europe, and North America by 2030, with a sales target of 3.5 million units. Korean automakers plan to achieve full electrification in the European Union and other markets by 2035, and full electrification outside Korea by 2040.
Meanwhile, Chinese new energy vehicle manufacturers are growing rapidly in the global industry, becoming a driving force for rapid growth. In 2023, Chinese new energy vehicle manufacturer BYD secured the top spot on the country's delivery list with 3.024 million units, surpassing Tesla and securing the position of the world's top-selling new energy vehicle. It is noteworthy that in 2023, China's exports of new energy vehicles reached 1.203 million units, a year-on-year increase of 77.2%, setting a historic record.
The shift of these automotive manufacturers toward new energy vehicles represents a systematic transformation in the global automotive industry. Judging from the transformation efforts and determination of major traditional automotive giants, this is not a typical industry innovation or incremental expansion, but a "change of track" type of path transformation, where the industry and supply chains are being reconstructed. With more and more industrial and financial capital pouring into the field of new energy vehicles, their production and sales scales are rapidly expanding, and the industry itself is maturing.
Researchers at ANBOUND noticed that as market competition intensifies, the production expansion of major new energy vehicle manufacturers is continuously escalating, and competitiveness is on the rise. In this emerging and rapidly expanding market, there are even signs of overcapacity. For mass-consumption goods like new energy vehicles, the result of intensified competition inevitably leads to market price reductions.
Even Tesla, the global leader in new energy vehicles, has started to reduce prices. According to the official Tesla China website on January 12, the price of the Model 3 (refreshed) has been reduced to RMB 245,900, the price of the Model 3 Long Range (refreshed) has been reduced to RMB 299,900, and the price of the Model Y has been reduced to RMB 258,900. It is understood that the price of the Model 3 (refreshed) has been reduced from the previous RMB 261,400 to RMB 245,900, a reduction of RMB 15,500, and the starting price of the Model Y has been adjusted to RMB 258,900, a reduction of RMB 7,500. At the beginning of 2023, Model 3/Y also announced price reductions, ranging from RMB 20,000 to RMB 48,000. Currently, the starting price of Model 3/Y in mainland China is the lowest among Tesla's global markets. Tesla CEO Elon Musk stated during the third-quarter 2023 earnings conference call that Tesla would continue to work on reducing the prices of its vehicles.
In the Chinese market, several car brands have initiated promotional campaigns in 2024. Avatr, Tesla, Leapmotor, FAW Toyota, NETA, Ora, and Lynk & Co, have already done so, including limited-time insurance subsidies and deposit discounts. This round of promotional policies by car manufacturers is concentrated from January 1 to January 31 this year, with some extending until the Chinese New Year. Each manufacturer hopes to gain more market share in China, the world's largest new energy vehicle market.
The trend of price reductions in new energy vehicles has also reached the international market. Chinese automaker BYD has lowered the prices of electric vehicles at the home bases of Volkswagen, BMW, and Porsche. Reportedly, BYD has reduced the prices of EVs in Germany by 15% to expand its leading position in crucial markets. The price reduction by BYD covers its best-selling model, the Atto 3. This model started pre-sales in Europe in September 2022, with an initial price of EUR 38,000. Currently, the price of BYD Atto 3 in China is around USD 18,700, indicating that even after the price reduction in Germany, the overseas market price remains significantly higher than the Chinese market. This price difference may be due to various factors, including product configuration, market positioning, competitive environment, as well as tax and subsidy policies. Initiating price reduction promotions in the German market is expected to boost BYD's car sales in Germany.
It is noteworthy that, as a large amount of capital pours in and industrial expansion takes place, the market for new energy vehicles is starting to cool down. One observation is that the discount rates for EVs in markets like the UK, the U.S., and Germany are continuously increasing, indicating a cooling demand for EVs. In the UK, the average discount for EVs reached 11% of the suggested retail price in October 2023. In the U.S., the discount for EVs also reached 10%. A year ago, the German market almost had no discounts for EVs, but now manufacturers have lowered prices by approximately 7%. Many popular models have also joined the price reduction trend. For example, the price of BMW i4 in the German market has dropped by 20%, while MG4 and Renault's Dacia Spring have reduced prices by 11.5% and 11%, respectively. In the U.S., Ford lowered the price of the Mustang Mach-E by USD 6,700 and provided additional tax credits, while Hyundai's Ioniq 5 offered discounts of up to USD 9,400.
This strategy of price competition may hurt the long-term development of the EV market. As prices decrease, profit margins will be squeezed, posing greater challenges to the research development and production of EVs. At the same time, this will also affect the EV strategies of car manufacturers and their future market share. Consumer car-buying decisions are influenced by various factors. In addition to price, consumers also need to consider factors such as charging infrastructure, safety issues, and policy changes. These factors may all impact the demand for electric vehicles.
Final analysis conclusion:
The global automotive industry is beginning a systematic transformation toward new energy vehicles, with both industrial and financial capital heavily invested in the field, primarily dominated by EVs. As the sales volume of new energy vehicles rapidly expands, the intensity of competition in this market is escalating, driving a trend of price reduction for new energy vehicles. With the reduction of subsidies for new energy vehicles in various countries, the growth in demand for such vehicles may further slow down, bringing additional price pressure.
