Monday, May 20, 2024
BusinessHow will local Chinese brands counter Tesla's potential $25,000 EV?

How will local Chinese brands counter Tesla’s potential $25,000 EV?

Six months ago Tesla was rumored to be launching a Model 2 in China with a price tag as low as RMB 160,000 ($25,000), though this was denied by the company. Recently such rumors have resurfaced, raising high concerns in China’s new energy vehicle industry.

The latest reports say that Tesla is expected to launch the Model 2 in China next year, and that the third phase of its Shanghai Gigafactory is being built for the new model, with the new car perhaps hitting the market in the third or fourth quarter of next year.

In China, although the Wuling Hongguang Mini EV has outsold Tesla for 11 months in a row, its roughly RMB 30,000 price tag means it’s not a Tesla competitor.

In recent years, Chinese and foreign joint venture brands have taken a lot of market share away from local brands by cutting prices. But at a time of rapid development of new energy vehicles, local emerging brands seem to be rising fast.

BYD is accelerating the launch of new platforms and models to increase competition for the market in the RMB 100,000 to RMB 200,000 price range.

The company announced on Monday that its new Dolphin model, which will be based on the company’s latest e-Platform 3.0, will be available for pre-sale on Aug. 13.

The car, priced at RMB 110,000 – RMB 130,000, is slated to be a compact EV and offered in five color options.

If Tesla’s so-called Model 2 becomes a reality, this model will be one of its biggest competitors, and at a much lower price.

BYD beat Tesla again in July with 51,000 EV sales in China, taking the top spot in China’s new energy vehicle sales for the second consecutive month.

Tesla China had 33,000 wholesale EV sales in July, including 24,000 exports, with less than 10,000 deliveries in the Chinese market.

NIO, which announced its second-quarter earnings yesterday, has also officially announced that it will enter the mass market through a new brand, preparations for which have been accelerated and a core team has been established.

The mass brand that NIO will launch hopes to be less expensive than Tesla, but the experience will surpass the latter, William Li, the company’s founder, chairman and CEO, said on the second-quarter earnings call Thursday.

But the brand appears to be competing with Tesla’s Model 3. “The NIO brand has a similar relationship to this new brand as Lexus has to Toyota, and Audi has to Volkswagen,” Li said.

This article was first published by Phate Zhang on CnEVPost, a website focusing on new energy vehicle news from China.

CnEVPost is a website focused on the coverage of the new energy vehicle industry in China. As with our original intent for CnTechPost, there are a lot of interesting things happening in the Chinese EV industry every day, but they are not covered by the mainstream English language media. We're here to keep track of what's happening in the Chinese EV industry and strive to be the first to publish what we see in English.