The main conflict between users and new energy vehicles seems to have shifted from refusing to buy new energy vehicles due to range anxiety to the fact that the new energy vehicles they want to buy are still too expensive. However, after a year-long price war, the launch of the Jike 007 at the end of last year and the continued discounts offered by Leapmotor for its range-extended electric vehicles at the beginning of this year may be foreshadowing a new price landscape for new energy vehicles in China in 2024. Specifically, practical range-extended electric vehicle models will be priced steadily below 150,000 yuan, and models with 800V high-voltage supercharging will be priced below 200,000 yuan.
Cost control is the core technology of 2024.
In terms of policy, starting in 2024, new energy vehicles will enter a two-year period with a "purchase tax exemption of no more than 30,000 yuan". Technologically, range-extended electric vehicles (REEVs) and plug-in hybrids (PHEVs) in a broader sense, along with fast charging technology represented by 800V, basically constitute the technological landscape in the short to medium term. Before the potential "halving of the purchase tax on new energy vehicles" in 2026 and the dual pressures of solid-state battery commercialization materialize, at least this year, the biggest challenge facing automakers is how to make already market-accepted technologies more affordable.
Taking range-extended electric vehicles as an example, even Leapmotor, which claims to price based on cost rather than brand, can only barely stay above the 150,000 yuan mark, after excluding its unique competitive advantages. Even in the first quarter of last year, when price wars intensified, Leapmotor was one of the most proactive automakers in implementing price protection policies. The situation began to change in the third quarter of last year, but at that time, Leapmotor's price reductions for its main models, the C11 and C01, primarily focused on pure electric vehicles. Finally, in November of last year, Leapmotor turned its price concessions towards its main range-extended electric vehicle sales drivers. In fact, the promotional activities launched in January, focusing on discounts on optional extras, interest-free financing, and services, can be seen as a continuation of the preferential policies implemented at the end of last year.
As for the Leapmotor C11, which holds the 150,000 yuan price point for range-extended electric vehicles, the reason it can maintain a moderately firm stance on its core price is due to several factors. Besides the lack of competitors in its class, Leapmotor's own C10 is also poised for launch. Following a similar "cookie-cutter" approach to Li Auto, although the pre-sale price of the range-extended version is still above 150,000 yuan, supporting policies such as pre-authorization benefits and optional discounts have effectively brought the price below 150,000 yuan. Moreover, the Leapmotor C10's size is positioned lower than the C11. Combined with consumer expectations and product differentiation, the actual launch price of the Leapmotor C10 is clearly something to look forward to.
If range-extended electric vehicles (REEVs) are a workaround to address range anxiety, a core contradiction in the new energy era, then the 800V high-voltage platform is clearly a direct solution for electrification. It offers faster charging speeds, higher efficiency, and even better performance. The advantages of 800V at this stage are undeniable; its only drawback is its high price. With Porsche's early endorsement, 800V seemed inherently pricey, until Xpeng Motors in China pushed it to the edge of 200,000 yuan. The emergence of the Jike 007 further pushed that 200,000 yuan mark.
After all, 2024 has just begun, and there's still plenty of time to bring the price of vehicles equipped with 800V high-voltage platforms below 200,000 yuan. In fact, XPeng Motors has already begun to loosen its grip. At the end of last year, XPeng launched a limited-time discount of 10,000 yuan on the G6, effectively putting the starting price of the product below 200,000 yuan. In addition to improvements in vehicle technology such as platform integration and matching 800V lithium iron phosphate batteries, the speed of hardware support for high-voltage fast charging is also expected to surge in 2024. For example, Huawei plans to deploy 100,000 liquid-cooled charging piles, and Jike aims to build a total of 1,000 supercharging stations this year.
Are car companies with advanced technology not finding a large enough market?
The core driver of price wars is market share. Moreover, judging from the market performance in 2023, the brands we cited earlier that possess technology, or the ability to wage price wars based on technology, may not have a large enough market share. Take Leapmotor as an example: it delivered approximately 144,000 new vehicles last year, a year-on-year increase of about 29%. In contrast, Li Auto, which also started with range-extended electric vehicles but has a much higher average order value than Leapmotor, delivered approximately 376,000 new vehicles last year. Previously, Leapmotor stated its "2024 sales target of 300,000-400,000 vehicles." Clearly, even with the boost from new car launches and maintaining a growth rate of about 30%, achieving this delivery volume will be difficult. Therefore, lowering the entire price structure becomes an inevitable path.
JK's situation is more like "critical acclaim but poor sales," because before the launch of the JK 007, the brand didn't actually have any traditionally high-volume products. Even so, JK's vehicle deliveries approached 120,000 units last year, a year-on-year increase of 65%. Clearly, the emergence of the JK 007 signifies that its own lithium iron phosphate (LFP) batteries (Gold Brick batteries) are beginning to unleash the potential of its vast architecture in terms of cost. Moreover, this potential may further decrease, as the cost of LFP batteries continues to decline. With the average price of battery-grade lithium carbonate raw materials steadily falling below 100,000 yuan/ton, battery costs in 2024 may unlock the price-cutting fuse for automakers aiming to capture a larger market share.
What's even more interesting is that, besides the domestic market, the two brands mentioned above are also actively expanding into the European market. Europe is undoubtedly the largest consumer market for new energy vehicles outside of China. At the end of last year, Leapmotor completed its equity transfer with the multinational automaker Stellantis, paving the way for its European exports. The Leapmotor C10, mentioned earlier, is the first model prepared for the European market and is expected to be delivered there in the third quarter of this year. Also in the second half of last year, the JK001 and JK0X obtained sales permits in the European market, and the first European version of the JK001 was successfully delivered at the end of last year. Even though the charging infrastructure in Europe is uneven, it's entirely possible to anticipate the performance of the JK007, equipped with 800V charging, in the European market.
In conclusion
The new energy vehicle market in 2024 may be a period of calm before the next wave of technological and policy shocks. But behind this calm lies the best opportunity for automakers to seize market share with mature technologies at lower prices. This is based on the premise of eliminating the need for converting gasoline vehicles to electric and providing an electrified experience that avoids range anxiety. The outlook for new energy vehicles in 2024 will be: mainstream range-extended electric vehicles priced below 150,000 yuan, and in areas with "charging for 1 second to travel 1 kilometer" infrastructure, products meeting the 800V high-voltage platform standard will be priced below 200,000 yuan.
