With the technological progress and policy support of new energy vehicles, the traditional fuel vehicle market is facing unprecedented challenges and pressures. At the beginning of this year's Year of the Dragon, the two major new energy vehicle brands, Aion and BYD, respectively launched price reduction strategies to attract more consumers and accelerate the elimination of fuel vehicles and the popularization of new energy vehicles.
Some people believe that the joint efforts of Aion and BYD will end the market position of fuel vehicles and form a two-man pattern in the new energy vehicle market, while others believe that this is just a first-class war, with limited impact on fuel vehicles, and the competition in the new energy vehicle market is still fierce.
In fact, it is not difficult to find that the price reduction of Aion and BYD is based on the rapid development of the new energy vehicle market and the decline of the fuel vehicle market. Its purpose is also very simple, that is, to further clear the domestic fuel vehicle market.
According to the data released by the Passenger Car Market Information Association, in January this year, the domestic retail penetration rate of new energy vehicles was 328%, a year-on-year increase of 72 percentage points, down 75 percentage points. This means that almost one out of every three passenger cars sold is a new energy vehicle. Industry organizations predict that China's new energy passenger vehicle sales will increase by 24% year-on-year to about 11 million units in 2024, breaking through the "10 million" level, and the penetration rate is expected to increase to 40%. Zhang Yongwei, vice chairman and secretary general of the China Electric Vehicle 100 Association, said that by 2030, China and the European Union will become the leading regions of global new energy, with a penetration rate of more than 60%. In contrast, the fuel vehicle market is showing a downward trend, affected by the impact of new energy vehicles and consumer changes, the sales and market share of fuel vehicles are declining.
In this context, Aion and BYD have adopted different price reduction strategies to enhance their competitiveness and market share. Aion officially launched the new model AION Y Plus Star Edition, priced at 9980,000 yuan, the AION Y Plus, a compact pure electric SUV with a length of more than 4.5 meters, has been pulled to less than 100,000 yuan.
In addition to entry-level products, on March 5, Aion targeted the price reduction target at its own flagship model, Aion announced that its AION S Max Xinghan official price cut 230,000 yuan, and the price came to 17990,000 yuan, the vehicle not only has a maximum of 610km pure electric range, but also equipped with a 180kW high-power motor, supporting L2 level assisted driving, etc., which is equivalent to a B-class fuel vehicle at the same time, it is significantly better in configuration and driving experience. Aion's move is undoubtedly a major impact on the fuel vehicle market, allowing more consumers to see the advantages and value of pure electric vehicles, and also significantly improving Aion's sales and brand influence.
BYD has adopted another price reduction strategy, that is, the introduction of the hybrid DM-i entry-level product, to occupy the market at a low price. DM-i hybrid is a transitional new energy product of BYD, which adopts two sets of power systems, one is a fuel engine and the other is an electric motor, which can be switched under different working conditions to achieve the purpose of energy saving and emission reduction. BYD believes that the DM-i hybrid is a product suitable for the current situation, which can not only meet consumers' needs for cruising range, but also enjoy preferential policies for new energy vehicles, and the cost is relatively low and more acceptable.
At the beginning of this year's Year of the Dragon, BYD launched a variety of hybrid DM-i products, such as Qin Plus DM-i, Song Plus DM-i, Han DM-i, etc., with prices generally around 100,000-150,000 yuan, and even as low as 7980,000 yuan, fired the "first shot" of the new energy vehicle war. BYD's move has also caused panic in the fuel vehicle market, making more consumers inclined to choose hybrid DM-i products and abandon traditional fuel vehicles.
Aion and BYD's price reduction strategies, although the routes are different, but the purpose is the same, that is, to accelerate the transformation of fuel vehicles and promote the popularization of new energy vehicles. Driven by pure electric products with long battery life, fast energy replenishment, high intelligence, and high-value products, Aion allows consumers to realize the future trend and potential of pure electric vehicles, solves problems such as range anxiety, energy replenishment infrastructure and charging speed, and makes pure electric vehicles the norm.
In order to bring a better energy replenishment experience, Aion has built a "fast, wide and near" charging system, with brand energy stations covering 338 cities across the country, nearly 1.6 million charging piles, and building a 5-kilometer urban area and a 10-kilometer energy replenishment circle on the main road, so that Aion car owners can find charging piles within 10 minutes. In addition, Aion also launched a new OTA upgrade in January, which increases the charging speed of the AION Y Plus, AION S Plus, and AION S Max models by up to 28%, with a charging time of 30% to 80% in just 30 minutes, and a full range of up to 610km in 77 minutes.
Unlike Aion, BYD's price reduction is driven by the entry-level hybrid DM-i, allowing consumers to enjoy the low prices and discounts of new energy vehicles, solving the problems of cost and acceptance, and giving those consumers who are currently unable to accept pure electric vehicles have one more choice. Together, the two constitute a complete ecological chain of the new energy vehicle market, from high-end to entry-level, from pure electric to hybrid, to meet the needs of consumers at different levels, forming a strong market competitiveness.
Aion and BYD are both leading companies in the field of new energy vehicles, with independent technological innovation capabilities and brand influence, and both have a huge user base and market share. In 2023, BYD will achieve a total of 3.01 million units, which is not only the first in China, but also surpasses Tesla to become the global new energy vehicle sales champion, and is undoubtedly the leader of domestic new energy vehicles. And after BYD is Aion. Its cumulative sales in 2023 will exceed 480,000 units, a year-on-year increase of 77%, and it is more than 100,000 units higher than the third-place ideal. Different from BYD and Ideal, all Aion's models are pure electric models, which have completely gotten rid of the shackles of engine range extenders and achieved true zero emissions.
The alliance between Aion and BYD will also accelerate the product upgrading of the entire automotive industry and promote the popularization and promotion of new energy vehicles. Aion is not only the world's fastest pure electric brand and new energy brand to break one million, but also the world's fastest automobile brand to break one million. Aion's products and technologies have reached the international leading level. Aion has made breakthroughs in leading technologies such as AI large-scale intelligent cockpits, solid-state batteries, and L4 intelligent driving, and some of these technologies have even been put into mass production. Aion's success has also inspired other automotive companies, such as Geely, Great Wall, SAIC, etc., to increase investment and research and development of new energy vehicles, in order to catch up with Aion's pace, or cooperate with Aion to share Aion's technology and resources.
Overall, the price reduction strategies of Aion and BYD are based on the rapid development of the new energy vehicle market and the decline of the fuel vehicle market, aiming to accelerate the transformation of fuel vehicles and promote the popularization of new energy vehicles. The price reduction strategy of Aion and BYD also indicates that the two-hero pattern of China's new energy vehicle market has taken shape, and Aion and BYD will become leaders in the field of new energy vehicles, leading the product upgrading and technological innovation of the entire automotive industry.