On March 17, Nezha automobile released the explanation of model price adjustment, saying that due to the rise of upstream raw material prices and tight supply chain, the price of models on sale will be adjusted by Dingli Corp.Ltd(300050) 00 yuan.
It is reported that the price adjustment of Nezha automobile took effect at 0:00 on March 18. Before that, users who purchased through official designated channels such as Nezha automobile app and official website were not affected by the price adjustment.
For this price increase, some netizens said on the social platform, “5000 yuan is enough for my gas bill for a year?” “I want to know which brand hasn’t increased its price?”.
The cost pressure of new energy vehicles is transmitting to the demand side. Since March this year, new energy vehicle enterprises have set off a wave of “price rise tide”. From March 10 to 17, Tesla raised prices three times in a week; On March 15, Byd Company Limited(002594) also said that the official guidance prices of new energy models related to dynasty.com and ocean.com would be adjusted from 0:00 on March 16, with an increase range of 3000 yuan to 6000 yuan. In addition, GAC AEAN and Chery new energy also raised their prices recently. In early March, China Central Television financial report also showed that since March, nearly 20 new energy vehicle enterprises have announced price increases, involving nearly 40 models.
Many car companies attributed the price adjustment to the impact of “sharp rise in raw material prices”. In this regard, Bai Wenxi, chief economist of IPG China, told time finance that in addition to labor and manufacturing costs, the cost factors affecting the price rise of vehicle enterprises are mainly focused on the sharp rise in the price of vehicle power batteries and insufficient supply, while the price rise of power batteries is caused by the sharp rise in the upstream raw materials lithium and nickel.
As a key raw material for the production of stainless steel and new energy batteries, the price of nickel futures on the London Metal Exchange (LME) rose irrationally from March 7 to 8 this year. On March 7, the closing price of LME nickel futures in March reached US $50300 / ton. On March 8, the highest intraday price of LME nickel futures in March rose to a record US $101365 / ton. On the afternoon of March 8, LME announced that all nickel transactions on that day were invalid, suspended nickel transactions, and decided not to resume before March 11.
In this regard, the relevant person in charge of China Nonferrous Metals Industry Association said that the current nickel price seriously deviated from the fundamentals, lost the guiding significance of spot price, deviated from the original intention of serving the real economy, and caused serious harm to the global nickel and upstream and downstream related industries. At present, LME nickel futures trading has resumed on March 16. On March 17, LME announced that it would raise the limit on the rise and fall of nickel trading to 12% until further notice.
When the price trend of relevant raw materials is not clear, will there be a second wave of “price rise” for new energy vehicles?
“Not in the short term. The supply chain shortage under the conflict between Russia and Ukraine has been transmitted, and the impact of rising raw material prices on the industry has become an established fact.” Zhong Shi, an auto industry analyst, also told time financep align=”center” style=”text-align:left;”> obtained three rounds of financing in half a year
At the same time, Nezha has obtained three rounds of financing in nearly half a year.
According to public information, Nezha’s main operator is Hezhong New Energy Vehicle Co., Ltd. (hereinafter referred to as “Hezhong new energy company”), which was established in 2014, obtained the production qualification of new pure electric vehicles in April 2017, released its car brand Nezha in 2018, and launched the first mass production car Nezha N01 at the end of that year.
According to tianyancha, Hezhong new energy company has obtained 9 rounds of financing since its establishment. Among them, the company completed three rounds of financing in four months from October last year to February this year.
On October 27, 2021, Nezha automobile officially announced that it had completed the D1 round of 4 billion yuan financing. The financing was led by 360 group and invested 2 billion yuan, followed by CCB international, Citic Securities Company Limited(600030) investment, Shenwan Hongyuan Group Co.Ltd(000166) Hong Kong’s new energy industry fund, Giff venture capital and many other well-known investment institutions. It is reported that 360 group has invested a total of 2.9 billion yuan in two consecutive rounds. Only on November 8, 11 days later, Nezha automobile announced again that it had officially signed a strategic agreement with Contemporary Amperex Technology Co.Limited(300750) and Contemporary Amperex Technology Co.Limited(300750) would participate in the D2 round of financing and make strategic investment in Nezha automobile.
According to tianyancha data, on February 21 this year, Hezhong new energy company completed a new round of financing of more than 2 billion yuan. The main investment institutions include CRRC fund under Crrc Corporation Limited(601766) group and Shenzhen Venture Capital with state-owned assets background in Shenzhen. At that time, there were public reports that Nezha’s valuation exceeded 25 billion yuan after the completion of Series D financing, and it was only a matter of time before it went to Hong Kong for IPO.
In terms of sales volume, in 2021, Nezha delivered 69674 vehicles, a year-on-year increase of 362%. According to the latest data in February this year, Nezha delivered 7177 vehicles in February, a year-on-year increase of 255%. The cumulative delivery volume from January to February 2022 was 18126 units, up 332% year-on-year from 4197 units in the same period last yearP align = “center” self owned brand new energy vehicle penetration rate 41.9%
The booming sales of new energy vehicles is reflected in the whole industry.
According to the industry data of China Automobile Industry Association, from January to February this year, the production and sales of new energy vehicles completed 820000 and 765000 respectively, with a year-on-year increase of 1.6 times and 1.5 times respectively, and the market share reached 17.9%. “The overall performance of new energy vehicles in February was still excellent, decreased month on month, and maintained a high-speed growth year-on-year.” In February this year alone, the production and sales of Shanxi Guoxin Energy Corporation Limited(600617) vehicles in China were 368000 and 334000 respectively, with a year-on-year increase of 2 times and 1.8 times respectively.
Source: China Automobile Industry Association
Specifically, from January to February 2022, China completed the production and sales of 652000 and 604000 pure electric vehicles respectively, an increase of 1.4 times year-on-year; The production and sales of plug-in hybrid electric vehicles were 168000 and 160000 respectively, with a year-on-year increase of 2.8 times and 2.5 times respectively; 356 and 371 fuel cell vehicles were produced and sold respectively, with a year-on-year increase of 5.0 times and 3.1 times respectively.
It is worth mentioning that according to the data of the all China passenger Federation, the retail penetration rate of new energy passenger vehicles in China was 21.8% in February, an increase of 13 percentage points over the same period last year. Among them, the penetration rate of new energy vehicles among independent brands is 41.9%, that of luxury brands is 17.4%, while that of mainstream joint venture brands is only 3.5%.
However, in the context of rising sales, with the reduction of subsidies for new energy vehicles, the rise in the price of raw materials and the introduction of exclusive insurance, the price of new energy vehicles is likely not to be as “friendly” as before.
“From the perspective of consumers, this round of price increase may have a certain psychological impact on consumers’ demand for new energy vehicles, but it will not have much actual negative impact. However, if the price of new energy vehicles continues to rise and the rise is large, it will have an actual negative impact on market demand.” Bo Wenxi said.
In addition, from the perspective of rising fuel prices, consumers may need to make a rational choice between buying cars and using electric cars.
