While the extraordinary launch of the VW ID.4 (the launch video is here) and the solidly growth-y performance the “BEV Startups” (NIO, Li, WM , Xpeng) have cut into Tesla’s market share in China, who would have guessed that the new leader in China’s passenger EV market would be...this.
www.forbes.com
Full November auto sales results from China have not been released yet, but today’s announcement from Wuling Motors that the Hongguang Mini EV sold 33,094 units in November should be a shot across the bow to all Chinese EV players. Tesla’s
TSLA +4.5% Model 3 is not number 1 in China anymore. Not even close. While the extraordinary launch of the VW ID.4 (the launch video is
here) and the solidly growth-y performance the “BEV Startups” (NIO, Li, WM , Xpeng) have cut into Tesla’s market share in China, who would have guessed that the new leader in China’s passenger EV market would be...this.
Hongguang Mini
It’s OK if you laugh at the picture. I haven’t had the pleasure of driving one yet, but the Hongguang Mini is a funny looking vehicle. It also carries a starting price of 28,880 RMB, which translates to $4,380. Hit that price point, Elon!
The Hongguang Mini is produced by the SAIC
SAIC +1.3%-GM-Wuling joint venture, which is one of the many legacy combinations between Western automakers and Chinese local titans. The Mini charges on a standard (for China) 220V three-hole plug and according to the excellent China automotive
site Gasgoo, is also chargeable at public AC charging piles, but lacks any fast-charging capability. Basic NEDC range is 120km with the 9.2kWh battery pack and can be extended to 170km with the larger, 13.2 kWh battery pack.
This is what the market is missing in 2020’s amazing run-up in the shares of “Chinese BEV plays” like Tesla, NIO, Li Auto and others. China is a poor country. According to the IMF, China's 2020 GDP per capita of $10,839 ranks it 59th in the world or between Costa Rica and Malaysia.
Of course, it is cooler to make luxury and near-luxury cars. I have enough friends in the car business to know that’s true. But, as I noted in my Forbes
column yesterday, cars are a consumer product. Price points are important. The innumerate buffoons who constantly push Tesla-China conspiracy theories and horribly inaccurate estimates (one buffoon is still pushing “Tesla will sell 150K in China in 2020” despite the fact that the CPCA reported Tesla had sold 92,000 made-in-China Model 3s through the first 10 months of 2020) just don’t see this. Full November unit sales figures for China will be released next week.
I was one of the first Western analysts to write on NIO, in my Forbes
column, and the success of Bin Li’s company (and stock) has been amazing. To put it in perspective, though, NIO recently announced that it had sold 5,291 units in China in November (composed of three models; ES6, ES8 and EC6) and therefore NIO’s corporate sales trailed the Hongguang Mini by nearly 80% for November.
It’s painful for me to have to write this, but I just don't think the stock market understands that luxury car markets are smaller than the mass-market (hence the name.) There are fewer units to be sold, and there is typically much more competition. Tesla doesn't sell a non-luxury vehicle anywhere in the world, and Elon lives in a world where VW (and especially its Audi division) BMW and Mercedes live. Also, Volvo is coming on very strong in the BEV space with its own-branded XC40 Recharge BEV SUV and its corporate cousin, the Polestar 2 BEV luxury car, which is produced by Volvo’s corporate parent Geely in China.
It’s on. It is on. Competition in the auto industry leads to pricing pressure. Always. I doubt that Wulling is able to discount the price of the Hongguang Mini by much (if at all) but Tesla's extraordinary series of price cuts (in Europe, China and the US) in 2020 show just how price-competitive the luxury car market is. Competition is real and it comes in different forms.
Myopic morons who only measure one company’s deliveries without regard to the performance of an entire sector are making the same mistake as those counted the BlackBerries sold by (what was then) Research in Motion in the mid-2000’s without taking into account the potential danger from more user-friendly platforms like iOS and Android.
So, behold your leader in Chinese EV sales. GM’s stock price has had a decent run of late—along with the overall market—but I don't think market participants are really buying the Electric GM story just yet. In contrast, GM’s Chinese JV partner SAIC (also a partner with VW as well as a strong player though its own brands) has seen its shares languish on the Shanghai exchange. SAIC shares are only now regaining their level of January 2020 while shares of NIO and Li (and other Chinese EV plays) have gone bananas
But the Hongguang Mini is winning the Chinese EV race. The numbers do not lie and should never be forgotten.
www.electrive.com
