Original content by New Energy View (ID: xinnengyuanqianzhan)

Recently, according to the declaration information from the Ministry of Industry and Information Technology, multiple BYD models including the Song PLUS DM-i, Han, Song Pro, and Seal 05 will undergo a "refresh" in the second half of the year.

Based on the prices of BYD's older models and the strategy of the "Glory Edition," they may be BYD's new levers to capture the market below 200,000 yuan and achieve annual sales targets.

In fact, BYD's market share is primarily concentrated in this price range.

According to statistics from the Yiche Index, in the first half of this year, BYD sold 266,500 vehicles in the under-100,000-yuan market segment, accounting for a 20.32% market share; in the 100,000-200,000-yuan segment, BYD sold 834,700 vehicles, accounting for an 18.04% market share; and in the 200,000-300,000-yuan segment, BYD sold 182,800 vehicles, accounting for a 9.64% market share.

Image/Sales review of automobile brands at various price points in the first half of 2024

Source/Yiche Index's official Weibo account, screenshot from New Energy View

It is not difficult to see that when it comes to "conquering" the market above 200,000 yuan, BYD seems slightly "weak."

Among the several middle-class consumers contacted by New Energy View, nearly 80% gave a negative answer when asked if they would consider buying a BYD.

At this stage, it seems to have become an unspoken rule in the new energy vehicle market not to choose BYD for budgets exceeding 200,000 yuan.

In the second half of the year, who will be impressed by BYD's "series of plays," and how should BYD's brand ascend?

1. "China's Number One Automaker" fails to capture the middle class

When mentioning BYD, terms like "ride-hailing," "price slayer," and "cheap" often come to mind.

It is undeniable that by "playing the low-price game," BYD has become China's top automaker today.

From January to July 2024, BYD retained its position as the top-selling automaker in China with cumulative sales of 1.948 million vehicles, a year-on-year increase of 29%. This achievement also seems to declare its determination to dominate the market.

But can reality meet BYD's aspirations?

As the saying goes, ideals are abundant, but reality is harsh.

A closer look at BYD's July sales figures reveals that while 342,000 vehicles sold is indeed a good growth trend compared to the same period last year, the credit shouldn't be solely attributed to BYD itself. After all, in the face of the strong momentum of new energy vehicles in the automotive market, few companies have failed to show year-on-year growth. Meanwhile, when we isolate BYD's July sales from the previous month, it's not hard to see that the mere 725-vehicle increase is stagnation.

Image/BYD sales in June and July 2024

Source/BYD's official Weibo account, screenshot from New Energy View

So, what's holding BYD back?

The culprit seems to be related to the image that BYD has accumulated in consumers' minds over time.

The logo, as the facade of a brand, determines consumers' first impression. BYD's initial blue sky and white cloud logo could be considered the first in "rustic" aesthetics. At that time, there were not a few consumers who gave up on BYD because of its logo.

Although there have been enthusiasts who have vied to redesign the BYD logo, the designers at BYD still seem unable to come up with a better logo idea despite the collective wisdom of consumers.

In 2022, BYD's fourth logo refresh sparked heated debate among netizens, with comments like "It's like nothing changed," "It went from a 30 to a 40," and "As ugly as ever, designers: took three minutes."

Image/Comparison of old and new logos in 2022

Source/Internet, screenshot from New Energy View

Of course, the logo is just one aspect that affects brand image, and BYD's current image can also be attributed to its product positioning.

Image/BYD logo "designed" by netizens

Source/Internet, screenshot from New Energy View

At its inception, BYD, lacking high technical barriers and design capabilities, chose the "low-end" path to quickly open the market and gain popularity. Consequently, adjectives like cheap and low quality became inherent images of BYD.

In recent years, due to economic development, people's consumption levels and demand for material culture have been increasing year by year. To capture this trend, BYD has launched multiple models targeting various market segments, attempting to win over consumers across the board with a sea of models.

Unfortunately, when this brand that built its reputation on low prices encounters middle-class consumers, the spark disappears.

Xu Bin (pseudonym), a senior executive at a state-owned enterprise, recently considered buying a new car. When choosing a brand, he immediately ruled out BYD, saying, "I wouldn't consider BYD even with a 100,000-yuan budget, let alone 200,000 yuan."

To date, BYD has six models priced above 200,000 yuan on sale: the Han, Seal, Tang New Energy, Song L EV, Seal 07, and Guardian 07.

In terms of sales, the monthly sales of the Han and Seal in July this year were about half of their previous best monthly sales; the Song L EV, which started strong but faded, sold only 2,605 units in July; the Guardian 07, which sold over 10,000 units per month for two consecutive months in 2023, sold less than 1,000 units in July; and the Tang New Energy is currently experiencing sluggish sales growth.

As for BYD's sub-brands Tenza and Fangchengbao, which are tailored for middle-class consumers, their sales figures have not even ranked in the top ten among new force brands.

Facing a lack of favor in the market above 200,000 yuan, BYD, which excels at price wars, has repeatedly tried to regain the upper hand by wielding its "slaughterhouse knife." However, tactics like low pricing and a sea of models are futile in the face of BYD's low-end image.

2. The loss of favor had early warning signs

It is perhaps inevitable and predictable that BYD would receive a "cold shower" from consumers.

Specifically, in terms of product quality, complaints about BYD's product control and quality issues have been commonplace in recent years as its sales have grown.

From January to July 2024, there were over a thousand complaints about BYD on the China Network's automotive quality complaint platform, and hundreds of pages of complaints on the Chezhizhi website.

Guo Master (pseudonym), a ride-hailing driver, drives a BYD Han. According to him, the central control screen of his car often tilts shortly after purchase, and the problem recurs despite repairs at the dealership. "After several fruitless attempts, I gave up and just drive it as is. You get what you pay for," he said.

Image/BYD Han central control screen tilt photo

Source/Shot by New Energy View

Multiple BYD owners have expressed that Guo Master's experience is relatively minor compared to other issues they've encountered, such as broken axles.

Apart from product quality issues, BYD also struggles to be a frontrunner in intelligent driving.

For example, when encountering areas not covered by high-precision maps, BYD's advanced intelligent driving functions cannot function, whereas new forces like Li Auto, XPeng, and AITO have already supported mapless autonomous driving. Meanwhile, BYD's current offerings like the iTAC intelligent all-wheel drive control system and narrow road assistance lag behind competitors like NIO, XPeng, and Li Auto.

Tracing back, the reason for BYD's slow development in intelligent driving technology can be attributed to Chairman Wang Chuanfu's previous criticism of autonomous driving.

At BYD's 2022 financial report meeting, Wang Chuanfu said, "Autonomous driving is all bullshit. It's all about creating hype with nothing substantial behind it. It's like the Emperor's New Clothes..."

This year, realizing his mistake, Wang Chuanfu has sought to catch up, but BYD is already lagging behind.

Regarding BYD's weakness in intelligent driving technology, Tesla founder Elon Musk tweeted on July 31 that BYD needs to quickly change direction or risk getting into trouble.

However, consumers are disappointed not only with BYD's product quality and intelligent driving technology but also with its battery performance.

As everyone knows, BYD started as a battery manufacturer, but it still seems far from shedding the burden of spontaneous combustion.

According to statistics from the Yiche website, there were over 30 incidents of BYD vehicles catching fire in the first three quarters of 2023, accounting for about 16% of the cumulative number of fires among various new energy brands in China.

Image/Partial data from 2023 accident statistics

Source/Internet, screenshot from New Energy View

In contrast, several new energy brands in the market, such as ZEEKR, AVATR, and AITO, have achieved zero spontaneous combustion.

Faced with these hidden dangers, BYD, aiming for short-term gains, can only focus on continuous price cuts, but a market share gained solely through low prices is doomed not to last.

Meanwhile, while BYD has six models priced at or above the 200,000-yuan level, none of them have a starting price above 200,000 yuan.

"People who buy BYD are just suckers. They keep changing the model and the price keeps fluctuating. It's heartbreaking. I definitely won't choose BYD for my next car," said Mr. Niu (pseudonym), a BYD Han owner.

Thus, BYD, which aspires to elevate its brand image to the mid-to-high-end segment, has consistently failed to achieve its goal.

3. Will BYD copy homework?

In the fiercely competitive new energy market, price wars and low-cost products are indeed a quick way to capture market share, but this approach risks disrupting the market in the long run.

Moreover, automakers without competitive products cannot sustainably share the market's spoils, even if they are leading Chinese automakers like BYD.

In contrast, new force brands like NIO and Li Auto have maintained high growth rates since their listing, partly due to their own solid strength and partly due to the recognition of their brand image by middle-class consumers.

From January to July 2024, NIO and Li Auto sold 107,900 and 240,000 vehicles, respectively, representing year-on-year increases of 43.9% and 49.4%.

Xiaomi SU7, which was only launched in March this year, has achieved sales that surpassed the BYD Han in a single month due to its outstanding performance in intelligence, product quality, and brand positioning.

Ms. Zhao (pseudonym), a Xiaomi SU7 owner, said, "Xiaomi has always been known for its affordable smartphones, but I think the SU7 offers great value for money in the 200,000-yuan segment. Apart from its exterior and interior design, its 360-degree sentinel mode also impresses me a lot."

Image/Xiaomi SU7

Source/Shot by New Energy View

"What I like most about Li Auto is that it incorporates the concept of home into its car design. Now, every time we go on a road trip, my kids always turn on the rear entertainment screen," said Mr. Zhang (pseudonym), a Li Auto L7 owner.

Mr. Xiao Bo (pseudonym), a NIO ET5 owner, believes that battery safety and convenient charging are important factors when purchasing a new energy vehicle. Facts have proven that NIO's 3-minute battery swap technology has never disappointed him.

So, in the face of the strong winds of the new forces, has BYD, which has always been obsessed with sales, realized that it has missed the opportunity to capture middle-class consumers by failing to elevate its brand?

The answer is evident in BYD's recent layout.

At the end of July, BYD officially announced a strategic partnership with Uber, an international mobility and delivery technology company. According to the partnership plan, BYD will deploy 100,000 electric vehicles in key global markets.

However, an overview of the new energy vehicle market shows that the focus of new force brands like NIO and Li Auto this year remains on new product development and technology upgrades.

In comparison, it is clear that BYD is not only technologically inferior to the new forces but also lags behind in elevating its brand.

It is worth mentioning that new force automakers have already extended their reach to the lower-tier market. For example, the highly anticipated Xiaomi MONA M03, with a starting price expected to be below 140,000 yuan, aims to compete directly with BYD.

Image/Xiaomi MONA M03

Source/Shot by New Energy View

In the future, if BYD wants to maintain its market share, it should learn from these new force brands and win over consumers with intelligence, quality, and service. Otherwise, if BYD fails to penetrate the market above 200,000 yuan and cannot defend its position in the market below 150,000 yuan, its tower will collapse.