For the Chinese auto market, July is typically a slow sales season. As automakers have already pushed sales volumes in the first half of the year, they are now in a recovery phase. Therefore, automakers tighten their policies to prepare sufficient resources for the golden September and silver October sales periods.

However, the delivery figures from new energy vehicle (NEV) makers in July suggest this trend is being broken, as most of them have achieved sales growth. It seems we are witnessing a repeat of last year's strong sales despite the traditional slow season.

This is a positive sign for the NEV sector.

Universal sales growth among new energy vehicle makers

Looking at specific brands, NIO and AITO lead the pack, maintaining a significant advantage. NIO sold 51,000 vehicles in July, maintaining its 50,000+ monthly sales level and showing strong momentum. AITO, while slightly behind, sold 41,619 vehicles in July, a 2.7% month-on-month decrease. In the first quarter of this year, AITO surpassed NIO in sales, putting significant pressure on the latter. In response, NIO introduced the volume-oriented L6 model and adjusted its organizational structure, quickly reversing the pressure on AITO.

Aion sold 35,238 vehicles in July, a 0.6% month-on-month increase. Considering its scale, Aion can be classified among the top-tier players. Currently, GAC Aion is shifting its development path, focusing on high-end and overseas markets to create a second growth curve. Maintaining sales momentum during this transition period is crucial for Aion.

In July, Aion launched the second-generation AION V (Tyrannosaurus Rex). Considering the delivery timeline, its contribution to brand sales will become evident in August.

Among the second-tier players, NIO sold 20,498 vehicles in July, marking its third consecutive month of over 20,000 deliveries. NIO had a stellar July, with the successful tape-out of the world's first 5-nanometer smart driving chip. Additionally, it officially launched SkyOS Tianshu, its full-vehicle operating system, and the NAD Arch 2.0 smart driving architecture. The all-new Banyan intelligent system is expected to be rolled out by the end of August. NIO seems to be telling the world that its billions of dollars in annual losses have not been wasted but have been invested wisely.

Leopaard Auto sold 22,093 vehicles in July, a 9.8% month-on-month increase and a record high, maintaining its monthly sales above 20,000. Following the launch of the Leopaard C16, it received over 10,000 pre-orders in its first month, started nationwide deliveries, and shipped the first batch of international vehicles to Europe. From the fourth quarter, Leopaard Auto will introduce the C10 and T03 models to the Middle East, Africa, Asia-Pacific, and South America.

In the third tier, Deep Blue Auto delivered a cumulative total of 16,721 vehicles in July. During the month, Deep Blue officially delivered the G318. At the end of the month, it launched the S07, equipped with super-extended range technology and Huawei's Qiankun intelligent driving system, priced between 149,900 and 212,900 yuan. Huawei's contribution to Deep Blue's sales will become apparent starting this month.

ZEEKR sold 15,665 vehicles in July, a 22% month-on-month decrease, falling out of the 20,000+ monthly sales club. Notably, the refreshed ZEEKR 009 was launched in July and received over 6,000 pre-orders within ten days. Next, ZEEKR will introduce the crossover SUV model MIX and a mid-to-large SUV. By the end of the year, ZEEKR's product lineup will comprise six models.

XPeng, Nezha, and Xiaomi each sold over 10,000 vehicles in July. Xiaomi did not disclose specific sales figures, but according to ideal weekly sales rankings, it delivered 11,400 new vehicles from July 1st to 28th. A Xiaomi executive stated that they expect August sales to exceed 10,000 again. XPeng delivered 11,145 new vehicles, a 1% year-on-year and 4% month-on-month increase. XPeng's MONA M03 began arriving at dealerships on August 1st. Nezha delivered over 11,145 vehicles across its entire lineup in July, mainly driven by the rapid ramp-up of the Nezha L. In August, Nezha will introduce the new Nezha X and Nezha S Shooting Brake, refreshing its product matrix.

In the fourth tier, Lantu and IM Motors each sold over 6,000 vehicles in July. Lantu sold 6,105 vehicles, a 10.9% month-on-month increase, marking the second time this year it has exceeded 6,000 sales. This is a positive sign. IM Motors sold 6,017 vehicles, also the second time this year it has reached the 6,000+ sales level.

Signs of easing price wars

One notable aspect of the July auto market was the universal sales growth among NEV makers, while another was the easing of the price wars that had raged for over a year, with some brands quietly adjusting their prices upwards. In fact, the intensity of discounts began to weaken in June for some automakers. NIO and Leopaard Auto maintained similar discount levels in June compared to May, while discounts for Ideal and Geely narrowed in June.

In July, BMW, Mercedes-Benz, and Audi dealers began raising prices. Taking BMW as an example, both electric and gasoline-powered vehicles saw price increases. The price hikes by BBA are undoubtedly seen as a sign of withdrawing from the price war. By doing so, BBA aims to protect its dealers. Not only have they exited the price war, but they are also subsidizing their 4S stores. Additionally, traditional joint venture brands such as Volkswagen, Toyota, Honda, and Volvo have announced adjustments to their terminal policies and reductions in discounts starting in July.

Furthermore, the launch of the BYD Song PLUS DM-i and Song L DM-i models at higher prices than their predecessors is a thought-provoking sign, as BYD has historically been a major player in price wars. The unusually high pricing of these new models suggests that BYD's next moves will be worth watching.

Some argue that the sustained intensity of price wars in the auto market is abnormal and unsustainable. The ultimate goal of price cuts is to strike at competitors and gain more market share, with consumer benefits being a secondary consideration. Once competitors are weakened and market share is secured, prices will naturally return to normal levels.

Do not doubt this. After all, there is no such thing as a losing business in this world, and the automotive industry is no exception.

Moreover, price wars have impacted the entire industry chain to varying degrees. Since the second half of last year, Tesla, Ideal, Ford, and several Japanese and German automakers have implemented cost-cutting measures such as layoffs. Regarding whether the price wars will continue, automaker CEOs have engaged in various debates. Industry leaders like Zeng Qinghong, Li Shufu, Wang Chuanfu, Wei Jianjun, and Zhu Huarong have exchanged sharp words, emphasizing the need for rationality and bottom lines in pricing strategies. Many believe that while price competition is acceptable, it must be conducted within reason and with limits. Concessions can be made, but they cannot be sustained indefinitely. A research report from a certain institution predicts that China's NEV price wars will ease starting from the second half of the year, with competition likely to be concentrated among a few major players rather than across the entire industry.

However, even if major players have the capacity to continue price wars, there may not be much room for further discounts. For NEVs, the current price of lithium carbonate remains stable at around 90,000 yuan per ton, and battery costs have decreased significantly and stabilized, leaving limited room for price reductions. Even for a strong player like BYD, which has integrated upstream and downstream operations, there is still some room for cost savings, but expectations should be tempered. For gasoline-powered vehicles, the discount rate reached 19.7% in May, which is already at a historical high, and some models may have seen their gross margins turn negative.

The market has now reached a stage where the pricing system is being reshaped and stabilizing.

People's Auto Review

In the long run, the auto market cannot sustain high-intensity price wars indefinitely and must eventually return to competition based on technological innovation, product quality, and other factors. When we say that some brands are exiting the price war, it does not mean that price wars will cease altogether but rather that the intensity of price cuts is decreasing, and reckless price competition must change. After all, the central government has made it clear that "convoluted and vicious" competition tactics will be the primary target in the future market.