The internal competition of new energy vehicles is escalating, and the price war is getting higher and higher. This may not be a good thing.

The automotive industry is undercurrent, with price wars coming one after another and selling prices continuing to fall. In order to increase traffic, the heads of car companies are constantly verbally attacking each other.

The crazy internal competition has brought a chill to the entire industry.

Huawei CEO Yu Chengdong recently called for increasing value rather than price;

Bosch President Xu Daquan pointed out that some manufacturers are desperately trying to cut down on purchasing costs in order to fight price wars, and even choose some low-quality parts to pass off as good ones;

Zeng Qinghong, chairman of GAC Group, said that price wars must be rational and have a bottom line, and should not be excessive;

Li Ruifeng of Great Wall Motors even stated at the Haval H6 launch conference that some manufacturers were "cheating" in the competition.

These remarks include concerns about the industry's prospects, advice on industrial development, and also gunpowder aimed at competitors.

Obviously, when volume has become the main theme of China's new energy vehicle industry, the fierce competition for existing market share will inevitably generate a lot of inexplicable anxiety, which in turn has caused differences in the understanding of development models among the major players.

Involution is synonymous with “fierce competition”. The development of China’s new energy vehicle industry initially needed “involution” to drive it. But everything is too much, and if involution goes too far, it will backfire on the entire industry.

The competition among automobile manufacturers should be multi-faceted. Some rely on appearance, some rely on intelligence, and some rely on power systems. Each has its own way of survival, and a healthy ecology is one where a hundred flowers bloom.

But in the past year or so, several rounds of price wars have broken out in the domestic new energy market, and "low price" seems to have become the only criterion for consumers to evaluate a new energy vehicle. I will buy the one with the lowest price.

In other words, what was originally supposed to be a multi-level and multi-faceted competition has now been simplified into a simple and crude price competition. Other product competitive advantages such as brand appeal, channel construction, after-sales service, etc. have been forgotten by manufacturers.

When the product evaluation criteria are reduced to only one dimension, price, the entire system has actually ceased to exist, and the ultimate consequences will still be paid for by society and consumers.

First of all, when manufacturers only compete on price, many personalized and differentiated car models will disappear, and consumers’ choices will be narrowed.

Secondly, frequent price wars will severely squeeze the profit margins of manufacturers, making it impossible for them to make continuous R&D investments. It often takes several years and a huge amount of money for a manufacturer to develop a new car that is not a facelift. It takes a long sales cycle to recover the cost and start the next round of R&D.

But now there are too many price wars, and the prices of some models have broken through the cost line of car manufacturers. The country has been encouraging manufacturers to conduct independent research and development, but if this behavior becomes extremely risky, it will inevitably dampen the enthusiasm of car manufacturers. In the long run, it will be extremely detrimental to the entire industry.

Finally, and most importantly for consumers, excessive internal competition and price wars will inevitably lead to cutting corners and selling inferior products as good ones. In order to outlast the fried dough sticks fryer next door, a sesame seed cake that costs one dollar starts to sell for 80 cents. Do you think it's edible?

Involution is the cause, and bad money driving out good money is the result. If this continues, not only will consumers suffer the consequences, but the large market for domestic brands that has been hard to establish will also suffer.

Many people should still remember that domestic motorcycles once had brilliant achievements in the Southeast Asian market, but eventually Japanese manufacturers regained the mainstream because excessive price wars led to a sharp decline in product quality.

However, from an objective point of view, we do not need to regard involution as a complete disaster. New energy vehicles are still new things so far, and it is normal for various chaos to appear. As long as they are corrected in time, they can be corrected in time.

What we oppose are those excessively low prices that violate the laws of industry development, and those manufacturers who ignore product quality and do not pay attention to after-sales service.

It can be said that manufacturers with weak strength are most afraid of fierce competition. Some manufacturers who are currently "crying out" cannot make a living even without price wars, the most typical example being some joint venture brands. They have not upgraded for seven years, have low configurations and high prices, bully customers with their big stores, and are slow to realize the trend of new energy. Their problems are not caused by "involution", but are brewed by themselves.

In addition, some domestic manufacturers who regard marketing as their core competitiveness and like to hype strange and bizarre concepts also need to be eliminated through internal competition, just like the internal competition in the mobile phone industry eliminated a large number of copycat phones.

What we encourage are brands that engage in normal competition in accordance with the laws of industry development. Those manufacturers who hope that industry competition will stop and wait for themselves will be eliminated in any market environment, even if they do not compete on price but on technology.

The current internal circulation is gradually getting out of control, but overall, the entire industry is still positive, the technical level is constantly improving, and product performance is gradually improving. In May 2024, domestic new energy sales reached 804,000 units, a year-on-year increase of 38.6%, which is a recognition of the new energy vehicle industry by consumers.

To rectify the chaos in some industries, timely action is needed at the policy level, and domestic leading manufacturers are also required to set an example and work harder on service levels, product defect recall systems, etc. Price wars can be fought for a while, but they can go on forever and no one can get away alive.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.