New Energy Vehicle Channel Development in 2022-2023

Zhang Lei said that my country's new energy vehicle market is growing rapidly, and production and sales have ranked first in the world for many consecutive years. In 2022, my country's new energy vehicle sales will be close to 7 million, achieving a nearly 100% doubling growth, and the penetration rate will exceed 25%. In addition, domestic brands occupy 80% of the new energy vehicle market. In this case, the rapid growth of new energy vehicles will have a far-reaching impact on the automotive channel network.

Zhang Lei introduced that the automobile channel network moves with the market. After many evolutions, the distribution model has become popular, and authorized 4S stores have become the mainstream of the current channel network. The core function of the channel network is to sell automobile products to consumers, so the channel must meet the needs of consumers. With the rapid growth of the market, the transformation of new energy vehicle channels has also followed, and there are many breakthroughs and innovations compared with traditional automobile channels.

At present, independent channels for new energy vehicles are the mainstream. Compared with the shared network sales with fuel vehicles, independent channels have more prominent service professionalism and channel innovation. Among independent channels, domestic brands occupy the vast majority. Currently, there are 35 brands in domestic independent channels, and most of them are domestic brands.

The innovation and transformation of new energy channels mainly occur in independent channels, and the changes in channel models and channel forms are the two main changes. In terms of channel models, the direct sales model has emerged, that is, manufacturers directly sell vehicles to consumers instead of wholesale vehicles to dealers, which can be divided into direct sales and agency models. In terms of channel form, "large and comprehensive" has changed to "specialized and refined", and the functions of traditional 4S stores have been dismantled and separated into multiple independent service outlets, making the channel layout more flexible.

Zhang Lei pointed out that as of the end of 2022, the number of independent channels for new energy vehicles exceeded 15,000, doubling in scale compared to 2021, which complemented the nearly doubled sales volume.

In the independent channels for new energy vehicles, domestic brands performed well, contributing more than 90% of the channel scale. On the one hand, there are many new energy brands of domestic manufacturers, and on the other hand, the channel network scale of each brand is also large. Representative brands include BYD, Ideal, Aion, Leapmotor, DeepBlue, etc. The scale of independent new energy channels under luxury brands and joint venture brands is still relatively small, and representatives include Tesla, Mustang E, SMART, Volkswagen ID, etc.

Zhang Lei further elaborated on the transformation of the channel model. The three channel models are authorization, agency, and direct sales. Manufacturers are investing more and more in channels and have stronger control over them. The direct sales and agency models represented by new car-making forces have been accepted by the industry and consumers, and as the market develops, the new models have also been imitated by subsequent brands.

According to the calculation of independent new energy brands, the authorized model accounts for the largest proportion of their sales channels and contributes the most to sales, both exceeding 60%. As an emerging model, the rapid development of direct sales and agency models has also achieved remarkable results.

Showrooms/experience centers that focus on sales and services constitute the main body of independent channels for new energy vehicles, and the traditional 4S store format is no longer the mainstream. Showrooms/experience centers focus on sales and services, with small venues and streamlined staffing. The investment is lower than that of traditional 4S stores, and their construction pace is faster than that of traditional 4S stores.

New energy supermarkets refer to new energy showrooms/experience centers located in urban shopping districts, accounting for nearly 70% of all showrooms/experience centers. New energy supermarkets are obviously concentrated in high-tier cities, with first-tier and second-tier cities accounting for more than 60%, which is to some extent related to the restrictions brought about by their location requirements.

As the transformation of new energy vehicle channels deepens, both manufacturers and channel operators will face new challenges in terms of channel model and channel format.