China Auto Manufacturers_ Expert’s Take on New EV Orders; 4Q24_25E Auto Market Outlook

Summary of the Conference Call on China Auto Manufacturers Industry Overview - The conference call focused on the Chinese auto manufacturing industry, particularly electric vehicles (EVs) and new energy vehicles (NEVs) [11][28]. Key Points and Arguments 1. Order Intake Trends: - Overall order intake for the auto industry showed solid growth of 5-10% week-over-week from November 4th to 10th, 2024, indicating a positive trend in consumer demand [11][13]. - BYD's order intake for the same period was between 110,000 to 115,000 units, with a month-to-date total of 150,000 to 160,000 units, expected to exceed 500,000 units for November 2024 [13][17]. 2. Production Capacity and Market Dynamics: - Production capacity is anticipated to be a critical factor for order intake, especially for mainstream models priced below RMB 200,000, as consumers aim for delivery before the end of 2024 to benefit from old-for-new subsidies [11][13]. - The penetration of Advanced Driver Assistance Systems (ADAS) in the mainstream market is expected to influence purchasing decisions significantly in 2025 [11][28]. 3. Individual Company Performance: - Li Auto: November 2024 order intake was 19,000 units, with expectations to reach 60,000 units by the end of the month [13]. - Nio: October 2024 order intake was 18,000 to 19,000 units, affected by a RMB 10,000 incentive cut. Orders rebounded to 5,000 units in the first week of November [13][19]. - Xpeng: Last week's order intake was 45,000 units, with expectations to exceed 30,000 units in December 2024 [13][16]. - Huawei Harmony: Recorded 9,000 to 10,000 units in the last week, with the Luxeed R7 accumulating 30,000 orders, surpassing its production capacity [13][19]. - Zeekr: Last week's order intake was 5,500 units, with expectations to exceed 20,000 units in November and December [13][19]. - Leapmotor: Last week's order intake was 10,000 units, with expectations for both C10 and C16 models to achieve 10,000 monthly sales in December [13][18]. 4. Market Competition and Pricing Strategies: - A year-end price war is deemed unlikely due to a healthy order backlog across the sector, with OEMs focusing on timely deliveries rather than discounts [19][35]. - The average trade-in car prices are currently between RMB 170,000 to 180,000, potentially exceeding RMB 200,000 in top-tier cities [31]. 5. Future Outlook: - NEV penetration is projected to reach 65-70% by mid-2025, primarily at the expense of traditional luxury and joint venture brands that lack adequate NEV offerings [29][30]. - The expiration of local trade-in subsidies may lead to a seasonal dip in sales in January 2025, but a rebound is expected by the end of March due to new model launches [19][20]. Additional Important Insights - The shift of large dealership groups towards NEV brands indicates a growing concern about the future of internal combustion engine vehicles [29]. - Companies like Geely and Changan are adopting focused strategies to challenge BYD's dominance, particularly in the sub-RMB 200,000 segment [32][33]. - The competitive landscape is evolving, with brands like Li Auto needing to adapt to pressures from rivals while maintaining their market position [46]. This summary encapsulates the key insights from the conference call regarding the current state and future outlook of the Chinese auto manufacturing industry, particularly in the context of electric and new energy vehicles.