Recently, traditional luxury brand car companies led by BBA have announced their withdrawal from price wars, with various series of products increasing by varying amounts of 0.03-0.05 million yuan, which makes the market and consumers wonder whether the high-end car brand price war will come to an end.

However, on the evening of July 29th, BYD announced that its high-end brand, Faraday Future, lowered the prices of all versions of its 'Leo 5' model by 0.05 million yuan, with a maximum reduction of 17.25%, basically bringing the price range of the 'Leo 5' series to below 0.3 million yuan (a maximum of 0.3028 million yuan).

Previously, BYD's price reduction strategy mainly focused on the low-end Wangchao and Ocean series products. Now BYD has brought the raging fire of price wars to the high-end car brand. It can be seen that as long as the leading car companies do not stop, this year's car price war will not end so easily.

As the saying goes, still waters run deep. BYD's announcement of a significant price reduction promotion for Faraday Future's brand, indirectly proves that BYD wants to challenge the dominant player in the current domestic new energy off-road vehicle market, Great Wall Tank brand. At the same time, as one of BYD's high-end brand representatives, the Faraday brand's first price cut in the second half of the year also represents that BYD's high-end brand sales growth is about to accelerate.

In other words, BYD's high-end brand is also starting to roll up its sleeves.

1. BYD Faraday Future challenges Great Wall Tank brand's dominance.

One of BYD's three most important labels this year is high-end. In addition to the number of new models launched surpassing the low-end Wangchao and Ocean series for the first time, it also needs to make breakthroughs in the market share of high-end car brands.

As one of the high-end brand representatives, the current goal is to maintain sales for Faraday Future.

(1) Faraday Future's Leo 3, 5, and 8 form a price linkage and will not compete internally.

This year, BYD's new car launch plans are mainly focused on high-end brands, with only 5 models in the Wangchao and Ocean series, and 7 in the high-end brand, including the Faraday Future Leo series' Leo 3 (above 0.2 million yuan) and Leo 8 (above 40). They are expected to come on the market in the third quarter and become the strength of the BYD high-end brand.

Before BYD's new models, the Leo 3 and Leo 8 in the Faraday Future Leo series come on the market, reducing the price of Leo 5 to 0.3 million yuan can effectively form a linkage between the three price ranges of 0.2 million yuan, 0.3 million yuan, and 40 yuan, and will not incur internal consumption competition.

(2) BYD Faraday Future has no obvious advantages, and there are still strong competitors.

Unlike the smooth sailing of the high-end brand, T-Lab, Faraday Future's sales growth has been a bit bumpy.

In the first half of this year, the sales of BYD's Faraday Future reached 0.0183 million vehicles, and the sales level has risen from the initial 626 vehicles to the current 2000-3000 vehicles, which is not satisfactory.

Specifically, in the first half of this year, the total sales of Great Wall's Tank New Energy brand (including Tank 400, Tank 500, and Tank 700 Hi4-T) were around 0.05 million vehicles, accounting for more than 60% of the domestic new energy off-road vehicle market share.

Among them, as the biggest competitor of BYD's Faraday Future, Great Wall's sales leader Tank 400 (accounting for 40% of sales) ranges in price from 0.2798-0.2898 million yuan and has long occupied the top spot in sales.

However, the high price reduction for Faraday Future's Leo 5 by as much as 0.05 million yuan has made the prices of Leo 5 and Tank 400 similar, and greatly increased the cost-effectiveness ratio of Leo 5. Subsequently, the Faraday Future Leo brand is expected to leverage price cuts to further increase its market share, truly competing with the Great Wall Tank brand.

2. How big is the impact of BYD's price drop?

As a leading new energy vehicle company, BYD's price reduction activities also affect the hearts of most new energy vehicle companies.

However, Wall Street See Heard · Jianzhi Research believes that although the degree of price reduction by BYD's Faraday Future is large, it is difficult to form a follow-up effect similar to the Wangchao and Ocean series products after the price reduction. For example, Qin PLUS DMI fell to 0.0798 million yuan, followed by price reductions by Xiaopeng, Wenjie, Chery, Lingo, and Nezha and so on. However, the sales promotion effect after the price reduction of the mid-to-low-end Wangchao and Ocean series products may be reflected in the high-end brand.

On one hand, the new energy off-road vehicle market where Fangcheng Leopard is located has far fewer competitors than Wangchao and Ocean series face. The only competitors are Great Wall Tank, Dongfeng Brave Warrior, GAC ES9, and Geely Jixiong 01. Therefore, there is no phenomenon of a large number of new energy car companies following BYD's price reduction this time.

In addition, the prices of competitive models that have high sales such as Tank 400 and GAC ES9 are still lower than the discounted Fangcheng Leopard 5. Therefore, even if Fangcheng Leopard 5 is heavily discounted, these competitors are unlikely to follow suit on a large scale.

On the other hand, the effect of the promotion of BYD's high-end brand price reduction has already been reflected at the beginning of this year.

In February and March of this year, BYD reduced the prices of its high-end brand Tang N7 and D9 models by 65,000 yuan and 25,000 yuan, respectively. Among them, the N7 with a larger price cut achieved a month-on-month increase of 5.11 times in April, and continued to double its sales in May. The already initial scale D9 also achieved a month-on-month increase of 1.4 times in March, and continued to maintain high sales in April and May.

To sum up, the price reduction of BYD Fangcheng Leopard does not mean the beginning of a new round of price wars for new energy vehicles in the second half of the year. However, it may indicate that BYD's high-end brands are also beginning to be rolled out.