A major breakdown of the segmented car model is undergoing a new test.

　　The story of the Chinese car market is constantly repeating itself.

　　Once upon a time, independent brands entered the homes of ordinary people with micro cars such as Geely Panda, Chery QQ, Changan Benz, and BYD F0. The success of these cars also became a gentle soil for several independent brands to thrive. Subsequently, independent brands continued to break through, and now the appearance of these brands is well-known.

　　As the new energy era surges forward, all the behavioral norms and ecological models of the old era begin to be restructured. At present, many car companies still have not found the answer to how the era of electrification should proceed. But the only law that can be found is to meet consumer demand from low to high, based on market demand, just like in the era of gasoline vehicles.

　　The first person to perceive this trend was Wuling, who had been familiar with the sinking market for many years. That year, Wuling Hongguang MINIEV was born, and under the conditions of "favorable timing, location, and harmony", it became popular throughout the country and entered ordinary people's homes. Those who rush forward are the first, while those who follow the trend are the majority. Since then, countless A00 level electric vehicles have come one after another.

　　At a time of confusion over electrification transformation, top independent brands are also following suit. Chery QQ ice cream, Changan Benz EV, and Geely Panda Mini, all of which have revived the names of ancient car models and added new energy naming methods, have re occupied the most basic consumer market. In this battle, the top independent brands have achieved phased success again.

　　A0 level replaced

　　In fact, as the most basic means of transportation, whether it is the era of fuel vehicles or the era of new energy, micro cars will eventually face a cruel reality. That is the saturation of market share that will be visible to the naked eye, and micro cars will always be just a springboard for car manufacturers, and there can be no breakthrough performance.

　　Nowadays, the A00 electric vehicle has also reached the bottleneck, and many models have also left. According to data, 2021 was the most prosperous year for A00 pure electric passenger vehicles, with annual sales reaching 898500 units, accounting for over 30% of new energy vehicle sales, making it the largest single segment category.

　　However, after experiencing rapid growth in 2021 and 2022, the A00 and A0 class electric vehicle markets have begun to rapidly decline this year. According to data from the China Railway Association, the cumulative sales of A00 pure electric vehicles from January to April 2023 were 175000 units, a year-on-year decrease of 50.5%. The growth rate has underperformed the overall new energy market, and many models that had previously sold well have also left the market in despair.

　　Taking the 12 A00 and A0 electric vehicles with sales exceeding 1000 in April as a reference, the total sales of these models in the first four months of this year decreased by 4.2% year-on-year. Former leaders such as Hongguang MINI, Chery QQ Ice Cream, Roewe Kolewe CLEVER, and Changan Benben E-Star suffered heavy losses.

　　And the low-end products such as Reading Mango, Punk Duoduo, and Guojizhijun GC series, which are catching up with the trend, now have no sales data. Among them, it is worth mentioning that the former "Old Man Le" brother, Redding Automobile, which transformed into a micro electric vehicle, directly declared bankruptcy, further exacerbating the chill in the segmented market.

　　Ping An Securities believes that from the perspective of the new energy vehicle segment market, the A00 level market has basically completed the penetration of new energy, and the market volume may tend to stabilize. When a market begins to stabilize, it indicates that market demand tends to be saturated. As consumption upgrades, new segmented markets begin to explore and become new growth points.

　　The three door four seater/five seater micro cars represented by Wuling Hongguang MINIEV, Chery QQ Ice Cream, and Geely Panda Mini can no longer meet the new consumer demand. Along with it, the A0 class electric vehicles with five doors and five seats are beginning to show a trend of growth. From a functional perspective, A0 level cars are actually more suitable for electrification.

　　This time, Lunzhuang's brand is no longer Wuling, which is rooted in the lower tier market, but BYD, which has soared with new energy vehicles. The appearance of BYD Dolphins has completely stirred up the waters of A0 electric vehicles. This 100000 level pure electric car has won the A0 level sedan sales championship for 16 consecutive months as of April, which is truly envious of others.

　　And other car companies are not idle either. Euler Haomao, Dongfeng Nano BOX, Jiangnan U2, Jianghuai Yttrium 3, Jihu Kaola, Wuling Binguo, and other new and old players have joined forces, helping to rapidly increase the size of the A0 level electric market. There is reason to believe that A0 level pure electric cars are expected to experience a major explosion in 2023.

　　The increase in car models is only one aspect, and from sales data, the potential is equally unlimited. In April, A0 level wholesale sales reached 154000 units, accounting for 35% of pure electric vehicles, an increase of 14 percentage points year-on-year. Moreover, from the monitoring of retail data in overseas markets that independently export, A0 electric vehicles account for 60%, making them the absolute mainstay of exports.

　　So go to the countryside?

　　Will A00 level electric vehicles sit idly by when faced with the threatening A0 level electric vehicles? Multiple car companies have provided answers that everyone did not expect. As the lowest priced A00 electric vehicle in the automotive market, it has entered a new round of internal competition and engaged in a "price war" in the face of a cold market segment.

　　On May 22nd, SAIC GM Wuling announced that the guiding price of the Wuling Hongguang MINI EV family would be lowered by up to 13000 yuan, with a starting price of 29800 yuan for the MINI EV family. After this price adjustment, the Hongguang MINI EV has returned to the era of 20000 yuan, once again setting the lowest price benchmark for electric vehicles on sale.

　　Not long ago, the official price reduction poster released by Changan Automobile on May 11th showed that its mini electric vehicle Lumin (glutinous corn) had an annual release, with a maximum discount of 10000 yuan. After the discount, the price was 399-61900 yuan.

　　Earlier, Chery New Energy announced that it will officially adjust the official guidance prices of its vehicle models starting from midnight on March 27, 2023, benefiting from the global price correction of new energy raw materials, as well as the improvement of enterprise cost control and supply chain management capabilities. Among them, QQ ice cream was reduced by 4000 yuan, and Chery Ants was reduced by up to 9000 yuan.

　　Including the official announcement by Dongfeng Nano that due to the global price correction of new energy raw materials, in order to benefit the majority of users, starting from midnight on April 9, 2023, the prices of its models will be officially adjusted. The price of the standard version of the Nano EX1 PRO Light Wind Edition has been reduced by 6000 yuan, while the price of the entire Nano BOX series has been reduced by 5000 yuan.

　　Each car company has their own reasons for lowering prices. Taking Chery New Energy and Dongfeng Nano as examples, both point to a correction in raw material prices. In fact, after a continuous downward trend for six months, lithium carbonate prices have recently experienced a strong rebound. In less than a month, the price of battery grade lithium carbonate has increased from 180000 yuan/ton to 300000 yuan/ton.

　　So will these car companies that adjust prices based on raw materials increase prices again? The answer is unknown. So Wuling should be even more fortunate that its price adjustment has been strongly linked to the recent hot topic of new energy vehicles going to the countryside. So can new energy vehicles go to the countryside and really make A00 level electric vehicles popular again?

　　According to statistics from Guosheng Securities, as of December 2022, the penetration rate of new energy vehicles in first tier cities reached 42%, and the penetration rates from new first tier cities to fifth tier cities were 32%, 28%, 26%, 20%, and 15%, respectively. From the perspective of market volume, the lower tier market has broad growth potential.

　　The China Railway Association also stated that with the increasingly clear policy direction of new energy vehicles going to the countryside, the development potential of economic electric vehicles will gradually be reflected. In the future, with the improvement of basic charging facilities, affordable electric vehicles will inevitably resume their explosive trend with the increasing demand for middle-aged and elderly consumers in counties and townships.

　　Another positive news is that many parts of the country are starting to rectify "Laotou Le", and the restrictions on "Laotou Le" should provide opportunities for the development of micro electric vehicles. Regular micro electric vehicles can effectively replace "Laotou Le" low-speed cars. To develop new energy vehicles on a large scale in rural areas, the first thing to do is to eliminate the previously popular "old man's joy".

　　Ultimately, there are still many issues that need to be addressed before new energy vehicles are officially launched into the countryside. And overall, the new energy vehicle market in rural areas of China is still in its infancy, with a relatively low total ownership. Problems such as insufficient charging infrastructure construction, insufficient supply of economical and practical vehicle models, and insufficient sales and service capabilities have constrained the promotion and use of new energy vehicles.

　　Nowadays, the A00 level electric vehicle has reached a crossroads. How should I go? No one knows, we can only rely on car companies to explore on our own.