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BAIC x Huawei flagship sedan Stelato S9 is set to debut at the Beijing Auto Show with an expected debut in June and a starting price of 500,000 RMB. The S9 shares a similar design language to the Luxeed S7 (Chery x Huawei). This vehicle will be BAIC's first model as a member of the Harmony Intelligent Mobility Alliance (HIMA). The second HIMA flagship sedan, after Luxeed S7 HIMA currently features four partners, including AITO (Seres), Luxeed (Chery), Stelato (BAIC BluePark), and JAC Motors. The Stelato S9 will be HIMA's second and most expensive sedan model. BAIC BluePark is a subsidiary of the state-owned enterprise BAIC Group and operates brands such as Arcfox and EV models of BAIC, branded as either BJEV or Beijing. Appearance-wise, the Stelato S9 is equipped with electronic external mirrors and a more luxurious overall styling. According to public information released by the Ministry of Industry and Information Technology (MIIT), the S9 comes in two battery capacities, 79.9kWh and 97.6kWh, with a CLTC range of 672 km, 816 km and 665 km, respectively. The 665 km version is the dual motor four-wheel drive version. The range is comparable to the ET7 100kWh version with 675 km CLTC. The Stelato S9 measures 5,160mm in length, 1,987mm in width, and 1,486mm in height, with a wheelbase of 3,050mm. The vehicle is equipped with a Huawei electric motor with a peak power of 227 kW on the RWD version and 158 kW + 227 kW (total of 385 kW) on the dual-motor version. For comparison, the ET7 dimensions are 5,101/1,987/1,509mm with a wheelbase of 3,060mm and front + rear motor peak power of 180 kW + 300 kW (total of 480 kW). Can HIMA help SAIC compete in the 500k segment? In the pure electric segment, the Stelato S9 will compete with the NIO ET7, Mercedes-Benz EQE and BMW i5, starting at 428,000 RMB, 478,000 RMB and 439,900 RMB, respectively. In 2023, the ET7 and EQE sold 5,643 and 8,779 vehicles, respectively. It will certainly be interesting to see if the Stelato S9 can carve a significant share of this flagship BEV segment. Electrification has yet an answer for BBA premium executive segment However, just like the NIO ET7, the Stelato S9 has its sights on the BBA combustion engine market, which is still heavily dominated by the likes of the BMW 5 Series, Mercedes-Benz E-Class and Audi A6L in the flagship executive sedan segment. Sales volume of the three BBA models hovers around the 30,000 level monthly and no premium EV models have been able to carve a sizeable share.

Luxeed S7 facelift was revealed alongside Huawei's latest MateBook X Pro on April 11, 2024 at the Huawei HarmonyOS Eco Spring Communication. This facelift comes 4 months after Luxeed S7's initial market launch in November 2023. Unlike most of the competition though, the S7 retains the same price range, launching with 5 model variants, ranging from 249,800 RMB to 349,800 RMB. The base model receives a major battery upgrade from 62 kWh to 82kWh. The Luxeed S7 is the first sedan model of the Harmony Intelligent Mobility Alliance (HIMA), which is manufactured by Chery. Seres Group (AITO), BAIC BluePark (Stelato), and JAC Motors are also members of HIMA. Huawei adopts three tiers of partnership and HIMA is the most integrated level of collaboration (Tier 3). The second tier involves having Huawei hardware and software integration, or so-called "Huawei Inside" (HI), with Arcfox, AVATR, and Voyah adopting this model currently. The first tier revolves around Huawei as a standardized parts supplier of Lidar, electric motors, cameras and power management. Given that Chery is a Tier 3 partner, the Luxeed S7 will be equipped with Huawei's vision-based intelligent driving system called HUAWEI ADS. The S7 will not rely on LIDAR nor high-precision maps and the ADS can be used in over 40,000 urban and rural roads across China with success rates of as high as 99.2%. Other features include intelligent parking, valet parking, and remote control parking. Stark contrast to the Xiaomi SU7 debut Debuted in November 28, 2023, Luxeed has yet replicated the success of AITO and much of that is allegedly due to delivery issues. Within a month of its debut, pre-order volume had exceeded 30,000 units. However, the ultra-competitive automotive market in China leaves no room for complacency. Due to prolonged wait times, many customers have explored cancellation or order transfers. March 2024 retail sales rose to 3,197 from sub-800 monthly unit sales since launch. However, the bulk of these retail sales are made to "dealerships", such as HIMA centers, Huawei experience and flagship stores. Since debut, Luxeed sold a total of 5,494 vehicles, well under the pre-order numbers. Moreover, the S7 sales' are a stark contrast to the Xiaomi SU7, which has not only secured 90,000 orders within 24 hours of launch, but has already sold 1,093 units from April 1 to 7. Weekly insurance registrations rose significantly prior to the official facelift launch on April 11 as Luxeed registered insurance to test drive cars. Currently, HIMA is set to open 800 stores in 78 cities in 2024. First Week-End Pre-Orders According to HIMA, 2,079 Luxeed S7 were sold through the first week-end on sale from April 13-14. While these numbers are not nearly as impressive as the Xiaomi SU7's, considering the intense market competition at this price level (ZEEKR 001/007, Xiaomi SU7, Tesla Model 3, AVATR 12, and XPeng P7), the Luxeed S7 facelift seems to have garnered decent traction.

BYD's higher-end brand named Denza is about to launch the Z9 GT, a new electric station wagon at the Beijing Auto Show on April 25. The new car is currently undergoing testing in Stuttgart, Germany. The Z9 GT exterior was designed by BYD's Global Design Director Wolfgang Egger and his team. Notably, Egger was the design director of the Audi brand. The Z9 GT will likely be sold globally, accelerating the brand's international ambitions. According to Denza's Sales Division General Manager, Zhao Changjiang, the X9 GT is leaps and bounds ahead of cars in its class, in terms of interior spacing, smart features, ride comfort, acceleration, and handling. He claims that the X9 GT is even superior to the Porsche Panamera and the Mercedes-Benz S-Class. The X9 GT allegedly scored a new world record, close to 90km/h, in the "moose test", which is a dynamic safety test to evaluate a vehicle's ability to swiftly maneuver around obstacles on the road, such as a moose, at high speed. For reference, as of June 2023, the best moose test score achieved by the Citroen Xantia Activa V6 was 85km/h followed by the 2023 NIO ES6 at 84.08 km/h. The new Xiaomi SU7 joined the Top 10, scoring 82km/h. The X9 GT turning radius is also believed to be sub-10 meters, compared to 11.6 meters for the Tesla Model 3. An MPV Success Story In China, the Denza brand has largely been successful in only the MPV segment, with the D9 Dm-i (PHEV version) and the EV version. The Denza D9 starts at 339,800 RMB and is the most expensive model of the three. The two other models are SUVs, the N7 and N8. However, both SUVs have not yet garnered significant traction, with the N7 plateauing at 1,810 vehicles sold in September 2023 and have since dipped to only 294 units in February 2024. Faceoff with ZEEKR 001 and NIO ET5T in the Domestic Market While management has been benchmarking the X9 GT against German luxury vehicles, it will likely directly compete against the ZEEKR 001 and NIO ET5T in the Chinese . Competition remains relatively scarce in the station wagon segment. However, ZEEKR was the first to prove that wagons can sell well. ZEEKR launched a facelift of the 001 and has received over 30,000 firm orders in its 1st month on the market, once again reflecting its overwhelming popularity. Another evidence of station wagons' growing appeal is the ET5T's popularity over its sedan sibling the ET5, outselling the latter by an approx. 3:2 ratio.

Li Auto is set to launch its first below 300,000 RMB vehicle, the Li Auto L6. The Li Auto L6 is yet another Chinese mass-market SUV challenger to the Model Y and the Huawei-backed AITO M7. The L6 is expected to start at 249,800 RMB or even lower due to the current market condition. At this price, the L6 will for the first time directly target the Tesla Model Y, which is priced at 263,900 RMB. Li Auto recently re-adjusted its annual guidance from 650,000 - 800,000 vehicles to between 560,000 - 640,000 due to lower-than-expected order intake of its L-series and the new MEGA MPV. Direct Response to AITO and Tesla The Li Auto L7 sales have trailed the AITO M7 since the start of 2024, partly due to the latter being an equally potent EREV SUV with dimensions falling in between the L7/L8 with a starting price nearly 50k below the L7. In week 5 of 2024, AITO M7 even outsold the Tesla Model Y. The L6 will level the field at a price point that is comparable to the M7 and Model Y and Li Auto expects monthly sales of 30,000. New Model, Same Design The Li Auto L6 is a scaled-down version of the L7, featuring the family design front face, panoramic sunroof, and hidden door handles - all proportionately scaled down from the L7. However, subtle differences can be seen, such as a slight adjustment to the continuous light strip on the front face, making it finer and longer. Additionally, the integration of the L6's lidar appears to be more "integrated" across the roof than the L7's more "bulky" appearance. To reduce costs, the L6 may be the first model adopting an LFP battery and a single motor. New Target is Much More Realistic As most of us know, the automotive industry is highly seasonal and in China especially, the first quarter is further impacted by the Chinese New Year. For this reason, falling behind annual target sales in the first half of the year is largely expected. However, comparing Li Auto to other automakers and their respective targets gives a fuller picture. For example, Li Auto has sold 80,401 vehicles as of March 31, 2024, which is only second to AITO's 83,723 units sold. Both are behind schedule by 42-44% which is in line with other brands. XPeng is falling behind XPeng has struggled significantly in Q1-24, mainly due to the amount of competition bolstered by an aggressive price war in China. New model launches such as the BYD Song L have dramatically hurt the mass market model XPeng G6. Recent vehicles such as the ZEEKR 007 and the Xiaomi SU7 further hamper demand for its once-popular XPeng P7 sedan model. XPeng is now 68.8%, or 48.2k units behind its sales target of 280,000.

SAIC's IM Motors announced on March 18 that the IM L6 will be launched in May, set to become the world's first 1,000km semi-solid state battery production car. The IM L6 will boast a remarkable 2-second acceleration and will feature a new smart chassis that enables "crab walk" seen in higher-end vehicles like the Yangwang U8 or the GMC Hummer EV. The L6 succeeds the larger L7, a premium BEV sedan initially priced above 400,000 RMB, eventually adjusted to below 300,000 RMB to stimulate sales volume, but to no avail. Sales remained disappointing, with only one unit sold in January 2024. IM Motors launched the IM L7 facelift on February 24, but sales remain stale. For February, retail sales reached 114 units. However, insurance registrations show only 37 units sold for the month and weekly sales since the facelift has not exceeded 13 units a week. With the IM L6 anticipated to debut at around 200,000 RMB, its prospects remain uncertain as even its once successful SUV sibling, the IM LS6, is now also struggling to garner traction due to the BYD Song L. Overall sales for IM Motors have been in rapid decline since the strong year-end, having reached 10,412 total sales in December. Despite the end of the Chinese New Year, there has been no sign of sales recovery based on weekly insurance registrations. The market is extremely competitive, but in our view, the L6 may offer a glimmer of hope to its parent company SAIC. Based on disclosed specifications, the rear-wheel-drive version is set to feature two types of electric motors with three tuning options, offering a max. power output of 216kW and 248kW/300kW. The dual-motor version will boast a combined power of 579kW, enabling a 0-100km acceleration in just 2 seconds. The IM L6 will also feature a 900V (875V) high-voltage platform and semi-solid state battery, enabling a pure electric range that exceeds CLTC 1,000km. It's anticipated that the chassis will retain a combination of front double wishbone and rear multi-link independent suspension, enhancing sports handling with wider tires of 245/45 R19 for the front and 275/40 R19 for the rear. The IM L6 maintains the family's sporty design, seen in its L-shaped headlights and large lower grille resembling supercars. It features stamped body panels with sharp lines and diverse wheel hub styles. Additionally, it boasts four-piston brake callipers concealed in the wheels and a tail wing integrated with angled tail lights, enhancing its sporty performance positioning. The rear design of the IM L6 features angled tail lights, enhancing downward air pressure, akin to traditional sports spoilers. The dimensions of the IM L6 measure 4931/1960/1474mm in length, width, and height respectively. With its hatchback body and a wheelbase of 2950mm, the vehicle offers ample cabin space for drivers and passengers. Based on partially revealed spy photos, it's anticipated that the IM L6 will feature a dual-screen setup. The instrument panel and central control screen will merge, while the passenger will have a separate touch entertainment screen. These screens are expected to maintain the current model's dimensions of 26.3 in. and 15.5 in, using OLED and AMOLED, respectively. Additionally, the vehicle may come with a "yoke" steering wheel, along with a wireless charging pad and a lower touch screen. The IM L6 will be equipped with LIDAR and offer NOA intelligent navigation assistance across highways and urban areas.

AVATR 12 was officially launched on November 10 and began nationwide deliveries on December 10, 2023. To date, the AVATR 12 has amassed a total of 40,000 orders. This model has launched three models with different configurations, with a price range of 300,800 to 400,800 RMB. AVATR President Chen Zhuo previously announced that the production target for AVATR 12 this month is 8,000 to 10,000 units, and the delivery volume is expected to reach 8,000 units. As of February 2024, the total delivery volume of AVATR 12 exceeded 7,000 units since launch, having delivered 2.940 in December 2023 and 2,960 in January 2024. Though AVATR 12 has had over 40,000 orders since launch, unless Changan can significantly ramp up manufacturing, many of these orders may be at risk. One-of-one avant-garde design The AVATR 12 offers an avant-garde front face, characterized by a closed grille and a sleek black front lip component. Adding to its appeal are the distinctive split LED headlight clusters, especially noticeable when the "C" shaped daytime running lights are on. The vehicle features a sleek side profile with smooth lines and slightly protruding wheel arches. Bright black decorative strips adorn the window frame, adding to its dynamic appeal, while the concealed door handle and high-definition streaming media exterior rearview mirror showcase its advanced technology. At the rear, an adjustable spoiler and slender tail light enhance recognition. Dimensions include 5,020/1,999/1,460 (1,450) mm in length, width, and height respectively, with a wheelbase of 3,020mm. Huawei Inside AVATR 12 features a 4K panoramic widescreen with a size of up to 35.4 inches screen below the front windshield, offering versatility for various interactive scenarios. The cockpit is also equipped with a 15.6-inch central control screen and side-camera mirror displays, The interior is covered with Nappa leather and ultra soft touch suede roof. AVATR 12 is equipped with 29 intelligent driving sensors, including 3 LiDARs. With the support of the Huawei ADAS 2.0 system, AVATR 12 can achieve intelligent driving without the need for high-precision map support. In terms of power, the single-motor model starting at 300,800 RMB provides a maximum motor power of 230kW. The four-wheel drive model starting at 340,800 RMB of AVATR 12, equipped with the Huawei DriveONE dual motor system, boasts a maximum power of front and rear motors of 95kW and 230kW respectively, enabling a 0-100 km/h acceleration time of less than 3.9 seconds. The new car is equipped with a 94.5kWh CATL battery pack, offering a pure electric range of 650km to 700km. All models in the series are equipped with a 750V full stack high-voltage supercharging platform, which can quickly charge up to 50% (30% to 80% range) in 20 minutes. AVATR Targets 100,000 unit sales for 2024 As of February 2024, AVATR has sold 6,484 vehicles. Like all listed above brands, AVATR is well behind the annual target due to the seasonality effect in the automotive industry, as well as the trough from Chinese New Year. With 40,000 orders of the AVATR 12, the upcoming months are promising.

Through the week 11 of 2024, from March 11-17, we had our first sneak peak of Li Auto MEGA sales, as well as BYD's Denza D9 sales ramp up after model refresh and price reductions. XPeng X9 continues to sell above the 1,000 weekly mark, while nearly all other MPV models have taken a step back. Let's dive into it: This week, new energy MPVs Top 10 sales increased by 62.1% WoW, from 3,542 to 5,741. This is also the fourth consecutive week of sales increase since Chinese New Year. Denza 2024 refresh is taking all MPVs by storm Denza's PHEV version outsold any other MPVs by far, with 2,246 units sold, displacing XPeng X9 from the best-selling NEV MPV position. Meawhile, its pure electric version, the D9 EV only sold 68 units, a stark contrast that reveals buyers' preference. In fact, this is also noticeable in Voyah Dreamer's sales, as its PHEV version sold 642 units while its BEV version only moved 73 units. The D9 DM-i (PHEV version) was orginally priced at 375,800 RMB in 2022, later reduced to 349,800 RMB in 2023, and starts now at only 339,800 RMB. Within just 12 hours on the market after its 2024 refresh release, the D9 had received 11,287 orders, Accoriding to research firm CarFans, 60-70% of the customer base is made up of business users and the majority of customers are above 40 years of age. These customers insist on the PHEV option and often add the option of a ceiling-mounted screen. The most popular trim is the Honorable edition priced at 409,800 RMB, with black exterior paint and beige interior colors. Buyers mostly consider the Voyah Dreamer PHEV as an alternative (c. 30% of buyers), followed by the Li Auto MEGA (c. 20%). The XPeng X9 (c. 10%) is not a strong consideration for Denza D9 buyers, as more customers consider Buick GL8 and AITO M9 (both c. 20%) ahead of it. Li Auto MEGA falls short of expectations In its first official sales delivery week, the MEGA recorded 1,137 vehicles sold, which accounts for approx. 18.4% of the T10 ranking new energy MPV sales. Note that previous weeks' figures are mostly insurance registrations of MEGA test-drive units. Despite falling short from expectations, this is still a very respectable figure, trailling the X9 by less than a hundred units despite its price premium. Li Auto is considering right-sizing its MEGA annual sales target from 80,000 to 50-60k units due to weak initial order volumes. The MEGA received 3,000 orders in the first 24 hours and 4,000 orders by mid-month with an initial production capacity of 5,000 units monthly. To reach 80,000 annual MEGA sales, Li Auto would need to sell approximately 8,000 vehicles per month, considering that sales only begun in early March. According to CarFans, MEGA's main target market is the affluent family, unlike Denza's business users. Despite potential price and/or value proposition overlaps with the Denza D9, ZEEKR 009, and XPeng X9, most buyers (c. 20-30%) tend to consider the Li Auto L9 as an alternative to the MEGA. XPeng X9 continues to sell well XPeng X9 sold 1,137 MPVs, or about 19.8% of the T10 ranking. While this is the third consecutive week of >1,000 unit sales, the X9 is accounting for a declining % share of the T10, from 35.4% in W9 to 29.2% in W10, and 19.8% this week. Petrol MPVs are losing ground When including ICE MPVs in the ranking, we can notice that only 4 of the T10 are internal combustion engines, with two Toyota MPVs in the T5. There are now 2 pure electric MPVs and one PHEV completing the T5 and sales of all ICE MPVs have declined as a % of T10 sales WoW. Toyota Grevia was ranked 3rd four weeks ago and is now 5th, while the higher end Buick Century fell from 6th to 8th. The Buick Century and Mercedes-Benz V-Class sold 253 and 155 units, respectively, both of which pales in comparison to the MEGA sales. It is becoming increasingly clear that PHEV and BEV MPVs are here to replace the legacy MPVs, previously dominated by Toyota and Buick. Note that the GL8 was not included in the ranking due to its low starting price of 227,900 RMB, but is one of the best-selling ICE MPVs of its class that is at risk of losing market share as more new energy MPVs come into this price segment.

In week 10 of 2024, from March 4-10, we noticed major developments in weekly sales. While Tesla continues to dominate all competing pure electric models of the Model 3 and Y, BYD has taken major strides in both of our pure EV Top 10 rankings benchmarking Tesla models. Let's deep dive: Tesla Model Y Benchmarks Top 10 Ranking This week, Tesla Model Y sold 9,839 vehicles, topping previous week's sales and accounting for 67.35% of the Top 10 benchmark models. BYD Song L dominates XPeng and SAIC's IM BYD returned to the 2nd spot with 1,876 unit sold, which is firmly well ahead of its most direct competitors in this list, the XPeng G6 and IM LS6. In fast, since its launch in mid-December of 2023, both the G6 and LS6 sales tanked severely. In the past two months, the Song L's sales volume more than doubled the cumulative sales of the G6 and LS6. NIO ES6 and EC6 in the Top 5 Cumulatively, the ES6/EC6 duo sold 1,034 units, compared to 1,835 vehicles in the previous week. This represents c. 7% of the Top 10, unlike last week's 12.7% share. However, it will be interesting to see the effect on sales from NIO's amended BaaS pricing and other benefits released today. The new monthly rental fee for the standard battery pack is 728 RMB, decrease of 252 RMB or 25.7% from the previous fee of 980 RMB. If a customer opts for the long-range pack under the BaaS model, the monthly fee now stands at 1,128 RMB, a decrease of 552 RMB or 32.86% from the previous fee of 1,680 RMB. Tesla Model 3 Benchmarks Top 10 Ranking In week 10, the top 10 Model 3 benchmark's cumulative sales fell by 5.9% WoW, from 10,210 to 9,607. BYD Han EV leaps over all non-Tesla models While in other international markets the BYD Seal is the Model 3's direct competing vehicle, in China, the Han EV is a much more popular vehicle and is often benchmarked against the M3. This week, the Han EV jumped from 5th to 2nd, with 1,867 in weekly sales, displacing the ZEEKR 007. The Model 3 also had a strong week, with 35% share of the T10 ranking sales. The Han EV refresh in February reduced the starting price from 209,800 RMB in 2023 to 179,800 RMB, a 14.3% price reduction. If we include the Han's PHEV version (DM-i), their cumulative sales total to 3,746, which exceeds the Model 3's sales. ZEEKR 001 refresh The sizeable decline in sales this week, from third to 8th, may be due to the 001 facelift delivery timing. We know that ZEEKR does not have a demand problem as since the refresh launch on February 27, they have amassed over 15,000 pre-orders in only 10 days.

Polestar (NASDAQ: PSNY) announced on March 7 that all trim models of the Polestar 4 ranging from 299,000 to 399,000 RMB will be reduced by 60,000 RMB for a limited time, alongside a buyback option valued at 25,000 RMB. A buyback option guarantees that the customer can sell the vehicle back to Polestar at a predetermined price within a given timeframe. The 60,000 RMB reduction is structured with a 5,000 RMB required deposit to unlock 35,000 RMB in discount and the final payment will be further reduced by 30,000 RMB. This effectively brings down the entry-level single-motor Polestar 4 price from 299,000 RMB to 239,900 RMB, but the offer is limited to 100 vehicles purchased between March 1-31. Moreover, this promotion offers complimentary upgrades valued at 35,000 RMB for the smart driving package, as well as limited-time half-price specials on the Nappa seat upgrade package and on the high-performance package. Why is Polestar discounting its SUV? First, this is unlike recent discounts from Li Auto or NIO, who offered discounts on old models in view of facelift launches. Polestar has not announced a model facelift and has already reduced the starting price of the Polestar 4 from 349,800 RMB to 299,000 RMB in November 2023 by removing out the benefit package. Polestar may be testing the water without fully committing to the price war as Geely's own ZEEKR 001 and 007 are well below the 300,000 RMB starting price mark with more advanced technological configurations in China. However, such a steep discount may leave an anchor effect on future prospective buyers; no one wants to feel cheated by as much as 60,000 RMB. We will likely know whether Geely decides to drastically reduce the Polestar 4 once again to better compete in the mass market in China, as few consumers are willing to pay a premium for handling performance, which is Polestar's main competitive advantage. Polestar 4 China sales are behind its sedan sibling As of March 3, 2024, Polestar has sold 503 vehicles, 276 of which are the Polestar 4. Before this month's limited discounts, both the Polestar 2 and 4 started slightly below 300k RMB. However, sales of the SUV have fallen behind its sedan sibling by a ratio of nearly 2:1. After the Volvo split, Geely set high expectations for Polestar, aiming to break even in 2025 with 155,000-165,000 unit sales. To achieve this target, Polestar China sales will need to do much better than in previous years. In January 2024, Polestar sold 204 vehicles, far better than the 67 units sold in Jan. 2023. As of March 3, Polestar already broke past the 500 unit sales mark, a sharp contrast to last year, during which cumulative sales were only 125 as of February 28, 2023. Despite softness in last few weeks of Polestar 4 sales, Polestar's cumulative China sales have far exceeded previous year's.

Chinese EV Human Horizons suspended its manufacturing of HiPhi vehicles on February 19, after months of insolvency rumors. HiPhi's founder, Ding Lei, declared that "It will take three months to do everything to save the company." Since then, every week has come with a surprise, from takeover speculations by Huawei, Li Auto, and Changan, to trade secrets infringement lawsuits from Faraday Future, to selling steak on live stream. In just one year, we have witnessed the promising launch of HiPhi's third model, the HiPhi Y, selling as much as 1,606 in October 2023, to the sudden shutdown of its operations in early 2024, with sales completely collapsing. A state-owned automaker and HiPhi marriage? On February 28, HiPhi founder Ding Lei appeared at Changan Automobile and met with chairman Zhu Huarong. The photos immediately stirred speculations that "Changan will takeover HiPhi". Though Zhu Huarong refuted the rumours in an interview with local media, such a possibility remains. However, there are concerns that HiPhi's high-end positioning may cannibalize sales of Changan's luxury brand AVATR. Changan is a state-owned auto manufacturer headquartered in Chongqing and is China's oldest automaker, founded in 1862. Currently, Changan is considered part of the "Big Four" state-owned vehicle makers, which include SAIC Motor, FAW Group, and Dongfeng Motor Corporation. Though at this point we are skeptical that Changan is willing to bear the risks of integrating HiPhi, cannibalization risks are low in our view. HiPhi has three products, with prices ranging from 339,000 to 800,000 RMB, meanwhile, AVATR 11 and 12 occupy strictly the 300-400k RMB range. At present, Changan's highest-positioned vehicle brand is AVATR, and venturing further up the echelon will either require launching in-house like BYD did with its Fangchengbao or Yangwang, or choosing the M&A route. Changan is currently behind other major players like BYD, Geely, and Great Wall in the high-end market and HiPhi may be a potential segway. Faraday Future sues HiPhi on trade secrets infringement grounds On March 5, U.S.-based Faraday Future Intelligent Electric Inc. officially issued an article saying that it filed a lawsuit against Human Horizons and its founder and former FF executive Ding Lei on the grounds of infringement of trade secrets and unfair competition. Regarding the prosecution of HiPhi, Faraday Future founder Jia Yueting responded that the lawsuit was prepared after a long-term investigation. Jia Yueting further lambasted HiPhi on Weibo for alleged trade secrets infringement. Jia Yueting posted on Weibo claiming that anyone of conscience knows that HiPhi is plagiarizing, lying, deceiving its users, and continuing to deceive investors with false statements. "Everyone knows that they are cheating, they know that they are cheating, and they also know that they are cheating, but they continue to cheat. Perhaps they have reached the point where they have to use one perjury to cover up another perjury." Jia Yueting also posted a comparison video about FF91 and HiphiX on Weibo, in which FF claimed that the physical design plagiarism was just a small share of their infringement claim. HiPhi and its founder refuted Faraday's claims and said that in the 6 years of the company's operations, HiPhi nor Ding Lei have received a lawsuit from Faraday. Selling steak on live stream Today, Yang Yueqing, Project Director of HiPhi, started live-streaming to sell non-automotive products like steak, pizza, sausage, and other food. The live-streaming revenue will be used to finance the company's daily operations. As the company is in an audit process, vehicle sale is currently on freeze. During the stream, peak viewership exceeded 5,000, and the goods sold were all food priced from dozens of yuan to hundreds of yuan. Some media reported over 700 orders were made within an hour, with sales of about 100,000 RMB.

The 9th week of 2024, from Feb. 26 - Mar. 3, is also the second week after Chinese New Year and automotive sales continued to rebound from the holiday trough. Sales of the top 10 Model 3 and Y rankings rose to 10,210 and 14,480 in week 9 sales, respectively, compared to the 12,175 and 7,420 of last week. Tesla Model 3 accounted for 29.9% of the ranking sales, while Tesla Model Y held approx. a third of sales with a 65.8% share. Here are some of our observations: NIO helped by 2024 facelifts and 2023 discounted models The Model Y remains at the top of the ranking by a wide margin, with 65.8% of sales. The NIO ES6 follows in second with 1,323 weekly sales and its coupe sibling ranked 6th with 512 units sold. As NIO began to roll out 2024 facelifts in early March, current models are discounted by as much as 30,000 RMB. While NIO maintains a clear predisposition against joining the price war, the 2024 model refresh has enabled them to discount old models, while maintaining prices on the facelifts. Tapering sales for BYD Song L BYD Song L has completely dominated XPeng G6 and IM LS6 since launch in mid-December of last year, but based on the previous four weeks, sales are tapering. While still ranking 3rd, its 1,010 vehicles sold account for 6.98% of the top 10, shy from the 12.19% it held three weeks ago. Part of that can be attributed to price war, where XPeng leveled the field by extending its 20,000 RMB discounts to its G6. At this price, the G6 and Song L starting prices are both at c. 190,000 RMB. An EREV may be Tesla Model Y's closest battle While the Model Y largely dominates in the pure electric race, EREVs are aggressively closing the gap. The AITO M7 for example, sold 5704 units in week 9 and has in January of 2024 outsold Tesla with 29,997 M7 (vs. 29,912 Model Y). Li Auto also plans to launch an all-electric SUV, the L6, to directly compete with the Model Y. ZEEKR 007 sells at a 2:3 ratio to Model Y ZEEKR's new sedan is really closing the gap with Tesla's Model 3, reaching 2,088 unit sales this week, behind the 3,052 Model 3 sold. By comparison, that is 20.45% of the top 10 ranking, the highest it has achieved since launch. And despite its success, sales cannibalization has not been material on the ZEEKR 001, which once again fluctuate in the c. 10% share of the ranking, with 966 units sold. NIO ET5/T achieve another strong week Combined, the sedan/touring models sold 1,426 vehicles, which is nearly half of Tesla Model 3. approx. 14% of ranking share. The ET5T also ranked 4th, moving ahead of the BMW i3 since last week. Post Chinese New Year bounce back Sales in both these two Tesla segments have largely recovered from pre-CNY sales, but we expect further increase in week 10. According to research firm CarFans China, potential buyers are preparing for purchases, expecting new model launches. One potential competitor to Model Y this year is the highly touted NIO Alps codenamed "DOM" SUV, which is expected in the second half of 2024. Note to readers In our weekly Top 10 rankings, we use Tesla Model 3 and Model Y's closest competing models to gauge market competitiveness and its respective total sales to measure overall demand. As Tesla Model Y and Model 3 were the #1 and #6 best-selling pure electric vehicles of any price-points, comparing their sales with their direct competing models provide a key insight into China's competitive landscape. All prices indicated are "best-dealer" prices, as opposed to "official" prices, due to heavy discounting (over 30% off) at the dealerships level, which leads to misrepresentation of market competition had we used official prices.

In 2023, BYD sales have soared from 150,000 vehicles in January (including Denza, Fangchengbao, and Yangwang) to over 300,000 vehicles for three consecutive months from October to December. Sales peaked at 340,178 passenger vehicles in December, including 11,929 Denza, 5,086 Fangchengbao, and 1,593 Yangwang. Ultimately, BYD achieved annual sales of over 3 million new energy vehicles, topping Tesla for the first time. However, the first two months of 2024 has shown that even BYD can fall short of expectations. Sales in January dropped from 340.2k to 201k, and further fell to 121.7k in February, representating a month-on-month decline of -40.9% and -39.4%, respectively. While BYD sales were certainly affected by Chinese New Year, February results are still disappointing considering that despite CNY fell in January last year, sales still were 23% stronger at 150.2k units sold. Wholesale sales is different from insurance registrations For context, wholesale figures reflect the number of vehicles sold from the manufacturer (BYD) to its dealerships across China. Unlike insurance registrations, these figures do not reflect end-consumers purchasing their vehicles, but the number of cars sold to dealerships. To that end, a manufacturer can incentivize dealerships to overstock vehicles using discounts, rebates, or other programs. Some local news reported that BYD may have used such strategy towards the end of 2023 to push sales above the 3 million sales mark, by pressuring dealerships to overstock. As many BYD dealerships held an excess of inventory from 2023 year-end, wholesale figures dramatically declined into January and February. Export figures continued to grow at a 55% YoY rate, but has slowed down compared to the triple percentage figure rate of the previous months. Gasoline cars strike back In 2023, BYD's best-selling vehicle was the BYD Qin PLUS, an A-class sedan with plug-in hybrid or full electric models. The Qin PLUS alone sold 455,863 units in 2023, ranking second in China, behind the 646,845 Tesla Model Y. For the first time, BYD sold more Qin PLUS than its direct gasoline car rivals, the Nissan Sylphy and the Volkswagen Lavida, which sold 374,488 and 351,931 units, respectively. However, the Qin PLUS fell behind those two models in January, demonstrating the fierce competition with ICE vehicles. In the compact SUV segment, BYD has far surpassed its ICE counterparts with 50,725 Song PLUS sold in December 2023. However, we were quite surprised by legacy Chinese brands like Changan, which outsold BYD's popular SUV with its Changan CS75PLUS; this has not happened even once in 2023. Geely's Xingyue L also significantly closed the gap with 25,000 unit sales. Once again, BYD's competitors are showing resiliency early into 2024. The Qin and Song PLUS are just examples of the degree of competition that BYD is facing on its home turf from petrol cars. Geely has fully closed the gap with BYD What has been the most eye-opening turn of events into 2024 is Geely's incredible rise to the top. In 2023, Geely sold 1.65 million vehicles, which paled in comparison to BYD's 3 million unit sales. However, in January, Geely actually outpaced BYD's sales by 12,468 vehicles, totalling 213.5k sales. Though BYD regained the lead in February with 121.7k (vs. 111.4k for Geely), Geely still leads YTD sales with 324.9k vehicles sold (vs. 322.8k for BYD). Much of Geely's success can be attributed to its diversified portfolio of ICE, PHEV, EREV, and BEV vehicles, unlike BYD, which is purely focused on the NEV segment. Secondly, Geely has introduced very competitive products under its Lynk & Co and ZEEKR brands, taking the market by storm. Geely is better diversified in terms of brands' share of total sales, with Geely increasingly reliant on its new sub-brands, Geometry and Galaxy. In 2023, Geely brand accounted for 70% of total vehicle unit sales, while BYD represented 95.5% of sales. However, this is due to change as BYD launched two higher-end sub-brands with the Fangchengbao and Yangwang in late 2023. "Petrol car is cheaper" is no longer On February 20, BYD decided to escalate the price war with approximately 20% discounts across its lineup, including the Qin PLUS with a 20,000 RMB price cut, which lowers its starting price to only 79,800 RMB. For comparison, the Sylphy and the Lavida are priced at 108,600 RMB and 93,990 RMB, This much different in price might be the nudge petrol car users need to switch to NEVs and legacy automakers are certainly in full alert. BYD's competitive advantage remains its industry leading vertical integration, from vehicle to battery manufacturing. And to fend off rising competition, BYD introduced price cuts that not even legacy petrol cars can match. It remains to be seen whether this will be sufficient to retain a lead over Geely and other domestic giants, but BYD's appeal to traditional combustion engine vehicle users is now stronger than ever.