Two electric vehicle (EV) models targeting middle-income consumers in mainland China with lower prices have emerged as Tesla’s strongest rivals, as buyers become more budget-conscious.
“Young, middle-income consumers favour electric cars with smart features like autonomous driving systems and voice-activated control technology, but they normally choose the cheapest models due to concerns about the economic outlook and their own job prospects,” said Eric Han, a senior manager at Suolei, an advisory firm in Shanghai. “Cars [like] Galaxy and Mona are deemed value-for-money vehicles with performance on par with some premium models.”
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The Mona 03, a midsize, fully electric sedan priced at 119,800 yuan to 159,800 yuan – which hit the mainland market in August – reported deliveries of more than 15,000 units in January.
The entire mainland EV market reported sales of about 900,000 units in January, up 31 per cent from a year earlier, according to the China Passenger Car Association (CPCA).
The Mona 03, equipped with an advanced driving-assistance system, has a range of at least 515km. It is seen by many young drivers as an equal to Tesla’s Shanghai-made Model 3, which has a price tag of 227,500 yuan for its basic edition.
“It saves a buyer half of the cost if he chooses to own a Mona 03 rather than a Model 3 while the two cars are nearly tied in terms of size, driving range and [intelligence level],” said Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai. “We see a trend that customers opt for the cheapest brand and model since they are worried about job security and potential pay cuts [because] they expect economic turbulence ahead.”
The Galaxy, Geely’s mass-market EV brand, sold 93,545 units last month, up 130 per cent from a year earlier.
Galaxy sedans and sport-utility vehicles (SUVs) are priced at about 150,000 yuan and they lured thousands of buyers away from Tesla’s Model 3 and Model Y vehicles last month, Tian said.
In a research note, China International Capital Corporation said Galaxy’s rising popularity on the mainland would boost its share price by 5 per cent. On Friday, Geely Auto’s Hong Kong-listed shares jumped 8 per cent to HK$17.72.
It also offered a five-year, interest-free loan to eligible customers, which amounted to 20,000 yuan in savings. Tesla has yet to offer incentives for buyers of its Model Y SUV, which starts at 263,500 yuan.